Who will get the new £900 cost of living payment? Here's what we know so far

Further support for those struggling with the rising cost of living was announced in the Autumn Statement, but who is eligible for the payment?

woman holding newborn baby while looking at a laptop
(Image credit: Getty Images)

Chancellor Jeremy Hunt has announced a new £900 cost of living payment to help families struggling with rising prices. 

This follows the wave of support already provided, including a £650 cost of living payment (opens in new tab) paid to those on means-tested benefits. 

Announcing the additional support in the Autumn Statement, Jeremy Hunt said: "Our priorities are stability, growth, and public services. We also protect the vulnerable because to be British is to be compassionate and this is a compassionate government.

"For the most vulnerable we will introduce additional cost of living payments next year, of £900 to households on means-tested benefits; £300 to pensioner households; and £150 for individuals on disability benefit."

As well as the new cost of living support, Jeremy Hunt (opens in new tab) also confirmed a 12-month extension to the Energy Price Guarantee (opens in new tab), which will now be in place until the end of March 2024. 

Who will get the new £900 cost of living payment?

The £900 cost of living payment will be available to those who claim certain means-tested benefits. While many details are yet to be confirmed, it is likely that the payments will work in a similar way to the £650 cost of living payment that was made in 2022. 

To be eligible (based on the eligibility criteria for previous cost of living payments), you will need to be claiming a means-tested benefit, such as:

  • Child Tax Credit
  • Income-based jobseeker's allowance
  • Income-related employment and support allowance
  • Income support
  • Pension credit
  • Universal credit
  • Working tax credit.

You will also need to have been claiming the benefit, or have submitted an application that goes on to be successful during a very specific qualifying period, that has not yet been announced. So if you think you might be eligible for one or more of these benefits and aren't yet claiming, it's worthwhile submitting your application as soon as possible to maximise your chances of qualifying for the £900 payment. 

It is estimated that one in four families were eligible for the second instalment of the £650 cost of living payment. More than eight million families received the first instalment which was paid in July. 

When will the £900 payment be made?

So far, all we know is that the new cost of living payments will be paid next year. No other details have yet been announced. But it may follow along the same lines as support that was given out this year. The council tax rebate (opens in new tab) was paid to qualifying households between April and the end of September, while the cost of living payments to low-income households were paid in July and November. 

It's possible a payment could be made in April, as that's when the caps on energy unit prices under the Energy Price Guarantee are set to rise. Under the price guarantee, annual energy bills based on typical use will be limited to £2,500, until the end of March 2023. For 12 months from April 2023, while the price guarantee will remain in place, the limit will rise to £3,000. This figure is based on typical use and is not a maximum amount you will pay. 

There may be another instalment in autumn 2023, as temperatures drop and people's energy usage increases. 

Mark Sait (opens in new tab), CEO and founder of sustainability and energy-saving platform, SaveMoneyCutCarbon, commented: "The announcements made in the Autumn Budget from Chancellor Jeremy Hunt will of course help families and vulnerable households across the UK...The challenge, however, is we are going to need to continue to make large payments to help lower-earning families in the short term. I think at a government level, unless we are going to continue to write cheques in a crisis, we have got to look at reducing what we actually use and getting our bills down by reducing demand - starting with our usage at home."

How will the cost of living payment be paid?

Details around how the £900 cost of living payment will be made have not yet been confirmed, but it's likely that the payment will be made in instalments rather than one lump sum. 

This is how the £650 cost of living payment was paid this year. There was an initial payment of £326 paid in July, while a second payment of £324 was paid in November. It might be paid in more than two instalments, but right now, we don't know. 

Do I have to apply for the payment?

If the criteria is the same as this year's cost of living payment, you shouldn't have to apply for the cost of living payment - it'll be paid automatically if you are eligible. The payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

But it's worthwhile checking whether you are entitled to any means-tested benefits and applying as soon as you can, to ensure you qualify for all or some of the new cost of living support. Use the benefits calculator at Entitledto (opens in new tab) to see what help you might qualify for. 

What other support was announced in the Autumn Statement?

In addition to the £900 cost of living payment for those on means-tested benefits, the Chancellor also announced an additional £300 cost of living payment to pensioner households and an additional £150 to those on disability benefit. 

Jeremy Hunt said: "We will also provide an additional £1 billion of funding to enable a further twelve-month extension to the Household Support Fund, helping Local Authorities to assist those who might otherwise fall through the cracks.

Again, specific details on how and when these payments will be made have not yet been announced.