UK New £500 One-Off Payment is Confirmed for These Households: Payday is Near: If you are a part of a working household that receives tax credits, you may be eligible for a new one-off payment of £500. The new payment is being introduced to provide extra support when the temporary increase in Working Tax Credit ends as planned on 5 April 2021.
UK New £500 One-Off Payment is Confirmed for These Households
UK households are in line for a financial lift, with offers of up to £500 in cost-of-living payments this January to splurge on food, energy bills, and other must-haves. Local council war chests have been boosted as the Household Support Fund is locked in until 2025.
With DWP cash handed to local authorities, it is down to them to share support for those feeling the pinch. The criteria for who gets the assistance vary. Solihull is dishing out £147 energy bill vouchers or a hefty £500 direct debt relief for those wrestling with utility charges.
You may get a one-off tax-free payment of £500 if, on 2 March 2021, you were getting either:
- Working Tax Credit
- Child Tax Credit, and you were eligible for Working Tax Credit, but you did not get a payment because your income is too high to get Working Tax Credit payments.
You need not contact HMEC or apply for the payment. HMRC will contact you by text message or letter in April to confirm you are eligible.
What is the one-off payment for?
The government announced in March that they would make a one-off £500 payment to certain working households in receipt of tax credits—broadly equivalent to £20 a week for 6 months. This is instead of the temporary £20-a-week increase to the basic element of the working tax credit that was in place until 5 April 2021.
2025 Cost Of living Payment Breakdown
The DWP will issue it in three waves over the course of the year, ranging from £301 to a total of £500. The phased schedule is designed with real-world seasonal spending patterns in mind, particularly energy usage.
- Phase 1 (March-May 2025): £301—offered early in the year to help households recover from steep winter costs.
- Phase 2 (July-August 2025): Up to £200, a summer top-up addressing higher mid-year costs.
- Phase 3 (October to December 2025): Remaining balance finalizing the full £500 in support before year-end.
How Payments Will be Delivered
Payments are sent straight to the bank accounts tied to existing benefit claims. This direct deposit method minimizes admin delays and keeps things straightforward. Straightforward. Still, it is important for recipients to ensure their personal details, especially bank info, are accurate and up to date.
And any change in benefit status should be promptly reported to avoid potential payment disruptions. If you miss a payment or notice an error, contact the DWP helpline as soon as possible to resolve the issue of the payments being delivered.
Why has the scheme been extended?
1.4 million households qualified for the payment under the original rules. To qualify under the original rules, on 2 March 2021, you must have:
- It had working tax credit elements included in your tax credit award calculation, and you had been awarded some working tax credit or child tax credit. I think I
The income changes during the year do not need to be reported, and so some people missed out on a payment even though, once their actual income was known, they would have qualified. The rules have been extended to ensure those people can qualify based on their finalized award.
Who qualifies under the extension
If you did not qualify for a payment under the Original rules, you may now qualify if , for a period that includes 2 March 2021, your final tax credits award for 2020-2021 shows you
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- It had working tax credit elements included in your tax credit award calculation.
- You been awarded some working tax credit or child tax credit
What if I have not received it?
If you think you should have received a payment either under the original rules or under the extension, you should contact HMRC’s tax credits helpline or tax credits web chat. You can only qualify under the extension if your award has been finalized.
Conclusion
In this article we discussed the UK’s new £500 one-off payment confirmed for these households: Payday is Near: If you are a part of a working household, then you can receive tax credits.