Cost of Living Support Measures
The government has introduced various measures to assist with the cost of living crisis. This article briefly explains what these measures are and what this means for your tax and benefits.
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What support is available?
The government published a factsheet on 26 May 2022 detailing the full range of measures to help people meet the rising cost of living. This is in addition to the non-repayable £150 Council Tax rebate for those in England in bands A to D announced previously.
Energy Bills Support Scheme
Support is being offered to help householders meet the higher energy costs through the Energy Bills Support Scheme. Under this scheme, from October 2022 householders in England, Wales and Scotland with a domestic electricity meter should automatically receive a £400 grant towards their energy bills.
We understand that in most cases this grant will be given as a reduction to your bill via your energy supplier so will not count as income and are not taxable. The government has confirmed that those on a pre-paid electricity meter will also benefit from the scheme. The grant does not need to be paid back.
We understand that the UK government will deliver equivalent support to people in Northern Ireland.
Household Support Fund
The government has increased the Household Support Fund in England, which was first introduced in October 2021 and is operated by local councils. Contact your local council for more information and to see if you are eligible for assistance. Most councils will have a dedicated webpage setting out the help available, so if you enter ‘Household Support Fund’ plus the name of your local council or county council in your search engine, you should be able to find the information you need.
Wales, Scotland and Northern Ireland also receive funding from the UK government to run similar schemes of their own. If you live these areas, contact your local council or welfare rights adviser to see what support is available.
Welfare grants such as that from the Household Support Fund are not usually counted as income for tax or benefits purposes. If you do receive a grant from your local council you may wish to ask them to confirm the position.
Cost of Living payments
Finally, the government will also be making ‘Cost of Living’ payments to support certain groups of people:
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Cost of Living Payment of £650 for those on means tested benefits, including Universal Credit or tax credits
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Winter Fuel Cost of Living top up of £300
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Disability Cost of Living Payment of £150
You can read more about the Cost of Living payments, including eligibility requirements and how and when payments may be received on GOV.UK.
GOV.UK guidance confirms that if you qualify for any of the Cost of Living payments above, then they are not subject to income tax or National Insurance and do not need to be entered on your tax return, if you do one.
The guidance also says that Cost of Living payments do not affect your entitlement to means-tested benefits or tax credits.
Where can I get more help?
There is a new Government site to help you find out what other benefits and financial support you might be able to get to help with your living costs.
If you are unsure about whether you qualify for the above support or would like to check your entitlement to welfare benefits more generally, you might wish to consider speaking to a welfare rights adviser.
You may also find our recent articles helpful on possible help through the tax and benefits systems with working from home and business mileage costs.