Rishi Sunak has said around eight million of the lowest income households will be sent a one-off payment of £650.
The Chancellor told MPs: 'We need to make sure that for those whom the struggle is too hard and for whom the risks are too great they are supported.'
Those on Universal Credit, Tax Credits, Pension Credit and legacy benefits will receive the payment automatically.
This afternoon the government set out a £15 billion package of support in the House of Commons to help people deal with the cost of living crisis, with inflation at 9% and energy bills set to rise again in October when Ofgem raises the price cap.
It comes the day after Sue Grey finally released her report into rule breaking gatherings in Downing Street while the country was in lockdown.
Boris Johnson apologised for the breaches but refused to step down, despite several Tory MPs saying that they thought he should resign.
Mr Sunak insisted that the government is ready to support those struggling to pay bills.
He said: 'Our policy will provide a larger average payment this year of £650 whereas uprating the same benefits by 9% would be worth only on average £530.'
On help for pensioners, Mr Sunak told the Commons: 'From the autumn we will send over eight million pensioner households who receive the winter fuel payment an extra one-off pensioner cost-of-living payment of £300.
'Disabled people also face extra costs in their day-to-day lives, like having energy-intensive equipment around the home or workplace.
'So to help the six million people who receive non-means tested disability benefits we will send them, from September, an extra one-off disability cost-of-living payment worth £150.
'Many disabled people will also receive the payment of £650 I've already announced, taking their total cost-of-living payments to £800.'
Martin Lewis described the announcement of the £650 payment as 'the big one'.
He said that as it is linked to benefits, it would be sent directly to people's bank accounts.
Ben Harrison, director of the Work Foundation at Lancaster University, said: 'The one-off payment of £650 to low income households is significant, and as it will be made via the benefits system it will land direct in the bank accounts of those who need it most.
'But the wait to provide this support has already caused significant damage, and delaying part of this payment to the Autumn risks compounding this.
'The UK Insecure Work Index shows that one in five (6.2 million) workers in the UK live in severe insecurity, unsure of how many hours they can work or much money they will earn. Making piecemeal announcements every few months only adds to the anxiety and uncertainty they face.'
The other announcements
Rishi Sunak announced a u-turn saying he would tax oil and gas giants more , months after Labour began calling for the move.
He called the temporary one-off tax an 'energy profits levy' and predicted it would raise around £5 billion in a year.
Firms will be charged 25% on extraordinary profits, which have surged because of the invasion of Ukraine and the coronavirus pandemic.
He also announced an 80% investment allowance to calm fears that the move could put off North Sea firms' investment. This will save them 91p for every £1 they spend.
A universal grant
This replaces the previous energy bills discount, which was effectively a loan of £200.
It has now been doubled and will not need to be paid back.
Separate one-off payments of £300 will go to pensioners and £150 for those receiving disability benefits.
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