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What types of living expenses are covered? The available energy support and when the government will make further announcements

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In an effort to address the crisis caused by the UK’s high cost of living, Prime Minister Liz Truss is scheduled to announce a freeze on the energy price cap on Thursday.

Despite warnings that the plan might increase tax rates and lead to winter blackouts, Ms. Truss will borrow up to £100 billion to support it.

Her announcement comes as the annual price cap is expected to increase by 80% to £3,549. The most dire prediction to date suggested that average annual energy costs could reach £7,000 starting in April 2023.

However, Ms. Truss will now declare that the price cap will only go as high as £2,000.

In addition to the existing assistance programs announced under Boris Johnson, such as the £650 cost of living payment, the £400 energy grant, the additional winter fuel payment, and the disability grant, the freeze is also being offered.

Ms. Truss has opposed the notion of additional payments. In August, she reportedly said to the Financial Times, “Of course I will look at what more can be done. However, I would approach things in a conservative manner by lowering taxes rather than by handing out subsidies.

Here is a breakdown of the current payments and how Ms. Truss’ cap freeze might function.

What cost of living support is available?

£650 cost of living payment

All households receiving means-tested benefits, including those receiving the following benefits, will receive the £650 cost of living grant in two installments.

People started receiving the first installment of £326 in the second half of July. The second installment will come in the fall, though the exact date has not yet been determined.

People who qualify only for the child tax credit and working tax credit are the exception; they ought to have received their first payment between Friday, September 2, and Wednesday, September 7. The second payment will then be made to them in the winter.

The Department for Work and Pensions (DWP) claimed the delay was necessary to prevent tax credit recipients from receiving two payments.

The next installment will cost £324. The Government stated that the two payments are slightly out of balance in order to “minimize fraud risks from those who may seek to exploit this system.”

All eligible groups are exempt from taxes, the benefit cap is unaffected, and/or existing benefit awards are unaffected by the grant.

The grant can be obtained without applying. The payments should be automatically deposited into eligible individuals’ bank accounts with the code “DWP C O L” or something similar.

£400 energy grant

Every household in the nation will receive the £400 energy payment without regard to their financial situation.

Originally, households were supposed to receive a £200 discount on their energy bills in October. The money would then need to be repaid over five years starting in 2023, with customers paying an extra £40 a year on their bills.

However, the then-chancellor Rishi Sunak announced the discount would be increased to £400 and would no longer need to be repaid in late May, following much criticism.

Consumers will receive the £400 discount over a six-month period in installments starting in October. Energy suppliers will handle the administration of the grants.

The discount will be paid in two installments of £66 each in October and November. From December through March 2023, the monthly payment will increase to £67.

Whether people pay their bills on a monthly, quarterly, or annual basis, it will be offered on a monthly basis.

Payments made with credit cards, standard debit accounts, and payment cards for domestic electricity meter points will automatically be deducted from customers’ bills.

In the first week of every month, discount coupons will be given to people who use prepayment meters and top off their credit before using energy.

These will be delivered via text message, email, or postal mail and contain the most recent contact information clients have given suppliers.

Students and other tenants who rent from landlords who include fixed energy costs in their rental fees and who have domestic electricity contracts are also eligible for the discount. According to Ofgem regulations designed to protect tenants, in these situations, landlords who resell energy to their tenants should pass on the discounted payments appropriately.

No household should ever be questioned about their banking information. Ministers are advising consumers to be on the lookout for potential scams and report them when they are suspected to the appropriate authorities.

£300 winter fuel payment

The winter fuel payment, an annual tax-free lump sum provided by the Department of Work and Pensions, will be familiar to the majority of pensioners.

The government is increasing support for more than eight million pensioner households this year by £300.

Homes with residents who were born on or before September 25, 1956 will be eligible for the winter fuel payment.

Additionally, you have to spend at least one day in the UK from Monday, September 19 through Sunday, September 25, 2022.

