Universal Credit applicants under financial pressure this January can apply for an advance of up to £812.
The measure is known as an “advance budget” and can be used to help cover emergency household expenses.
Although the money will need to be repaid through reductions in future payments, it is considered by some to be a safer option than expensive payday loans and other lending methods.
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DerbyshireLive has helped explain how it works, who is eligible, and how you can apply.
How much can I borrow through a budget advance?
The smallest amount you can get is £100, and the largest is £812 if you have children.
The maximum amount varies depending on your individual circumstances, it can go up to:
- £348 if you are single
- £464 if you are part of a couple
- £812 if you have children
How much you can get depends on whether you can repay the loan and whether you have savings of more than £1000.
The amount you can borrow is reduced by £1 for every £1 you have saved above the £1,000 threshold.
Am I eligible for a budget advance?
You must meet certain criteria to receive a quote advance, which means that not all Universal Credit users will be accepted to receive one.
To be eligible for financial help, you must have been receiving one of the following benefits for six months or more:
These criteria will not apply if you need the money to help you start a new job or keep an existing job.
You must also have earned less than £2,600 (£3,600 together for couples) in the last six months and have paid any previous budget advances before you can be accepted for payment.
How do I pay my budget advance?
You will need to repay your budget advance through your future Universal Credit payments, but you will not be charged interest on the loan.
The first deduction is made on the day you receive your next payment after you’ve been accepted for the loan, and the full amount must be repaid within 12 months.
If you stop claiming Universal Credit, you will still need to repay your budget advance.
Payments must come from your salary, if you are now working, or from other benefits you may be receiving.
If you do not make payment arrangements, the dwp you can contact your employer to recover what you owe.
The DWP may also contact a debt collection agency to collect outstanding payments, so keep this in mind before requesting an estimate advance.
How do I request an advance estimate?
If you are experiencing difficulties and need an estimate advance, you will need to apply through your Jobcentre employment advisor.
They should explain how much you can borrow and how much you will have to pay back each month.
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