Tax Credits: When will claimants receive the second Cost of Living Payment? | Personal Finance | Finance
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The Cost of Living Payment is a £650 one-off payment announced as part of former Chancellor Rishi Sunak’s plan to combat the spiralling cost of living crisis. The payment was made available to recipients of means-tested state benefits, such as Child or Working Tax Credit, Income-Based Jobseeker’s Allowance (JSA), Income-Related Employment and Support Allowance (ESA), Income Support, Pension Credit and Universal Credit. The £650 cash was split into two separate payments of £326 and £324 as a way of combatting fraud with the first payment being paid in July earlier this year.
Those on Tax Credits or Child Tax Credits, however, due to their benefit being paid by HM Revenue and Customs rather than the Department for Work and Pensions (DWP) receive their first instalment later on in September.
According to the HMRC, one million people claiming Tax Credits received this payment which totalled around £360million.
The DWP announced that the second payment of £324 is to start being paid out between November 8-23.
Previously, the DWP said that Tax Credit claimants would get the second instalment later into the winter.
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However, it has now been confirmed that these claimants will receive the second instalment “shortly after people on the low-income DWP benefits have been paid”.
This indicates that the second instalment will be paid sometime after Wednesday, November 23.
People will be eligible for the second cost of living payment if they received, or later received Tax Credits for any day in the period between August 26, 2022 to September 25, 2022.
This could either be a payment of Tax Credits for the tax year 2022 to 2023 or an annual award of at least £26 of Tax Credits for the tax year 2022 to 2023.
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If eligible, the money will be paid automatically into bank accounts, so people don’t need to do anything to get this extra help.
HMRC confirmed if a person receives both Child Tax Credit and Working Tax Credit, then they will only receive a Cost of Living Payment for Child Tax Credit.
The Government also confirmed that if a person receives Tax Credits from HMRC and a low income benefit from DWP, then they will only get a Cost of Living Payment from the DWP.
If someone had a joint claim between the eligible dates, then a single payment of £324 will be sent using the same payment method used between these dates, if they are eligible.
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The DWP has said that more complex claims or those awaiting an award decision might have to wait a little longer while their cases are resolved.
This warning would be for those who are awarded their qualifying benefit at a later date or have changed the account their benefit or tax credits are paid into.
The Government departments stated that they are using a computer programme to identify those who are eligible to receive the Cost of Living Payments.
If someone believes that have missed their payment but are entitled to the money, then they are recommended to raise it with the office that pays their benefits.
The £650 Cost of Living Payment is part of the Government’s £37billion package which is set to provide over eight million households with an extra £1,200 to help with the financial crisis.
Other schemes which form the cost of living package included a £150 payment to people with disabilities, the £150 council tax rebate for every household in the UK, and the £400 discount on all household’s energy bills between October and March of next year.
In addition, Liz Truss’s Government has also capped the average household energy bill at £2,500 a year as part of its Energy Price Guarantee
However, this is not an absolute limit and households may pay more than this depending on how much energy they use.
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