Rishi Sunak announces eight million people will get one-off £650 – who is eligible?

Rishi Sunak's opening statement on cost of living announcement

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This will be for eight million people of the lowest income households, Rishi Sunak said. The intervention will impact millions of households on Universal Credit, Tax Credits, Pension Credit and legacy benefits, HM Treasury said.

Following the announcement in the House of Commons, Mr Sunak wrote on Twitter: “We will send a one-off £650 cost of living payment directly to around eight million of the lowest income households.

“Worth over £5billion, there will be no need for people to fill out forms – we will send the payment straight into bank accounts.”

Reacting on Twitter today, financial journalist Martin Lewis wrote: “THE BIG ONE 8 million low income households to get a one off cost of living payment of £650 pounds (£5bn in total) from July DWP will make it – likely to those on UC and legacy benefits. It will be automatic. It will be sent straight to bank accounts.”(sic)

Imran Hussain, director of policy and campaigns at Action for Children, said: “We’re pleased the Chancellor has listened and started to target support towards low-income households overwhelmed by real-term falls in benefits and soaring energy prices.

“The measures announced today will help, but won’t fully shield families with children from the pain they’re experiencing. With more mouths to feed, more rooms to heat and more clothes to wash, families with children feel price rises the most and are at greatest risk of falling into poverty.

“Ultimately, we need a stronger social security system to ensure all families with children can meet their basic needs. With nearly four million children in families on Universal Credit, increasing the child element of this benefit would protect more children from growing up in desperate hardship and help give them the bright futures they deserve.”

Elsewhere in the announcement, Mr Sunak announced over eight million pensioner households who receive the Winter Fuel Payment will get an extra, one-off pensioner cost of living payment of £300, from the Autumn.

He also said six million people who receive non-means tested disability benefits, will get an extra one-off disability cost of living payment worth £150.

Elsewhere, Mr Sunak also announced the energy bills discount loan of £200 would be doubled to £400.

Furthermore, it will no longer need to be paid back.

It means households will get a £400 discount on their energy bills from October 2022.

Kevin Mountford, savings expert and co-founder of savings platform Raisin UK, said: “It was positive to see the Chancellor Rishi Sunak announce much need cost-of-living measures which will support the poorest households and pensioners, whilst also providing some support for the squeezed middle.

“The £650 automatic payment will benefit low income households, with disability benefits getting an extra one-off payment of £150 and pensioners getting an extra one-off payment of £300.

“It was also really positive to see the Energy Bills Rebate being changed from a loan to a grant, meaning UK households will no longer have to repay the money given to energy suppliers to lower their bills. Additionally, the rebate has been doubled to stand at £400 per household.”

HM Treasury said this new Cost of Living Support package will mean that almost all of the eight million most vulnerable households will receive at least £1,200 of extra support this year. This includes the £150 council tax rebate which was being paid from April 2022.

More to follow…

Justina Miltienyte, head of policy at Uswitch.com, commented: “Doubling the bill rebate to £400 is a sensible step, and it is good news that it will not have to be repaid.

“This measure will give some welcome relief to customers and reduce the impact of soaring bills, especially for those on the brink of financial hardship.

“We have long called for an increase in support for the vulnerable who will be worst hit by the energy price hikes. So the one-off £650 payment to the eight million people with the lowest incomes is to be applauded, as is the £300 for pensioners and £150 for those receiving disability support.

“The devil is in the details though and we still don’t know how the payments will be distributed. We will be watching to see how the Government implements these proposals and ensures help actually reaches all those that need it.”

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