An Advance Payment is an interest free ‘advance’ of your future UC payments and will need to be paid back.
There are three type of Advance Payments:
New Claim Advance
New Claim Advance
To help you until you receive your first UC payment.
Budgeting Advance
Budgeting Advance
To help you with certain one-off costs.
Change of Circumstances Advance
Change of Circumstances Advance
To help you if your UC award is going to increase but you can’t wait for that payment.
See below for more information.
New Claim Advance
What is it and who can get one?
If you are making a new claim for Universal Credit and are going to find it difficult to wait until you receive your first payment, then you could receive a New Claim Advance.
See Getting paid for more information about when you will receive your first payment.
Do I have to pay it back?
Yes – it’s an interest free loan, normally paid back over 24 months out of your UC.
How much can I borrow?
The most you can get as a New Claim Advance is the amount of your first payment (the DWP will work out how much this is likely to be).
But you can take less – you do not have to accept what the DWP offer you.
Think carefully about how much you need now and the impact paying the Advance back will have on your future budget, see the table below.
Who can’t get one?
You will have to verify your ID before you can get a New Claim Advance.
How do I apply?
Apply on your online UC account or if you cannot access this, by ringing the UC helpline: 0800 328 5644.
You should find out the same day whether you are able to get one or not, and if you are, you should receive the payment within 2/3 days – it will be paid directly into the account you choose for your Universal Credit payments.
Budgeting Advance
What is it and who can get one?
Sometimes you’ll face unexpected expenses that you can’t afford.
You can apply for a Budgeting Advance to cover things like:
- A one-off item – eg replacing a broken fridge
- Work-related expenses – eg buying uniform or tools
- Unexpected expenses
- Repairs to your home
- Travel expenses
- Maternity expenses
- Funeral expenses
- Moving costs or rent deposit
- Essential items, like clothes.
Do I have to pay it back?
Yes – it’s an interest free loan, normally paid back over 24 months.
How much can I borrow?
You can borrow from £100 up to:
- £348 if you’re single without children
- £464 if you’re in a couple without children
- £812 if you have children.
Who can’t get one?
You can’t get one if:
- You’ve not, for the last 6 months, been on Universal Credit or Income Related Employment and Support Allowance or Income Support or Income Based Jobseekers Allowance or a combination of these benefits.
- You have earned more than £2,600 in the past 6 months (or for a couple, more than £3,600). This doesn’t apply if you’re wanting a work-related expense.
- And if you have more than £1,000 savings then your loan will be reduced by however much savings you have over the £1,000.
- And you can’t get another one if you are still paying off a previous one.
How do I apply?
Apply on your online UC account or if you cannot access this, by ringing the UC helpline: 0800 328 5644.
Changes in Circumstances Advance
What is it and who can get one?
You can apply for a Change in Circumstance Advance if you need some money to tide you over:
- Where there is a delay in you getting your Universal Credit payment, or
- Where your Universal Credit is about to increase significantly because you’ve had a change in circumstance such as finishing work, becoming a couple or having a baby,
- But the DWP also have to consider whether there is a serious risk of damage to the health or safety you or any member of their family. And that you have no other sources of support, such as other income, savings, wages etc.
How much can I get?
You’ll get half of the extra UC that your award is expected to increase by, due to the change in your circumstances.
Do I have to pay it back?
Yes – it’s a loan that is paid back – over 6 months or less.
How do I apply?
Apply on your online UC account, or if you cannot access this, by phoning the UC helpline: 0800 328 5644.
How do I pay it back?
Rather than having to pay it back in one lump sum, you will pay it back over 24 months – the DWP will make deductions out of your on-going Universal Credit payments.
You start paying it back out of your first Universal Credit payment.
| Amount Borrowed | If paid back over 24 months | |
|---|---|---|
| £200 | £8 | |
| £400 | £16 | |
| £600 | £25 | |
| £800 | £33 | |
| £1000 | £41 | |
| £1200 | £50 | |
| £1500 | £62 | |
| £2000 | £83 |
You’ll be told how much the monthly deductions will be when you apply.
If at any time having the deductions causes you severe financial problems, then the DWP can stop taking repayments for up to 3 months.
If you stop claiming Universal Credit, you will still have to repay what’s left of the Advance.
Example:
Precious is making a new claim for Universal Credit. She has just separated from her partner and needs help paying her rent.
She works and gets paid weekly, but this will not be enough to cover all her bills until she gets her first Universal Credit payment in just under 5 weeks time. So she logs into her online UC account and applies for an Advance Payment. She decides not to go for the full amount offered as she’s worried how she’ll cope with a large deduction being made from her UC payment. She requests £200 and to pay this back over a 24 month period. Her request is accepted, the £200 is paid directly into her bank account and her first Universal Credit payment is reduced by £8.33 – being the first repayment. She’s glad she only went for a low Advance because the DWP have taken another deduction out of her Universal Credit award for a Social Fund loan that she’d totally forgotten about and was still outstanding from 5 years ago.
IMPORTANT
Think carefully about how much you need – because your future UC payments will be reduced to pay it back.
REMEMBER
There may be other deductions taken out of your UC award reducing your payment further.
MAKE SURE
You will be able to pay your other bills and rent – think about your budget and what you will have to cut back on to be able to pay all your bills and buy the essentials that you need.