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The UK has been rocked by soaring energy bills, petrol price hikes and other rising expenses amid the cost of living crisis.
Many families and households have been plunged into poverty, with half of people saying their health has gotten worse since costs began rising.
However, less than 24 hours after Sue Gray’s damning Partygate report was released, Chancellor Rishi Sunak announced a string of measures to help struggling households cope.
If you’ve been worried about how to cover costs, you’ll be pleased to know you could be eligible for over £1,000 of support that will no longer need to be repaid – a huge U-turn from the initial offerings laid out by the government just months ago.
Here’s everything you need to know about every cost of living measure that has been announced and whether you’re eligible for the incentives.
All the new government Cost of Living support
With gas prices reaching record highs amid a surge in demand following lockdowns and the Russia-Ukraine war meaning Russian gas supplies are at threat, energy bills have risen by hundreds of pounds.
People across the UK have struggled to cope with the steep rising costs of living and have felt let down by the government due to the lack of support.
However, all UK households will now be receiving a £400 grant for their energy bills in October, 2022.
Previously, this amount was just £200 per household and the energy bill rebate would have needed to have been paid back over the course of five years – despite the increasing living costs.
That has now been scrapped and the £400 energy bill universal support will no longer need to be repaid.
You do not need to do anything to claim the grant and it will automatically be credited to accounts in October.
If you prepay energy bills, the money will be received in the form of a voucher, cheque or directly to your smart meter.
Of the move, Chancellor Rishi Sunak said: ‘The outlook for energy prices has changed. I’ve decided those repayments will be cancelled. So, for the avoidance of doubt, this support is now unambiguously a grant.
‘Furthermore, we have decided that the £200 of support for household energy bills will be doubled to £400 for everyone.’
Disability Cost of Living Payment
Individuals in Britain who receive disability benefits will be receiving a one-off £150 disability cost of living payment.
Given the potential need for equipment in the home that may require significantly more energy, this money will be exempt from tax and will not count towards the benefit cap. It will also have no bearing on existing benefit awards.
The government website states: ‘We know people with disabilities may face a wide range of additional costs, such as specialist equipment, specialist food, and increased transport costs, and this payment will help with these costs as they are likely to have increased.’
To be eligible for this payment, you will be receiving one or more of the following benefits – or have begun a successful claim by Wednesday, May 25, 2022:
- Disability Living Allowance
- Personal Independence Payment
- Attendance Allowance
- Scottish Disability Benefits
- Armed Forces Independence Payment
- Constant Attendance Allowance
- War Pension Mobility Supplement
‘Claimants must be in receipt of, or have begun an eventually successful claim for, one of these benefits as of 25th May 2022 to be eligible for this additional payment.
This sum will be paid by September, 2022, in a bid to help those who are ‘most vulnerable to rising prices’, according to the government website.
Winter Fuel Payment and One-Off Pensioner Cost of Living Payment
Pensioner households will also receive a separate one-off payment of £300 to go towards energy bill costs. This will be paid to those who receive the winter fuel payment or ‘heating allowance’.
To qualify for the winter fuel payment, you will need to have been born on or before 26 September, 1955, and have lived in the UK for at least one day of the ‘qualifying week’ from 20 to 26 September, 2021.
Those eligible for the winter fuel payment can receive between £200 to £300 each year, and this amount is also tax-free. It is paid annually and should be received by November or December, 2022.
Both the winter fuel payment and the one-off pensioner payment should be paid into your account automatically. This means you could be receiving between £500 to £600, in total, if you are eligible.
The Chancellor told the House of Commons: ‘From the autumn we will send over eight million pensioner households who receive the winter fuel payment an extra one-off pensioner cost-of-living payment of £300.’
Low-Income Household Cost of Living payment
While the government has refused to reintroduce the £20 uplift on Universal Credit that it had introduced during the pandemic, there will now be additional support.
Over eight million low-income households in the UK will be receiving a £650 one-off payment to help with the rising costs of living.
The payment will be split into two parts paid in July, 2022, and autumn 2022.
Like the other payments, this will be tax-free and will not affect the benefit cap or existing benefit awards.
If you’ve been wondering what classifies a low-income household and whether you’re eligible for this payment, here are the government’s criteria.
You will be receiving one or more of the following benefits – or have begun a successful claim by Wednesday, May 25, 2022:
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit
The payment will be made automatically, so you don’t need to do anything to claim.
Where has the government’s extra Cost of Living Payment funding come from?
Given the panic and turmoil that people in Britain went through following the cost of living price hikes just months ago, many are wondering where this support was at the time.
Chancellor Rishi Sunak has said that, in order to pay for the extra support, a 25% Energy Profits Levy would be introduced for oil and gas companies to reflect their profits.
He told the House of Commons: ‘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.
‘It is also right that those companies making extraordinary profits on the back of record global oil and gas prices contribute towards this. That is why I’m introducing a temporary Energy Profits Levy to help pay for this unprecedented support in a way that promotes investment.’
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Rishi Sunak has denied his emergency cost of living funding announcement was engineered as a ‘fig leaf to cover up’ the Sue Gray report.
The chancellor was grilled by money saving expert Martin Lewis after he unveiled a £15 billion emergency package of measures to help people through the worst squeeze on incomes in a generation.
Critics have accused the government of timing the announcement to move attention away from damning criticism of Boris Johnson over lockdown breaches in Downing Street.
Mr Lewis said the timing of the announcement had left a ‘slightly ill taste in the mouth’ for some and voiced his reader’s concerns that the perceived delay had impacted people’s mental health.
The chancellor – who was fined for breaching lockdown laws along with the prime minister – denied the report’s publication informed his policy.
Speaking to the money MoneySavingExpert.com founder, he said: ‘I can categorically assure you that had no bearing on the timing for us announcing the support, I can give my absolute assurance on that and my word.’
He said it had been necessary to wait to act in order to get a better sense of where energy prices would be by the autumn.
Ofgem signalled this week an £800 rise to the price cap in October is expected, taking annual bills to £2,800 for most households.
Mr Sunak said ‘no chancellor can solve every problem’ but hinted he was open to intervening again next year if the cost of living balance has not been restored.
Asked if he would announce new measures in the spring if necessary, the chancellor said: ‘I think people can judge me by my actions in the time I’ve been doing this job.
‘I’m responsive to the situation the country is in and act to support people where we can, helping the most vulnerable and doing so in a responsible way to make sure the economy and country are strong.
‘I will continue to act that way, I don’t know what prices will be next year.’
He said increases in benefits and pensions for next year are likely to be high as they will be linked to the inflation rate as of September.
Mr Sunak added: ‘That should give people an enormous sense of assurance – we’re providing help to get people to that point next year when incomes go up.’
Earlier today, he confirmed a major U-turn by adopting Labour’s policy to partly fund the assistance by imposing a windfall tax on the rising profits of oil and gas companies.
A previously announced £200 rebate for households to help cover spiralling energy costs has been upgraded to £400 and will be paid in October.
Crucially, it will no longer need to be repaid in higher bills over the next five years, as was the case under the original scheme.
Further targeted measures will help the most vulnerable households deal with the crisis.
People on the lowest incomes – which covers those on Universal Credit, Tax Credits, Pension Credit and legacy benefits – will receive a £650 one-off payment.
Additional one-off payments of £300 will go to pensioners alongside the winter fuel payment this winter, at a cost of £2.5 billion.
Worth £900 million, those receiving disability benefits will receive a £150 cost of living payment by September.
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