Cost of living payments: DWP explains ‘clear’ eligibility rule | Personal Finance | Finance
With the UK’s creeping inflation rate squeezing budgets further, the Government’s cost of living payment for lower-income households will be much welcomed when it lands in spring. While there’s been no confirmation of specific dates of distribution yet, the Department of Work and Pensions (DWP) has issued an update on eligibility rules to receive payment.
In a written statement provided by Conservative MP Mims Davies, she says an individual must be entitled to at least 1p of an eligible social security benefit during a set qualifying period in order to receive the cost of living payment.
Ms Davies, who is the minister for social mobility, youth and progression, said: “Keeping the rules for this policy simple enabled the Government to make over 30 million separate payments to support with the cost of living while maintaining core benefit delivery in 2022.
“This includes the clear rule that you must be entitled to at least 1p of a qualifying social security benefit with respect to the qualifying period to receive a cost of living payment.”
READ MORE: Over-55s’ warned cost of living crisis makes retirement ‘impossible’
According to the DWP, exact payment windows and qualifying periods for eligibility will be announced in due course, but the plans are designed to ensure a “consistent” support offer throughout the year.
Explaining the “simple” rule, Ms Davies said by including those on the benefits system, but not in payment of a qualifying benefit, would involve making payments to individuals who were ineligible during the qualifying period, which defeats the aim of helping those on the lowest incomes.
She said: “The Government’s published impact analysis released alongside the Social Security Bill shows that 85 percent of those who received no Universal Credit award during the qualifying period for the first 2022 cost of living payment of £326, had no award solely due to earnings.
“Of those with no award due to earnings, most had no Universal Credit award for six assessment periods following the qualifying period solely due to earnings or left Universal Credit altogether.
“Paying those with financial resources available, which would make them ineligible for means-tested benefits, is not the intention of the Cost of Living Payments which are aimed at those on the lowest incomes.”
Ms Davies added: “The 2023/24 cost of living payments are being delivered in three payments over the financial year to reduce the chance of someone missing out completely.”
READ MORE: State pension underpayments reach £300million as DWP fixes ‘scandal’
Up to 1.3 million will be eligible through legacy DWP benefits such as Jobseekers Allowance and Income Support, reaching a total of 8.1 million households.
Similar to last year, those who are eligible will not need to apply for payments, as they will be made automatically. Those eligible through tax credits and no other means-tested benefits will be paid by HMRC shortly after the DWP payments are made.
These payments will all be tax-free, will not count towards the benefit cap, and will not have any impact on a person’s existing benefit awards.
