First 2023/24 Cost of Living Payment issued

The first Cost of Living Payment of £301 was made between 25 April and 17 May 2023¹. It formed the first of three instalments of a means-tested award worth up to £900 for 2023/24, announced by the Chancellor on 17 November 2022¹. For tax credits only claimants, the £301 payment was made between 2 and 9 May 2023².

The second payment of £300 was made between 31 October and 19 November 2023, and the third payment of £299 was paid by Spring 2024¹. Turn2us records the third payment as made between 6 February and 22 February 2024 for most people, and between 16 and 22 February 2024 for tax credits only claimants². The OECD gives the same dates for the third payment³.

Eligibility for the first instalment required entitlement to at least 1p of a qualifying social security benefit in the qualifying period¹. Turn2us sets the qualifying period for the £301 payment as an assessment period ending between 26 January 2023 and 25 February 2023 for Universal Credit claimants, or receipt of another qualifying benefit between those dates². The Department for Work and Pensions says the payment was delivered in three separate instalments over 2023/24 to reduce the chance of someone missing out altogether¹.

The payments sat alongside other support. State pension and benefit rates rose by 10.1% in April 2023 in line with prices growth¹. The Joseph Rowntree Foundation put the value of the 2023/24 cost-of-living payment at £900 for low-income households on means-tested benefits, with additional support for pensioner households and households receiving disability benefits⁴. The government put total support to households with the high cost of living at £104 billion over 2022/23 to 2024/25¹.

Why it matters for households

The £301 payment was automatic and did not have to be claimed; it was paid separately from benefit payments and in the same way as usual benefit payments². Households on Universal Credit, Pension Credit and eligible legacy benefits were among those covered, with more than 8 million households expected to receive up to £900 across 2023/24¹.

Not everyone on a qualifying benefit received each instalment. A claimant whose benefit was reduced to £0 for the qualifying period was not eligible, unless the reduction was for reasons such as rent paid to a landlord or money owed, or where a hardship payment had been made². The Work and Pensions Committee said a person earning just £5 over the qualifying threshold could lose nearly £300, describing this as a "cliff edge"¹. The government said it recognised some people would just miss out, and that splitting the award into three payments reduced the chance of missing out altogether¹.

The Joseph Rowntree Foundation said that even with the cost-of-living support, a couple with two children on out-of-work benefits had about half of what it calculates is needed for a minimum standard of living, and that a couple with two children where one parent worked full time on the National Living Wage reached 77% of that standard with the payments, against 74% without them⁴.

What happens next

The government said an evaluation of the Cost of Living Payments was underway, to understand their effectiveness as support for low-income and vulnerable households¹. From April 2024, subject to Parliamentary approval, most benefit rates were to rise by 6.7% in line with prices growth, and relevant State Pension and Pension Credit rates by 8.5% in line with earnings growth¹. The Joseph Rowntree Foundation said all household types in its Minimum Income Standard would be rebased in 2024⁴.