The cost of living payments announced by the Chancellor today are welcome.

For people who are not already claiming benefits there is a simple message:

Check whether you qualify, as even the smallest benefit claim is now worth making.

And for people who are already claiming benefits there is reassurance:

You don’t need to make a claim for these support payments, or change benefits, as you will automatically receive your cost of living support.

In this blog we’re taking a quick look at how the payments work for people not already claiming benefits, as well as how they have the best chance of qualifying. The information is based on the statement released today by the government.

If you’re an existing benefits claimant our Cost of living support help page gives more information on what you might receive and when. And remember you don’t need to switch to Universal Credit to benefit from the extra payment. It goes to all existing claimants, including people on old-style ‘legacy’ benefits and tax credits. 

Not claiming benefits:
Use our calculator to check if you qualify

The simple message is that, anyone who qualifies for means-tested benefits is entitled to an extra cost of living payment. That’s anyone, including people who are only entitled to a few pence of benefit. So, if you’re not already getting a means-tested benefit then it’s really worth checking whether you can.

Our benefits calculator can help you check easily. If you’re working-age the main benefit you could claim is Universal Credit, which is paid on a sliding-scale as your earnings go up. If you are pension-age then Pension Credit is the gateway to getting the means-tested cost of living payment.

In addition to your cost of living payment you’ll also get a regular benefit payment. The key point is that it doesn’t matter how small or large your benefit payment is – just receiving it gets you the extra cost of living payment in a lump sum.

Working age and applying for Universal Credit? If you find out now that you’re entitled to Universal Credit you will get a payment of £324. You won’t get the full £650 payment announced by the Chancellor, as to get the first instalment you had to be claiming benefits (or have started a new claim) by 25 May 2022. But, if you claim between now and a yet-to-be-announced date, you should get the second payment. This payment should be made in the Autumn. Pension age and applying for Pension Credit? If you find out now that you were entitled to Pension Credit on 25 May 2022, and you start your claim before 18 August 2022, you should get the full £650 payment. This is because you are able to backdate your claim for three months. If you become eligible after 25 May 2022 (for example, due to your age) or start your claim after 18 August 2022 (but before the yet-to-be-announced second qualifying date) you will get a payment of £324.

Give yourself the best chance of qualifying

Our benefits calculator provides the easiest way to check if you qualify for means-tested benefits and so can get an extra payment. But we sometimes find that people miss out pieces of information that make it more likely they could claim.

Don’t forget to enter your:

• Childcare costs. The Universal Credit childcare element can cover up to 85% of your childcare costs. Entering the childcare costs you pay when your children need the most care will help show whether you qualify for Universal Credit in the months you need help most.
• Pension contributions. Your net earnings are used to calculate how much Universal Credit you are entitled to. This is your earnings after any tax and national insurance are taken off, but also the full amount of any pension contributions you make are ignored. The more you contribute to your pension the more likely you are to qualify, so please check you enter the full amount you pay into your pension.
• Business expenses (self-employed). Universal Credit (UC) calculations consider income received in an ‘assessment period’ - which is measured as a calendar month from the date you claim UC, then a new period begins on the same date in each following month. The calculation also deducts from self-employed income any allowable business expenses paid out over the same period, so don’t forget to enter these as they reduce your income for UC. More information is available from HMRC’s website.

Best take-up campaign ever

The cost of living payments could herald a major step forward in terms of improving benefit take-up rates. It may not have been their intention, but the prospect of a 'golden hello', in the form of a cost of living payment, could be just the spur some people need to check their benefits.

Like all good marketing campaigns, there is a window of opportunity for people to qualify. In order for the system to work, at some point there will have to be a cut-off date for the second instalment of the £650 cost of living payment. Just as you had to be eligible for a means-tested benefit on 25 May to qualify for the first instalment, the government will set a cut-off date for the second payment. But why wait?

We think it’s a message the public will respond to:

It doesn’t take long to check your benefits – 10 minutes on average. If you qualify you could also get an extra £324 cost of living payment, tax-free.

But don’t delay, the offer won’t be available for ever!

If this is you, or someone you know, please use the calculator now to check what you may be entitled to claim.