MILLIONS of people on Universal Credit and benefits will get a one-off £650 payment go up to help with soaring bills.
The Chancellor Rishi Sunak revealed the support today as part of his plan today to help struggling households cope with the cost of living crisis.
More than eight million households will receive the lump-sum.
The payments will go to everyone on means-tested benefits, including universal credit, pensions credit, jobseekers’ allowance and income support.
The Chancellor also announced:
- a Windfall tax on gas and oil firms to partially fund the support
- £300 one-off payment to low-income pensioners
- £150 extra one-off disability payment
- £400 energy discount for EVERY household
- An extra £500million for the Household Support Fund
- A one-off £650 payment to those on benefits including Universal Credit
Mr Sunak said: “We know that people are facing challenges with the cost of living and that is why today I’m stepping in with further support to help with rising energy bills.
“We have a collective responsibility to help those who are paying the highest price for the high inflation we face. That is why I’m targeting this significant support to millions of the most vulnerable people in our society.
“I said we would stand by people and that is what this support does today.”
The Department for Work and Pensions will make the payment in two lump sums – the first from July, the second in the autumn.
Payments from HMRC for those on tax credits only will follow shortly after each to avoid duplicate payments.
You will need to be on eligible benefits or have begun a successful claim which is later, as of May 25 2022 to get the first payment.
HMRC and the DWP will set out the eligibility date for the second payment in due course.
The payment will be tax-free and won’t count towards the benefit cap and it won’t affect any existing payments.
It comes after the regulator Ofgem warned that the price cap could rise by another £800 in October, taking the average dual fuel bill to £2,800 a year.
Mr Sunak is set to use a windfall tax on oil and gas firms to pay for the package of help for households.
Universal Credit usually rises annually in April along with other benefits based on the inflation rate for the previous November.
The government last announced help for households back in February, including the £150 council tax energy rebate for four in five households.
It also included a £200 discount applied to every energy bill in October, which was set to be repaid over five years.
The Household Support Fund has also been doubled to £1billion, and this gives money to local councils to dish out to struggling residents in their area.
Cost of living crisis deepens
The cost of living crisis has deepened since then and there are widespread calls to give more help to families struggling to get by.
The boss of one of Britain’s biggest energy companies warned the cost-of-living crisis could endure for more than a year and a half.
The energy price cap limiting how much suppliers can charge for standard tariffs shot up by 54% in April pushing up bills for millions of people.
Around 22million households are currently on price capped tariffs as fixed deals are now far higher following a steep increase in wholesale energy costs since last year.
The price cap increase pushed the typical duel fuel bill from £1,277 to £1,971, though exactly how much you pay depends on usage.
That could rise again to £2,800 in October when the second of two annual reviews of the price cap take place, pushing even more people into financial difficulty.
Wholesale energy costs are going up due to global supply issues and the war in Ukraine.
While the price cap prevents these increase being passed on to consumers immediately, the price cap is based on the wholesale costs when it’s reviewed creating a “shock” rise twice a year when they go up.
Ofgem is considering more regular reviews of the cap to spread out rises, and pass on any falls earlier.
Meanwhile other costs have gone up ranging from food to fuel, piling pressure on people’s finances.
Petrol prices have hit record highs in recent months while the price of some basic food items have shot up by as much as 60%.
One mum told The Sun how she worries that she won’t be able to feed her kids or keep her fridge running due to soaring energy bills.
