The third means-tested cost of living payment of £299 will be paid by spring 2024, according to the Government's response to the Work and Pensions Committee, published on 25 January 20241. It is the last of three instalments making up a total of up to £900 for households on qualifying means-tested benefits in 2023/241.
The first payment of £301 was made between 25 April and 17 May 2023, and the second payment of £300 was made between 31 October and 19 November 20231. The Chancellor announced the second round of means-tested payments, totalling up to £900, on 17 November 20221. The payments are made automatically by the Department for Work and Pensions or HMRC, and recipients do not need to apply2.
Eligibility for each instalment depends on entitlement to at least one qualifying benefit during a specific qualifying period. 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. Qualifying benefits include Universal Credit, income-based jobseeker's allowance, income-related employment and support allowance, income support, working tax credit, child tax credit and pension credit2. For the autumn payment, the qualifying period was 18 August to 17 September 20232.
"The third Payment of £299 will be paid by Spring 2024"
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, bringing the total additional payment in 2023/24 to £1,0502. 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.
| Payment | Amount | Period |
|---|---|---|
| First means-tested payment | £301 | 25 April to 17 May 20231 |
| Second means-tested payment | £300 | 31 October to 19 November 20231 |
| Third means-tested payment | £299 | By spring 20241 |
The Government said support to households to help with the high cost of living is worth £104 billion over 2022/23 to 2024/251. It also said an evaluation of the Cost of Living Payments is underway, which will seek to understand their effectiveness as a means of support for low-income and vulnerable households1.
Why it matters for households
The £299 payment is the final instalment of the £900 awarded for 2023/24, so households that received the earlier two payments will see no further means-tested cost of living payment after this one under the current round1. Entitlement is assessed per payment against a qualifying period, which means a household that missed one instalment because its benefit award was reduced to nil in that period may still qualify for another1. The Government said the payment is being delivered in three separate payments over 2023/24 to reduce the chance of someone missing out altogether1.
The Committee raised concerns about the "cliff edge" nature of the payments, noting that a person earning just £5 over the qualifying threshold would lose nearly £3001. The Government responded that keeping the rules simple enabled it to make over 30 million separate payments for 2022/23 and a further 23 million so far for 2023/241. It also 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.
The Committee recommended adding Housing Benefit as a qualifying benefit for future support payments. The Government said Housing Benefit is not an income-replacement benefit and that payments to those receiving only Housing Benefit could not be delivered quickly, accurately and straightforwardly1. It added that many Housing Benefit claimants are eligible for the cost of living payment1.
What happens next
From April 2024, subject to Parliamentary approval, most benefit rates will be increased by 6.7% in line with prices growth, and relevant State Pension and Pension Credit rates will be increased by 8.5% in line with earnings growth1. State pension and benefit rates were increased by 10.1% in April 2023 in line with prices growth1. The Government has not reported any further round of means-tested cost of living payments beyond the £299 instalment.
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