LIFE

7 loopholes that mean you could miss out on cost of living payments

First published on Wednesday 12 April 2023

Millions of families are due to get their next cost of living payment later this month, but there are 7 reasons households could miss out on the support

The first part of this year's cost of living payment is due later this month and will deliver help to millions of struggling households.

The cost of living payment is a Department for Work and Pensions (DWP) payment, designed to help families with rising costs. It is part of a wider package of government support to help with the cost of living.

Eligible families do not need to apply for the payments and will receive them automatically – find out more information here.

The initial £301 payment will be made between 25 April and 17 May, while an additional £300 will be paid in the autumn plus £299 in Spring 2024.

However, despite over 8 million people set to get the support, some otherwise eligible families may miss out on the payment due to 7 loopholes.

Am I eligible for the payment?

Households eligible for the payment must have received certain means-tested benefits, such as Universal Credit, during the qualifying window of time of 26 January and 24 February this year.

Families must be claiming at least 1 of the following benefits:

  • Universal Credit
  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Pension Credit

However, there are some circumstances where families could miss out on getting Universal Credit during the assessment period for the cost of living payment, meaning they don't get the help.

Read on to find out 7 reasons your family could unknowingly miss out on the £301 of financial support ...

1. You've been sanctioned

If you've not kept up with your work search commitments for Universal Credit, you could be hit with sanctions.

And if you've received a Universal Credit sanction, this could mean you end up losing out on the cost of living payment.

Sanctions can reduce the amount of Universal Credit you receive, and in worst-case scenarios can mean you end up with nothing.

An award of £0 in the eligible period because of sanctions will mean you miss out on the cost of living payment.

You can appeal the decision if you've lost out on the payment over sanctions and believe it is unfair.

2. You've received a pay rise

Getting a pay rise could lead to your Universal Credit payments being stopped, meaning you'll no longer qualify for the cost of living support.

You could also miss out on the cash if you've received a backdated pay rise during the qualifying period, as this could lead to your Universal Credit payments being stopped.

3. You've received a bonus

Your Universal Credit payment could also go down to £0 if you received a bonus between 26 January and 24 February 2023.

The means-tested benefit being halted could mean you don't get the initial part of the cost of living payment.

4. You've worked overtime

If you've worked overtime, you could end up losing out on the financial support.

This is because your Universal Credit payments go down the more you earn, under the taper rate.

Although you might have a certain amount of money you can earn before the taper rate is applied, aka the work allowance, the reduction will otherwise be applied to all your earnings.

And if you've worked overtime, this may raise your earnings to such a level that your Universal Credit payment is stopped for the month.

If this applies to you during the eligible timeframe for getting the cost of living payment, you may end up going without.

5. You're paid every 4 weeks

For those paid Universal Credit every 4 weeks, if 2 of your pay days happen to fall in the same monthly assessment period, you could miss out on the benefit for the month.

Once again, if this happens to you during the same month as the qualifying cost of living payment timeframe, you may not get the support.

6. You received a cost of living payment from your boss

Sadly, if you've received a one-off cost of living payment from your boss, this extra money may count as earnings.

As a result, your Universal Credit payment could be halted, meaning you don't qualify for the first part of the cost of living payment.

7. You're not claiming a benefit you're eligible for

Make sure you've applied for all the relevant benefits you're entitled to.

Even if you're eligible to get a benefit during the qualifying timeframe for the cost of living payment, you won't be paid it unless you've claimed.

A spokesperson for Citizens Advice pointed out:

'This is an important one at the moment as benefits have been uprated and this means some people will have become entitled to Universal Credit and not realised.

'They need to check as Universal Credit can only be backdated for one month and in very specific circumstances.'

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