Financial help is available.
Anyone claiming Universal Credit in the UK can apply for an advance payment of up to £812, which will be a welcome boost for many.
This so-called ‘budget advance’ is intended to help with unexpected household expenses, but it should be noted that this is money that will have to be paid back, usually through a cut in future Universal Credit payments.
However, if you are short of money and do not want to take out an expensive loan or other type of loan, it may be considered a safer option.
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What is the maximum amount I can borrow?
If you have children, the minimum amount you can borrow is £100, and the maximum is £812.
Your particular circumstances will influence the amount you can borrow, although you may be entitled to a maximum:
- If you are single, the cost is £348.
- If you are in a couple, the cost is £464.
- If you have children, the cost is £812.
The amount you get is determined by how likely you are to repay the loan and whether you have more than £1,000 in savings, as the amount you can borrow is reduced by £1 for every £1 you have in savings above the £1,000 limit.
Can I draw on the budget advance?
The Budget Advance is not available to everyone claiming Universal Credit, as you need to have been in receipt of one of these benefits for at least six months:
- Universal Credit (UC)
- Income-based ESA (Employment and Support Allowance)
- Income Support Allowance (ESA)
- Income-based Jobseeker’s Allowance (JSA)
- State Pension Credit
In addition, you must have earned less than £2,600 – £3,600 for couples – in the previous six months and you must have paid any previous budget advance before being approved for this help.
The advance must be repaid
The budget advance will be repaid from future Universal Credit payments, but no interest will be charged on the loan.
If you stop applying for Universal Credit, you will have to repay the advance.
Payments could be deducted from your wages or other benefits, and if you do not repay, the Department for Work and Pensions (DWP) may contact your employer or enlist the help of a debt collection agency.
