Almost all of the eight million most vulnerable households across the UK will receive support of at least £1,200 this year, including a new one-off £650 cost of living payment. The UK government has confirmed this will include households in the north here on Universal Credit, Tax Credits, Pension Credit and legacy benefits.
The direct one-off cost of living payment of £650 for households on means-tested benefits will be paid out in two lump sums directly into claimants bank accounts – the first from July, the second in the autumn. Payments from HMRC for those on tax credits - who are also getting the same payment - only will follow shortly afterwards.
As well as this, a pensioner cost of living payment of £300 for pensioner households will also be paid out in November/ December alongside the Winter Fuel Payment and this also applies here in the north.
Further to this, a £150 disability cost of living payment to individuals in receipt of extra cost disability benefits paid by September.
Universal support increases to £400.
The government said this new £15 billion support package is targeted towards millions of low-income households and brings the total cost of living support to £37 billion this year.
New temporary Energy Profits Levy on oil and gas firms will raise around £5 billion over the next year to help with cost of living, with a new investment allowance to encourage firms to invest in oil and gas extraction in the UK.
The new Cost of Living Support package, the government says, will mean that almost all of the eight million most vulnerable households will receive at least £1,200 of extra support this year, including the £150 council tax rebate that many families received last month – equal to the average energy price cap rise over this year.
Mr Sunak also announced a £500 million increase for the Household Support Fund, delivered by Local Authorities, extending it from October until March 2023. This brings the total Household Support Fund to £1.5 billion.
To help pay for the extra support - which takes the total direct government cost of living support to £37 billion – the Chancellor said a new temporary 25% Energy Profits Levy would be introduced for oil and gas companies, reflecting their extraordinary profits. At the same time, in order to increase the incentive to invest the new levy will include a generous new 80% investment allowance. This balanced approach allows the government to deliver support to families, while encouraging investment and growth.
The Chancellor of the Exchequer Rishi Sunak said: “We know that people are facing challenges with the cost of living and that is why today I’m stepping in with further support to help with rising energy bills.
“We have a collective responsibility to help those who are paying the highest price for the high inflation we face. That is why I’m targeting this significant support to millions of the most vulnerable people in our society. I said we would stand by people and that is what this support does today.
“It is also right that those companies making extraordinary profits on the back of record global oil and gas prices contribute towards this. That is why I’m introducing a temporary Energy Profits Levy to help pay for this unprecedented support in a way that promotes investment.
“There is now more certainty that households will need further support, with inflation having risen faster than forecast and Ofgem expecting a further rise in the energy price cap in October.
“Today’s announcement is on top of the government’s existing £22 billion cost of living support which includes February’s energy bills intervention and action taken at this year’s Spring Statement including a £330 tax cut for millions of workers through the NICs threshold increase in July and 5p cut to fuel duty.”