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Chancellor's 'decisive' cost of living crisis relief package welcomed by Highland MSP amid u-turn on windfall tax on oil and gas companies; Key measures outlined on energy bills and support for low income families on means-tested benefits

By Hector MacKenzie

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Highland MSP Jamie Halcro Johnston.
Highland MSP Jamie Halcro Johnston.

Commenting on yesterday's announcement by the Chancellor of the Exchequer Rishi Sunak on a new cost of living support package, Highlands and Islands MSP Jamie Halcro Johnston said: “It has been increasingly clear that sharp rises in the cost of living are threatening to hit people hard in the pocket.

“So I welcome this £15 billion package of measures, which builds on the support announced in March. This will be paid for in part by a levy on the high profits generated by oil and gas producers, which will be joined by safeguards to ensure exploration and development is not impacted.

“[The] proposals will ensure that those in the most vulnerable households – those with low incomes, pensioners and people with disabilities – will receive additional help. We will also see the £200 support given through energy bills double to £400, and no longer have to be paid back in subsequent years.

“There will still be more to do to tackle the cost of living and help will be needed from all levels of government. But I am pleased that the Chancellor is now taking decisive action to protect people across the whole of the UK.

“Some elements of the decision will lead to consequential payments to the Scottish Government which must be targeted to ensure they reach those most in need. I hope that Finance Secretary Kate Forbes will soon set out to the Scottish Parliament exactly how this additional resource will be used.”

The Treasury has produced a fact sheet about the measures

It includes:

Energy Bills Support Scheme doubled to a one-off £400:

Households will get £400 of support with their energy bills through an expansion of the Energy Bills Support Scheme.

As well as doubling the £200 of support announced earlier this year, the full £400 payment will now be made as a grant, which will not be recovered through higher bills in future years.

Energy suppliers will deliver this support to households with a domestic electricity meter over six months from October. Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher.

This support will apply directly for households in England, Scotland, and Wales. It is GB-wide and we will deliver equivalent support to people in Northern Ireland.

£650 one-off cost of living payment for those on means tested benefits:

More than 8 million households on means tested benefits will receive a payment of £650 this year, made in two instalments. This includes all households receiving the following benefits:Universal Credit

Income-based Jobseekers Allowance

Income-related Employment and Support Allowance

Income Support

Working Tax Credit

Child Tax Credit

Pension Credit

DWP will make the payment in two lump sums – the first from July, the second in the autumn. Payments from HMRC for those on tax credits only will follow shortly after each to avoid duplicate payments.

Claimants will need to be in receipt of one of these benefits, or have begun a claim which is later successful, as of 25th May 2022 to be eligible for the first of the two instalments. HMRC and DWP will provide further guidance, and the government will set out the eligibility date for the second instalment, in due course.

This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

The government will make these payments directly to households across the UK.

Legislation will be introduced shortly to allow payments to be made to this timetable.

One-off £300 Pensioner Cost of Living Payment

Pensioners are disproportionately impacted by higher energy costs, and many low-income pensioner households do not claim the means tested benefits they are entitled to.

So pensioner households will receive an extra £300 this year to help them cover the rising cost of energy this winter.

This additional one-off payment will go to the over 8 million pensioner households across the UK who receive the Winter Fuel Payment and will be paid on top of any other one-off support a pensioner household is entitled to, for example where they are on pension credit or receive disability benefits. Eligible households currently receive between £200 - £300, so the payment will represent at least double the support for this winter.

The Winter Fuel Payment (including the extra Pensioner Cost of Living Payment) is not taxable and does not affect eligibility for other benefits.

All pensioner households will get the one-off Pensioner Cost of Living Payment as a top-up to their annual Winter Fuel Payment in November/December. For most pensioner households, this will be paid by direct debit.

People will be eligible for this payment if they are over State Pension age (aged 66 or above) between 19 – 25 September 2022. There are certain circumstances where an individual above State Pension age does not qualify for the Winter Fuel Payment which can be found here on gov.uk [https://www.gov.uk/winter-fuel-payment/eligibility]

The government will make these payments directly to households across the UK.

£150 Disability Cost of Living Payment

Around six million people across the UK who receive the following disability benefits will receive a one-off payment of £150 in September:

Disability Living Allowance

Personal Independence Payment

Attendance Allowance

Scottish Disability Benefits

Armed Forces Independence Payment

Constant Attendance Allowance

War Pension Mobility Supplement

We know people with disabilities may face a wide range of additional costs, such as specialist equipment, specialist food, and increased transport costs, and this payment will help with these costs as they are likely to have increased. Claimants must be in receipt of, or have begun an eventually successful claim for, one of these benefits as of 25th May 2022 to be eligible for this additional payment.

For the many disability benefit recipients who receive means tested benefits, this £150 will come on top of the £650 they will receive separately.

These payments will be exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

The government will make these payments directly to eligible people across the UK.

£500m increase and extension of Household Support Fund

To support people who need additional help, the Government is providing an extra £500 million of local support, via the Household Support Fund, which will be extended from this October to March 2023.

The Household Support Fund helps those in most need with payments towards the rising cost of food, energy, and water bills.

The government will issue additional guidance to Local Authorities to ensure support is targeted towards those most in need of support, including those not eligible for the Cost of Living Payments set out on 26 May 2022.

This brings the total amount provided through the Household Support Fund to £1.5 billion since October 2021.

The Household Support Fund is administered by local councils in England and further information will be available directly from them. Eligibility will be determined by individual councils.

The Barnett formula provides a share of this funding to the devolved administrations in Scotland, Wales, and Northern Ireland so they can decide how to provide support.

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