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The Department for Work and Pensions (DWP) is a public service department in the UK. DWP is responsible for pensions, child maintenance, and welfare policy.

They provide for a range of customers and claimants, which include the working population, people with disabilities, and people who require health benefits. DWP will begin with the second instalment of the cost-living payments. These payments are given to those eligible for low-income benefits.

With the increase in fuel prices and overall cost of living, the UK government has announced these packages to help out millions of homes across the country. The cost-of-living payments help out the consumers because the prices are constantly rising due to inflation.

This guide will take a closer look at these payments and who qualifies for them. We’ll also discuss the universal benefits low-income households receive and what the Department for Work and Pensions (DWP) does. If you want to learn more about certain tax reliefs or benefits, visit IBISS & CO. today for a tax accountant consultation in London.

Risin Inflation and Cost of Living

Millions of households in the UK will be affected this winter because of high inflation, soaring energy prices, and extremely unaffordable cost of living. Incomes haven’t matched the rate at which the prices are rising, and most people can not even meet a decent standard of living.

The DWP and Its Responsibilities

Currently, the Department for Work and Pensions (DWP) is offering benefits to households across the UK affected by poverty. They deal with poverty and its causes rather than managing the symptoms. The DWP handles child maintenance, welfare, and pension policies. They encourage people to work and earn.

The DWP’s aim behind offering various benefits to people with health issues or a disability is to make them self-sufficient and independent. They provide decent income to those who have reached the state pension age and help them save up for retirement. This department helps provide real value for money and reduce serious workplace-related deaths/injuries.

According to the DWP, their priorities are to increase savings and security for people in their life, especially as they age. The department also prioritises an effective and transparent welfare system in the UK so people can achieve financial independence. They also provide guidance and assistance for finding employment.

The DWP has managed to create an affordable and fair welfare system which has been improving the lives of children, offering exceptional services to claimants and customers, and transforming the way services are delivered efficiently with reduced costs.

What is Universal Credit?

People in the UK who are unemployed, looking for jobs, or want to find employment whilst working receive a benefit payment known as Universal Credit. It replaces different tax credits and benefits low-income households may receive, such as child tax credits, housing benefits, working tax credits, income support, job seeker’s allowance, etc.

The DWP offers these “legacy benefits,” and people can not make new claims for these benefits. If someone wants extra support, they would have to claim Universal Credit. Those receiving the legacy benefits will continue to get them unless the DWP moves them towards Universal Credit.

Calculator and bill

What is Pension Credit?

If you’re above the state pension age and on a low income, you can qualify for pension credit. There are two aspects of this: savings credit and guarantee credit. If you reached the pension age before 6 April 2016, you can qualify for the savings credit. You can claim the guarantee credit if you crossed the state pension age on or after this date.

Pension credit is worth claiming, even if you only get a small amount. It will help you claim and qualify for various DWP benefits while also getting extra income.

Guarantee Credit

If you are single, the weekly guaranteed credit will increase your weekly income to £182.60. If you have a spouse or civil partner, this figure will be £278.70.

Savings Credit

If you’ve been making provisions for your retirement savings or have a pension besides the state pension, you will get some extra money in the form of a savings credit.

Here are the extra income payments provided through savings credit:

  • Single Person: £14.48 per week,
  • Married Couples, Live-in Partners, or Civil Partners: £16.20 per week.
Man reading about the cost of living in the UK

Cost of Living Payments

If you’re entitled to certain tax credits or benefits, the cost of living payment will be an extra payment for you. Currently, every vulnerable household in the UK is receiving £1,200 as part of this support scheme. There will also be a £150 council tax rebate. The other households in the country will be getting a £400 discount on their energy bills.

Currently, the UK will aim for a £5 billion profit on gas and oil, and the government hopes to borrow £10 billion. This extra help will serve as a lifeline for disabled households in debt and spiralling because of the high living costs. Many people are at their “breaking point” because they have disabled loved ones to care for.

Many people are still on the fence about these cost of living payments because even if they do qualify for it and eventually receive it, it will only be a temporary relief. Additionally, these cost of living payments are a measure for individuals, not the entire household. Let’s take a look at some of the support that is currently available.

By now, £650 has been paid. This payment might have been in two chunks of £326 and £324. This is because if you’re receiving Universal Credit, working tax credits, pension credits, income support, child tax credits, and job seeker’s allowance, you need to be eligible for an assessment period from 26 April 2022 to 25 May 2022.

For partners with a joint claim, one will get £326, and the joint claim would be worth £324. You won’t be able to claim jobseeker’s allowance, employment and support allowance unless you have Universal Credit.

