THOUSANDS of people on Universal Credit could miss out on a £900 cost of living payment, a think tank has warned.
The free cash is set to be paid out in three instalments to help those on certain benefits with the cost of living.
But experts at the Institute for Fiscal Studies (IFS) are warning that 825,000 hard-up households won't qualify for the cash.
It said this is because eligibility will depend on being on Universal Credit at least one month before each payment is due.
This means people with unpredictable earnings could miss out entirely if they happen to earn a bit more in the qualifying month.
An IFS report said: “We estimate that, as a result, in each of the three relevant months there will be around 825,000 people who earn slightly more than is consistent with Universal Credit eligibility and who, as a result of missing out on the cost-of-living payment, end up with less income than other similar people who earn less."
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It added that more people could be better off it they earned less due to the way the cost of living payments will work.
The think tank said the Government instead needed to ensure that normal benefits kept pace with inflation.
Benefits and Universal Credit payments are set to rise in April in line with September's inflation rate of 10.1%.
The Universal Credit standard allowance for those who are single and aged under 25, will rise from £265.31 to £292.11.
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But the IFS said the annual uprating of benefits is "lagging behind".
Real benefit rates – how benefit payments change with inflation – were 7.6% lower in 2022 compared with their pre-pandemic levels in 2019.
It will be 6.2% lower in 2023 and 2.0% lower in 2024, the IFS said.
The IFS predicts that it won't be until April 2025 that "benefit rates will recover the ground they lost".
A Department for Work and Pensions spokesperson said: “We recognise the pressures of the rising cost of living, which is why we also delivered £1,200 of direct, targeted support to millions of vulnerable households last year, and will be providing a further £1,350 of support in 2023-24."
Who will qualify for the £900 cost of living payment?
More than eight million people will get the help directly into their bank accounts.
And the £900 in free cash will be paid over the financial year in three instalments.
To be eligible for the payment, households will need to be claiming at least one of the following:
- Income-based jobseeker’s allowance
- Income-related employment and support allowance
- Income support
- Pension credit
- Tax credits (child tax credit and working tax credit)
- Universal Credit
For the previous payments, you had to be entitled or later found to be entitled to one of these benefits by a certain date.
This certain date will be announced nearer the time, the DWP said.
People receiving tax credits only will be paid the cash by HMRC.
What other help is coming?
Over six million people with disabilities will receive a £150 payment this summer.
The exact eligibility criteria for getting the payment have not been revealed yet.
But those who qualified for last year's £150 bill help received one of the following benefits:
- Attendance Allowance
- Constant Attendance Allowance
- Disability Living Allowance for adults
- Disability Living Allowance for children
- Personal Independence Payment
- Adult Disability Payment (in Scotland)
- Child Disability Payment (in Scotland)
- Armed Forces Independence Payment
- War Pension Mobility Supplement
More details will be announced in due course.
Millions of pensioners will also receive another £300 cost of living payment later this year.
This follows from last year's help which was given to households who normally get the Winter Fuel Payment.
It's not yet known whether households will qualify if they normally receive the Winter Fuel Payment, as exact details have not been revealed yet.
You qualified for the last Pensioner Cost of Living payment if:
- You were born on or before September 25, 1956
- You lived in the UK for at least one day during the week of 19 to 25 September 2022 in what is known as the "qualifying week"
Check what benefits you could be entitled to
Millions are entitled to benefits that they aren't claiming and which can make them eligible for the £900 cost of living payment.
The quickest way to see what benefits you may be able to claim is to use one of the three benefit calculators recommended by Gov.UK.
Each one is free to use. They are:
- Turn2us
- Policy in Practice
- EntitledTo
Before using the tools, make sure you have key financial information to hand, such as bank and savings statements, and information on pensions and existing benefits.
If you live with a partner or family, get their basic financial information together too as this could affect your claim.
For each of these, you’ll be asked information about your circumstances, such as your current employment and income.
You’ll also need to give information about yourself, including your age and who you live with.
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You can then use the contact information on Gov.UK to get the ball rolling and apply for what you're owed.
Of course, the tools only provide an indicator of what benefits you can claim – and usually don't include means-tested benefits, so you may be entitled to even more.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
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