Second 2023/24 Cost of Living Payment issued

The second Cost of Living Payment of £300 was made between 31 October and 19 November 2023, according to the Government's response to the Work and Pensions Committee's first report of session 2023/24¹. It forms the middle instalment of a means-tested award of up to £900 for 2023/24, announced by the Chancellor on 17 November 2022 and paid in three parts¹.

The first payment of £301 was made between 25 April and 17 May 2023, and the third payment of £299 will be paid by spring 2024¹. The Government said more than 8 million households will receive up to £900 in Cost of Living Payments in 2023/24, after more than 8 million households on means-tested benefits received up to £650 in 2022¹. It said it had made over 30 million separate payments for 2022/23 and a further 23 million so far for 2023/24¹.

Eligibility for the autumn payment required entitlement to at least one qualifying benefit during a qualifying period of 18 August to 17 September 2023, covering Universal Credit, Working Tax Credit, Pension Credit, Child Tax Credit, income-based Jobseeker's Allowance, income-related Employment and Support Allowance and Income Support². The Government said a claimant must be entitled to at least 1p of a qualifying social security benefit with respect to the qualifying period to receive a payment¹. Payments are automatic, with no application needed, and arrive in the same account as tax credits, marked "HMRC COLS" on statements².

Separately, around 6 million people received a £150 Disability Cost of Living Payment, and over 8 million pensioner households received £300 as a top up to their Winter Fuel Payment¹. Disabled people who also receive means-tested benefits can receive both the £900 and the £150, a total of £1,050 in 2023/24². The £400 energy discount for electricity customers, paid in monthly instalments between November 2022 and March 2023, is not set to be repeated this winter².

The Committee criticised the "cliff edge nature" of the payments, noting that a person earning just £5 over the qualifying threshold would lose nearly £300¹. The Government said it recognised some people may just miss out, but that splitting the award into three payments over 2023/24 reduces the chance of missing out altogether, and that keeping the rules simple enabled it to make the payments while minimising fraud and error¹. It said 85% of those who received no Universal Credit award during the qualifying period for the first 2022 payment of £326 had no award solely due to earnings¹.

Why it matters for households

The £300 reached households on means-tested benefits in late October and November 2023, with the final £299 due by spring 2024¹. Because each instalment has its own qualifying period, a household that missed one payment could still qualify for another¹. Households that receive only Housing Benefit were not included among the qualifying benefits; the Government said Housing Benefit is not an income-replacement benefit and is administered by local authorities, sometimes paid directly to a landlord, so payments to those receiving only Housing Benefit could not be delivered quickly and accurately¹. The Committee had recommended adding Housing Benefit as a qualifying benefit for future support¹.

State pension and benefit rates rose by 10.1% in April 2023 in line with prices growth¹. From April 2024, subject to Parliamentary approval, most benefit rates will increase 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 Government said support to households with the high cost of living is worth £104 billion over 2022/23 to 2024/25¹. An evaluation of the Cost of Living Payments is underway to assess their effectiveness as support for low-income and vulnerable households¹.

What happens next

The third payment of £299 will be paid by spring 2024¹. The Government Response to the Committee was received on 12 January 2024 and published on 25 January 2024¹. The Committee published its first report on 14 November 2023¹. In October 2023 the Government held the first Household Support Fund Awareness Week to raise public awareness of the scheme¹.