You might still be eligible for the payment even if you were abroad during the qualifying week if both of the following conditions hold true:

If you reside in Cyprus, France, Gibraltar, Greece, Malta, Portugal, or Spain, where the average winter temperature is higher than that of the UK’s warmest region, you are ineligible for the payment.

If you qualify for the winter fuel payment, you typically don’t need to apply. The payment ought to be automatic for you.

If any of the following situations apply, you must make a claim if you have never received the payment before:

If you have any questions or would like to make changes to your payments, get in touch with the winter fuel payment scheme online, by phone, or by mail.

The claimant form is available here on the DWP website. The deadline for claims submission is March 31, 2023.

According to the government, pensioners should receive their £300 payment by the fall of 2022. You will receive a letter with the amount you will receive and the anticipated payment date.

By no later than January 13, 2023, you should receive payment.

£150 disability payment

If a person receiving disability benefits receives any of the following, they may be qualified for a £150 cost of living payment:

For May 25, 2022, you must have received payment of one of these qualifying benefits.

If you receive both a qualifying disability benefit from the Department for Work and Pensions (DWP) and a qualifying disability benefit from the Ministry of Defence (MoD), only the DWP will pay you.

According to the DWP, approximately six million people qualify for the payment.

The grant will start to be automatically paid on Tuesday, September 20. There’s no need for you to apply.

The majority of those who are qualified, according to DWP, “are expected to receive their one-off payment within a couple of weeks by the beginning of October.”

Payments will be made to individuals before those who receive a qualifying disability from the MoD.

The £150 disability payment is tax-free, won’t count toward your benefit cap, and won’t have any impact on any other benefits you may already be receiving.

How will a price cap freeze work?

The Prime Minister will declare that the price cap will not exceed £2,500 on Thursday in the House of Commons.

She has rejected Labour’s calls for a more extensive windfall tax on oil and gas producers and will instead finance the entire package through general taxation, which will result in an immediate increase in government borrowing.

The rise in global prices brought on by Putin’s conflict in the Ukraine and the militarization of Europe’s gas supply, according to Ms. Truss, has only served to highlight the need for greater long-term energy security and supply. We will act right away to assist individuals and businesses with their bills, but we will also take firm action to address the underlying issues, so that we do not find ourselves in the same situation again.

The Prime Minister has pledged not to raise taxes, but former chancellor Philip Hammond has questioned this commitment, saying: “If the Government contributes anything, the taxpayer will have to pay. There will undoubtedly be some taxpayer funding involved. The most important thing is to make sure that component is sustainable and logical.

“It might be financed by borrowing, in which case the tax increase and repayment might be postponed in the future. There is a problem, and the government is right to promise to assist citizens during the current energy crisis. However, we shouldn’t take that pledge to mean that the government will always be able to shield its citizens from changes in the fundamental cost of energy.

Insiders in the government claim that because the financial support package is a one-time intervention that won’t have a long-term impact on the deficit, it is not necessary to announce ring-fenced funding for it.

It was compared to pandemic-era interventions like furloughs by a source, who questioned why it was a problem then but not now.

The measure is “very poorly targeted,” according to Paul Johnson, director of the Institute of Fiscal Studies (IFS), and is unlikely to have an impact on those who are already struggling to make ends meet.

If this is a simple bill freeze, the majority of the money will go to better-off people who use more energy, he said on BBC Radio 4’s Today program.

This is therefore terribly mistargeted. Not only is it poorly targeted, but it also prevents us from seeing the complete price signal that consumers all over the world require.

“There is less gas available, which is why gas prices are so high. The Treasury and the Government appear to have run out of ideas for how to allocate it to the many millions who actually need it while avoiding giving it to the many millions who don’t.

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Micheal Kurt

I earned a bachelor's degree in exercise and sport science from Oregon State University. He is an avid sports lover who enjoys tennis, football, and a variety of other activities. He is from Tucson, Arizona, and is a huge Cardinals supporter.

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