If you have the following tax credits, you will get the £650 payment in two lump sums as well. The tax credits can be the child and working tax credits. For joint partner claims, one payment will be worth £326 and the second joint claim payment will be worth £324. If you’re receiving both the tax credits we mentioned, your cost of living payment will only be for Child Tax Credit.  

Getting More Than One Payment

Some individuals and households can qualify for a special arrangement of the cost of living payments. We’ve discussed it in detail in this guide. A pensioner who has been receiving attendance can also qualify for the pensioner payment and disability payment. They can also get an attendance allowance if they have already been claiming the pension credit.

Pensioner Cost of Payment

For people above the state pension age, there will be a one-off payment of £300. Those eligible for this ‘Pensioner Cost of Living Payment’ will be getting it as a top-up for their Winter Fuel annual payment. It will be paid in November or December. This amount is not taxable and will act as a top-up for pension credits or disability benefits. This payment will not affect any other benefits.

Energy Bills Grant

Energy bills cost of living payment is worth £400. The UK Government pays this amount directly to the energy suppliers delivering electricity or water to a household. If the customers pay through their debit or credit card, this money will be credited to their accounts.

This payment doesn’t have to be repaid by the household and is a support top-up for their council tax rebate of £150.

Who Doesn’t Qualify for the Payment?

Unless you’re receiving Universal Credit, you won’t be getting the cost of living payment if you claim the below-mentioned benefits.

  • Contributory Employment & Support Allowance
  • Employment & Support Allowance
  • Jobseeker’s Allowance

You will be able to claim £150 if you’re currently getting disability benefits or any of the following:  

  • Adult Disability Payment
  • Attendance Allowance
  • Armed Forces Independence Payment
  • Child Disability Payment
  • Constant Attendance Allowance
  • Disability Living Allowance for children/adults
  • Personal Independence Payment
  • War Pension Mobility Supplement


If you’re qualifying for any of these benefits and have received a payment from the DWP, the  Disability Cost of Living Payment will also be from them. Payments started from Sep 2022 onwards, and you will get an additional payment if you’ve qualified for low-income benefits/tax credits.

Housing Benefit

Another cost of living payment offered by the UK government is Housing Benefit. You can qualify for this benefit if you need help paying some or all of your rent. Low-income households can claim this benefit, depending on whether someone is working or not.

If you or your partner have reached the state pension age, you’re receiving pension credit, or you’re living in a specified or temporary accommodation, you can claim the housing benefit. You can check if you’re qualified for this benefit right here.

Council Tax Reduction

This new scheme replaced the previous one on 1 April 2013. You can qualify for this if you have a low income or claim other benefits. Your bill will be reduced completely. If you are unemployed, working, living in your own home, or renting a home, you can still apply for this.

Child Support Agency and Child Maintenance Service

This is another financial support offered by the DWP, where they help a child if he/she doesn’t have family-based living arrangements. If the parents have separated or the child doesn’t have parents, they offer support toward his/her’s everyday living costs.

Child maintenance service also helps parents who were in an abusive living situation or experienced domestic abuse. It doesn’t affect any other benefits the child or parent has received.

Other Payments

  • Funeral Payments.
  • Cold Weather Payments: You don’t have to claim for this. It will be available for you if you already have income-related benefits and live in exceptionally cold areas like Newham.
  • Budgeting Advance and Budgeting Loans.
  • Low-Income Scheme: The NHS offers this help for certain healthcare-related costs like prescriptions, dental care, eye care, and travel.
  • Jobseeker’s Allowance: This is a regular payment for those who are looking for work, have no job, or working 16 or fewer hours per week.

Personal Tax Advisors in the UK

If you’re receiving certain benefits from the UK government and want some tax relief, you can check us out at IBISS & CO. We have expert charted accountants and tax advisors on our team who can find new and innovative legal ways of helping you reduce the tax you pay.

IBISS & CO. is a professional tax and accountancy firm operating in London, Walsall, and other South East areas of England for 25 years now. We’ve been helping businesses and individuals with their tax requirements and other advisory needs.

In recent times of inflation and rising prices, IBISS & CO. has been helping out various clients minimise tax liabilities and payments. We charge market-competitive rates for their services and can help you out with property tax planning, inheritance tax planning, and capital gains tax advice.

If you’re looking for a personal tax advisor in the UK who can offer you valuable business and individual tax advice, you can reach out to us today. We will offer you a consultation and proceed with their service when you’re clear about everything. Our advisors can also help you out with any other information you need regarding tax credits and government benefits.

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