What is a Universal Credit advance, how do you apply and how quickly is it paid?

What is a Universal Credit advance, how do you apply and how quickly is it paid?

04/07/2020

UNIVERSAL Credit claimants who are struggling to make ends meet while waiting for their first benefit payment might be able to apply for an advanced loan.

More people than ever are applying for Universal Credit due to the coronavirus crisis, with almost one million new claimants signing up in just two weeks.

But it can take up to five weeks for people to get their first payment, leaving some families without any money to pay bills and buy food.

If you're struggling to bridge the gap, you might be eligible for an advanced loan on your first payment.

You will be expected to pay it back, so do keep this in mind if you're considering applying.

Here's everything you need to know.

What is an advanced payment?

An advanced payment is a loan that's designed to help you pay your bills and other essentials if you're in financial hardship while you wait for your first Universal Credit instalment.

You'll need to pay your advance back a bit at a time, either from your future Universal Credit payments, or from your wages if you're still paying it off after you stop receiving benefits.

But as it's an interest-free loan, you'll only be expected to pay back what you borrowed.

You’ll have up to 12 months to pay back the advance.

You can ask for your repayments to be delayed for up to three months if you can’t afford them, but this is only allowed in exceptional circumstances.

What to do if you have problems claiming Universal Credit

IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:

  • Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
  • Alternative Payment Arrangements – If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
  • Budgeting Advance – You may be able to get help from the Government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
  • Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your existing ones aren't enough to cover your rent.
  • Foodbanks – If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.

How much is the advanced payment?

Claimants can borrow up to 100 per cent of their estimated payment but you can also ask for less.

How much Universal Credit you get depends on your circumstances and income.

The standard allowance – the amount that everyone is entitled to if they're accepted on Universal Credit – has risen this week.

It comes following the end of the five-year benefits freeze, on top of an additional temporary boost announced by Chancellor Rishi Sunak to help claimants during the coronavirus crisis.

This is how the standard allowance changed this week:

  • Single, under 25  – rising from £251.77 to £342.72 (equivalent to £4,112.64 a year)
  • Single, 25 or over  – rising from £317.82 to £409.89 (equivalent to £4,918.68 a year)
  • Couple, joint claimants both under 25  – rising from £395.20 to £488.59 (equivalent to £5,863.08 a year)
  • Couple, joint claimants, one or both 25 or over  – rising from £498.89 to £594.04 (equivalent to £7,128.48 a year)

You may be entitled to extra money on top of this – check the GOV benefits calculator.

How long does the advanced payment take to process?

You’ll usually be told whether you've been successful in applying for an advance on the same day of your application.

The money will be transferred to you within three working days and is supposed to last the full five weeks before your first payment.

We've asked the Department for Work and Pensions (DWP) if they're experiencing any delays in processing advances due to coronavirus and we'll update this article when we know more.

How do I apply for an advanced payment?

JobCentres are currently closed due to coronavirus, so you'll need to apply over the phone or online.

You'll need to explain why you think you need the advance, verify your identity and provide bank details for the advance.

You can call the Universal Credit helpline on 0800 328 5644 – although you may experience long waiting times to speak to someone.

Claimants can also apply for their online account by clicking on the "apply for an advance" section.

When you apply for an advance online, the amount you can get will be shown on screen.

If you are part of a couple you will also be asked if your partner agrees to the advance.

Can I be refused an advanced payment?

Ultimately, it's up to the DWP to decide who is entitled to an advanced payment.

You won't be able to get one if the DWP thinks you have enough money to last you until your next payment.

You'll also be refused one if you have savings, are living with parents, relatives or friends, or if you haven't had your identity checked.

You can ask for the decision to be reconsidered but you don't the right to appeal it.

What other help is available?

If you're refused a loan but are in need of help, you can apply for a Budgeting advance to help you with any emergency household costs.

The smallest amount you can borrow is £100. You can get up to:

  • £348 if you’re single
  • £464 if you’re part of a couple
  • £812 if you have children

Budgeting advances are also repaid directly from your Universal Credit payments.

You may also be able to apply for the Flexible Support Fund.

In addition to this, you can also look into charity grants through national charity Turn2Us.

You may also be entitled to support via your local food bank.

Find out more about what Universal Credit is and whether you might be eligible for a claim.

The more you earn the less you'll get, because of the taper system – here's how it works.

Now you can check your Universal Credit claim online. Here's how log in to the website and the benefits.


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