LIFE

Families on Universal Credit could miss out on £900 cost of living payment

Last modified on Friday 24 February 2023

Thousands of people earning 'slightly too much' could be affected, according to the Institute for Fiscal Studies (IFS).

A new report has warned thousands of families could miss out of the £900 cost of living payment.

In a new warning issued this week, the Institute for Fiscal Studies (IFS) think tank warned around 825,00 people could be affected.

Why could people miss out on the payment?

The cost of living payment is paid out in 3 instalments. It's designed to help people on certain benefits with the cost of living.

But to be eligible for the cost of living payment, you need to be on Universal Credit at least 1 month before each payment is due.

So if you earn different amounts each month – and happen to earn 'slightly' more in the qualifying month – you could miss out.

The IFS report explains: 'We estimate that, as a result, in each of the three relevant months there will be around 825,000 people who earn slightly more than is consistent with Universal Credit eligibility and who, as a result of missing out on the cost-of-living payment, end up with less income than other similar people who earn less.'

'Better off if you earn less'

In fact, the IFS say you could be better off if you earn less.

And they've called on the government to make sure normal benefits keep pace with inflation.

Currently, benefits and Universal Credit are set to rise in April in line with September's inflation rate of 10.1%.

A Department for Work and Pensions spokesperson said: 'We recognise the pressures of the rising cost of living, which is why we also delivered £1,200 of direct, targeted support to millions of vulnerable households last year, and will be providing a further £1,350 of support in 2023-24.'

Who is eligible for the £900 cost of living payment?

More than 8 million people will receive the free cash, paid directly into their bank accounts.

If you qualify for the cost of living payment , you'll receive 3 payments over the next financial year (from April 2023-April 2024)

To be eligible for the payment, households need to be claiming at least 1 of the following:

  • Income-based jobseeker’s allowance
  • Income-related employment and support allowance
  • Income support
  • Pension credit
  • Tax credits (child tax credit and working tax credit)
  • Universal Credit

How much are benefits increasing by in April?

Universal Credit payments will change as follows:

  • If you’re a single person over 25 currently claiming universal credit, your allowance will rise from £334.91 a month to £368.74 a month.
  • If you’re a couple under 25 claiming universal credit, your allowance will rise from £416.45 a month to £458.51 a month.
  • If you’re a couple and one or both of you are over 25, your allowance will rise from £525.72 a month to £578.82 a month.

Child benefit will also see an increase of £2.20 and £1.45 respectively per week from April and means the new, regular four-weekly payments will be £96.00 for an eldest or only child (an increase of £8.80) and £63.60 for any additional children (an increase of £7.60).

Over the next financial year, this means parents will receive an additional £114.40 and £75.40 respectively.

Related content

Martin Lewis' warning to anyone who has taken time off to look after kids

CHAT: Share your budgeting tips

The 'secret' Amazon website you'll love