Universal Credit claimants can get an emergency loan of £812 if they are struggling

FIGHT Britons with Universal Credit can get a loan to cover unexpected costs in the New Year.

Claimants can apply for the money worth up to £812, but must make plans to pay it back in the coming months.

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The Budgeting Advance is designed to help cover emergencies and other costs that come out of the blue when you use Universal Credit.

What is a budget advance?

You can borrow from €100 and up to €812 if you have a household with children, but you only need to apply to borrow what you need.

With the money you can cover one-off costs, such as replacing a broken refrigerator, the costs of moving or a rental deposit.

While this can help you cover larger costs in the short term if you don’t have savings to fall back on, you’ll still be expected to pay the money back in the long term.

The amount you borrow is usually repaid in twelve months. The amount of benefits you receive in subsequent months will therefore be lower.

If you stop getting Universal Credit, you will need to agree another way to repay the loan.

However, you only pay back the amount borrowed, because the loan is interest-free.

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

It’s worth checking first to see if there is other help you can get that you won’t have to pay back.

For example, you may be eligible for vouchers, subsidies or money through your municipality’s Domestic Support Fund.

What are my other options for emergency money?

If you’re struggling and need cash to cover overhead or daily living expenses, make sure you check these options before requesting a cash advance.

Firstly, it’s worth checking that you’re getting all the benefits you’re entitled to. You can use a benefits calculator to check this.

In addition to the Household Support Fund, municipalities also have other financial resources to distribute for social support.

There are different emergency finance options available depending on where you live in the UK, so you should get in touch your advice For more information.

You may also be able to apply for certain charitable grants if you encounter financial difficulties.

Turn2Us is a charity that helps people in financial difficulty access grants and support services.

Jonathan Chesterman, debt advice policy manager at debt advice charity StepChange, said: “If someone doesn’t have money for essentials such as food, then a food bank may be an option to consider – with the ‘benefit’ being that they don’t have to . refund everything and continue to receive full UC payment.

“Even if they have some money, but have to choose between heating and eating, for example, a food bank can be a short-term option.”

You can ask to borrow cash from family or friends, but remember that you will still have to pay this money back.

Be clear with them about what you will pay back if you are on the same page, as disagreements can often arise when money is involved.

Borrowing money through a Budget Advance is interest-free and if you borrow through a loan or credit card, you usually have to pay interest.

But you may be able to get a credit card that offers no interest.

You must check your eligibility, make the minimum repayments each month and pay off the full amount before the interest-free period ends.

Otherwise, you will pay back more on top of what you borrow and the interest can rise as high as 20% after the end of the zero period.

You should check interest rates to make sure you get the best deal by using comparison websites such as Uswitch or MoneySuperMarket.

However, top rates are usually only available to those with perfect credit scores. To check if you qualify for the cards with the best rates, MoneySavingExpert has a credit card eligibility calculator you can use.

If your credit score isn’t great, consider applying for a loan from a credit union.

These are locally based organizations where members pool their savings to lend to each other, often allowing them to offer cheap products.

Jonathan adds: “It is very important to note that borrowing from short-term lenders is not appropriate due to the costs of these loans and the potential for them to quickly spiral out of control.”

If you’re worried about debt, you can get free, friendly advice from a number of organisations:

How much can I get through a budget advance?

You can borrow a minimum of €100 through the Budget Advance and the maximum depends on your needs and circumstances.

• Up to €348 if you are single
• Up to €464 if you are part of a couple
• Maximum €812 if you have children

However, you cannot borrow the money if you have a certain amount of savings.

For every savings above €1,000, your loan amount will be reduced by €1 for every €1 you have left over.

If you have cash saved, this is often better than borrowing money.

Who is eligible for a budget advance?

You can apply for the budget advance if you have Universal Credit and a number of other benefits Citizen Advice says including:

• income-related benefit for job seekers,
• income-related employment and support benefit
• Income support
• Pension credit

You must have been receiving benefits for at least six months to apply for a budget advance, unless it concerns costs related to finding work or continuing to work, such as travel.

You must also have earned less than €2,600 in the previous six months before your application, or €3,600 if you live with a partner.

If you previously took out a budget advance and are still paying it off, you will not be able to get the loan.

How do I apply for a budget advance?

If you think a Budget Advance is the best option, you should call to apply.

The Universal Credit helpline is 0800 328 5644 and calls are free from landlines and mobiles.

You can also contact your local Job Center Plus or via your online Universal Credit account.