HOUSEHOLDS with Universal Credit can receive emergency support to help cover the costs of essentials.
The money comes in the form of a budget advance, which could help families with rising energy bills and rising inflation.
The budget advance should not be confused with a cash advance, which is a loan to help you wait five weeks for your first Universal Credit payment.
Here's everything you need to know about the loans, who qualifies, what you can get and more.
What is the Universal Credit budgeting advance?
The budget advance is an interest-free loan that can be used to cover certain expenses, such as household furniture and equipment, and clothing.
It is of course a loan, which means you have to pay it back.
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Be careful not to confuse the budgeting retainer with a retainer.
An advance is a loan to help you get through the five-week wait for your first Universal Credit payment.
Who is eligible for the Universal Credit budgeting advance?
To get a budget advance, you must have:
- You have been receiving Universal Credit, Employment and Support Allowance, Income Support, Jobseeker's Allowance or State Pension Credit for six months or more, unless you need the money to start a new job or keep an existing job
- Earned less than £2,600 in the last six months (£3,600 jointly for couples)
- All previous advances on the budget paid off
The amount you can get depends on whether you can pay it back and whether you have more than € 1,000 in savings.
Your first €1,000 of savings is ignored, but the loan amount you are offered is reduced by €1 for every €1 you have over it.
You can request a budget advance for matters such as:
- A one-time thing, for example replacing a broken refrigerator
- Work-related expenses – for example, buying uniforms or tools
- Unexpected expenses
- Repairs to your home
- Travel expenses
- Pregnancy costs
- Funeral costs
- Moving costs or rental deposit
- Essential items, such as clothing
How much can I get?
The most you can get for a budget advance is £348 if you are single and have no children. This increases to €464 if you are a couple without children.
If you do have children, you can borrow a maximum of €812 if you or your partner apply for child benefit.
The lowest amount you can get for a budget advance is €100.
If you have more than £1,000 in savings, the amount you can borrow will be reduced depending on anything above this threshold.
For example, a single person with €1,001 in savings will have €1 deducted from the maximum loan amount, allowing him to borrow up to €347.
What can I use the budgeting advance for?
A budget advance can be used to pay for emergency expenses such as replacing a broken stove, finding a job or continuing to work, or funeral costs.
It can also be used to pay for shoes or clothes.
When do I repay the budgeting advance?
Claimants who have taken out a budget advance loan must repay it within the first twelve months of obtaining it.
The Department for Work and Pensions (DWP) will deduct an amount from your Universal Credit payment every month, starting with your first.
You can calculate how much will be deducted from your payment each month by dividing the full cost of the loan by 12.
For example, if you borrowed £812, around £68 will be taken from your Universal Credit payment each month.
If you stop getting Universal Credit, you will need to agree another way to repay the loan.
How do you apply for a budget advance?
You can apply for a budget advance by calling the Universal Credit helpline on 0800 328 5644, or 0800 012 1888 if you want to speak Welsh.
An advisor will then assess whether you can repay the loan. He or she will check whether you have debts and how much you owe to resolve them.
The phone lines are open Monday to Friday from 8am to 6pm, and you will normally receive a decision on the same day.
You can also apply via your online account or speak to your Jobcentre Plus work coach.
What can I do if my advance application is rejected?
If your application is rejected, you cannot appeal, but you can request that the decision be reconsidered.
It will help if you can provide new evidence or show that your circumstances have changed since your initial request.
If you are still rejected, you may be able to apply for help from the Flexible Support Fund.
The money can be used to cover the cost of things like childcare, uniforms or equipment, as long as it helps you get a job.
This should only be issued as a last resort when all other options have been exhausted.
Alternatively, it may also be worth seeing if you can get a grant to buy broken white goods.
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Find out more about what Universal Credit is and whether you may be eligible to make a claim.
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