The Department for Work and Pensions (DWP) offers Universal Credit claimants a potential loan of up to £812 through a Budgeting Advance to assist with urgent expenses. This financial aid, also known as a Budgeting Loan, can be utilized for various needs such as home repairs, additional support for work-related expenses, relocation costs, or funeral expenses.
Repayment of the loan is required through future Universal Credit payments, typically within a two-year timeframe, with no interest charges incurred. The borrowing amount can range from a minimum of £100 to a maximum of £812, depending on individual circumstances, with singles eligible for up to £348, couples up to £464, and those with children up to £812.
If an individual’s savings exceed £1,000, or £2,000 for individuals aged 63 or above, the loan amount available will be reduced accordingly. For instance, having £1,100 in savings would lead to a reduction of £100 in the Budgeting Advance or Budgeting Loan amount.
To qualify for a Budgeting Advance, one must have received Universal Credit for at least six months, or for a shorter period if the funds are necessary to secure or maintain employment. Additionally, earnings in the past six months should not exceed £2,600, or £3,600 for couples. For a Budgeting Loan, a claimant must have been receiving specific benefits for at least six months.
Applicants are ineligible for a second Budgeting Advance or Loan until the initial loan is repaid. Various circumstances outlined by Citizens Advice may qualify individuals for a budgeting advance. To apply, one can communicate through their Universal Credit online journal, contact the nearest jobcentre, or call the Universal Credit helpline at 0800 328 5644.
Even if Universal Credit claims cease, repayment of the budgeting advance remains obligatory. The DWP retains the right to liaise with employers or debt collection agencies for debt recovery if repayments are not made.
Universal Credit comprises a standard allowance as the base payment, with additional elements like child support or incapacity deductions factored in.