Cost of Living support announcement

27 May 2022

The Chancellor has announced a package of support worth more than £15bn to help households with the rise in the cost of living.

This means that almost all the eight million most vulnerable households will get £1,200 of one-off support in total this year to help with the cost of living, with all domestic electricity customers receiving at least £400.

These payments will be made directly to eligible people across the UK, so claimants don’t need to take any action.

Included in the package of support:

£650 one-off Cost of Living Payment for those on means tested benefits:

More than 8 million households on means tested benefits will receive a payment of £650 this year, made in two instalments. This includes all households receiving the following benefits:

  • 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 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. Claimants will need to be in receipt of one of these benefits, or have begun a claim which is later successful, as of 25 May 2022 to be eligible for the first of the two instalments. This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

£150 Disability Cost of Living Payment

Around six million people across the UK who receive the following disability benefits will receive a one-off payment of £150:

  • Disability Living Allowance (including Child Disability Living Allowance)
  • Personal Independence Payment
  • Attendance Allowance
  • Scottish Disability Benefits
  • Armed Forces Independence Payment
  • Constant Attendance Allowance
  • War Pension Mobility Supplement

For the many disability benefit recipients who receive means tested benefits, this £150 will come on top of the £650 they will receive separately. As with the other Cost of Living Payment these payments will also be exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

Energy Bills Support Scheme doubled to a one-off £400:

  • Households will get £400 of support with their energy bills through an expansion of the Energy Bills Support Scheme.
  • As well as doubling the £200 of support announced earlier this year, the full £400 payment will now be made as a grant, which will not be recovered through higher bills in future years.

£500m increase and extension of Household Support Fund

To support people who need additional help, the Government is providing an extra £500 million of local support, via the Household Support Fund, which will be extended from October 2022 to March 2023.

Further information about these measures can be found on GOV.UK including a cost of living support factsheet.


Cost of living crisis

Caring often comes with additional costs and many carers suffer financial hardship as a direct result of the care they provide.

With energy bills soaring and the cost of food and everyday items spiralling, carers are facing a cost-of-living crisis.

New research by Carers UK reveals that just under half (45%) of unpaid carers are currently unable to manage their monthly expenses and that any further increases in energy bills will negatively affect their own physical and mental health or that of the person they care for.

Many also said they were having to take difficult steps to manage their monthly expenses;

  • 58% have cut back on heating while
  • 14% have already fallen into arrears with their energy bills. In the months ahead,
  • 42% thought that they would not be able to heat their home to a safe level, while
  • 32% are worried they will have to use a food bank.

To ensure carers are supported during this extremely difficult time, Carers UK is calling on the UK Government to immediately:

  • Increase Carer’s Allowance and other benefits in line with current inflation predictions for April 2022. Carer’s Allowance is set to rise by only 3.1% in April 2022, while inflation (CPI) is expected to reach 7.25%.
  • Immediately extend the Warm Home Discount scheme to ensure that it include carers. This is in recognition of the additional energy costs often faced by unpaid carers.
  • Address the lack of financial security that many carers have faced for years as a direct result of their caring responsibilities. In particular, Carers UK want to see the Government increase the level of carers’ benefits including Carer’s Allowance so that it is no longer the lowest benefit of its kind. They also want to see the earnings limit for those claiming Carer’s Allowance to rise, so that it is at least equal to 16 hours’ work at the National Living Wage (and pegged to it in future years), and to provide a Carer’s Allowance Supplement to all carers with an entitlement in England, Wales and Northern Ireland – as those in Scotland have received since 2018 – so all carers across the UK receive the same level of support.

What can you do to help?

Write to your MP using Carers UK’s template letter.

Please add your personal experience of caring and how it has affected your own financial situation to this before sending it, if you wish to do so.