Final cost of living payment underway for people on benefits and tax credits

HM Revenue and Customs (HMRC) is making the payments to eligible tax credits customers across the UK between February 16 and 22 2024.

More than seven million eligible UK households have already received the £299 payment directly from the Department for Work and Pensions (DWP), which is paying its customers between February 6 and 22 2024.

This is the third of three payments totalling up to £900 for those eligible and on means-tested benefits, such as Universal Credit, Pension Credit, or tax credits in the 2023 to 2024 tax year and comes as part of the government’s £104 billion cost of living support package.

These payments are tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “The £299 Cost of Living Payment will deliver further financial support to eligible tax credits customers across the UK. To make things as simple as possible, the payment is made automatically with no action required from HMRC’s customers.”

The payment from HMRC to tax credits customers will appear on bank statements as ‘HMRC COLS’, referencing Cost of Living Support. Those receiving the payment from DWP will see the payment reference as their National Insurance number followed by ‘DWP COL’.

If customers have not received the Cost of Living Payment from HMRC between the published payment dates, but believe they are eligible, they should wait until after February 23 to contact HMRC.

This is to allow time for their bank, building society or credit union to process the payment.

The full list of benefit recipients that qualify for the third Cost of Living Payment of 2023/24 are those who are eligible and receive at least one of the following:

Universal Credit

Income-based Jobseekers Allowance

Income-related Employment and Support Allowance

Income Support

Working Tax Credit

Child Tax Credit

Pension Credit

For joint tax credits claimants, where one claimant receives Working Tax Credit and the other claimant receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit.

The number of payments made by HMRC has reduced over time, when compared with the 2022 to 2023 tax year HMRC payments, as people move from tax credits (HMRC) to Universal Credit (DWP) and may therefore receive their latest payment from DWP if they are eligible.

HMRC refers to ‘families’ alongside data about the number of payments it will make to tax credits customers. For HMRC tax credits purposes a ‘claimant family’ is a unit consisting of either an individual or a couple, and any dependent children.

Receiving a previous Cost of Living Payment does not guarantee customers will get this payment. Customers must meet the individual eligibility criteria for each payment, as published on GOV.UK.

Payment from HMRC will be made automatically into the bank account where eligible customers receive their tax credits. They do not need to do anything to receive a payment. They do not need to contact HMRC or apply for the payment.

HMRC is also warning customers of scams targeting Cost of Living Payments.

If someone contacts them about this payment saying they are from HMRC or DWP, it might be a scam.

People can check advice on spotting scams by visiting GOV.UK and searching ‘HMRC phishing and scams’. They can also check on GOV.UK that any contact is genuinely from HMRC.