Universal Credit rules explained: can you get £812 budgeting advance?
12th January 2021

STRUGGLING Universal Credit claimants can get a budgeting advance of up to £812 to help them get by.

The cash can be used to pay for emergency households costs such as buying a new cooker, funeral expenses or for help getting a job or staying in work.

The budgeting advance is a loan so it'll need to be repaid, but it could come in handy if you have sudden expenses and you're strapped for cash.

It's different to an advance payment, which is a loan to help you through the five-week wait for your first Universal Credit payment.

The maximum you can get for a budgeting advance is £348 if you’re single with no children or £464 if you are a couple with no children.

If you do have children, you can get up to £812 as a loan.

The lowest amount you can get for a budgeting advance is £100.

Below we explain all the rules, including who's eligible and how to apply.

The Sun wants to Make Universal Credit Work

UNIVERSAL Credit replaces six benefits with a single monthly payment.

One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7 million will be on it.

But there are big problems with the flagship new system – it takes five weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.

And while working families can claim back up to 85% of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to six months for the money.

Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.

It’s time to Make Universal Credit work. We want the government to:

  1. Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7million from being pushed into debt.
  2. Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
  3. Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.

Together, these changes will help Make Universal Credit Work.

Join our Universal Credit Facebook group or email [email protected] to share your story. 

Who's eligible for a budgeting advance and what can I use it for?

To get a budgeting advance, you must have:

  • Been getting 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 help you start a new job or keep an existing job
  • Earned less than £2,600 (£3,600 jointly for couples) in the past six months
  • Paid off any previous budgeting advances

How much you can get depends on whether you can pay the loan back and whether you have any savings over £1,000.

Your first £1,000 of savings will be ignored, but the loan amount you are offered will be reduced by £1 for every £1 you have over that first £1,000.

You can apply for a budgeting advance to cover things like:

  • A one-off item – for example, replacing a broken fridge
  • Work-related expenses – for example, 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

When do you pay it back?

Claimants who have taken out a budgeting advance loan have to pay it back within the first 12 months of getting it.

The Department for Work and Pensions (DWP) deduct an amount from your Universal Credit payment every month, starting with your first one.

You can work out how much will be deducted from your payment every month by dividing the full cost of the loan by 12.

For example, if you borrowed £812 you will see roughly £68 taken off your Universal Credit payment every month.

If you stop getting Universal Credit, you'll have to agree another way to repay the loan.

How to apply for a budgeting advance

You can apply for a budgeting advance by calling the Universal Credit helpline on 0800 328 5644, or 0800 012 1888 if you'd like to speak in Welsh.

An advisor will then look at whether you can pay the loan back – they'll see if you have any debts and how much you owe to help work this out.

The phone lines are open Monday to Friday, 8am to 6pm, and you'll normally get a decision on the same day.

Alternatively, you can apply through your online account or speak to your Jobcentre Plus work coach.

What other options do I have?

If your application is rejected, you can't appeal but you can ask for the decision to be looked at again.

It will help if you can give new evidence or show that your circumstances have changed since your first request.

If you're still rejected, you may be able to apply for help from the Flexible Support Fund.

The money can be used to help cover the costs of things such as childcare, uniforms, or work tools as long as they help you get a job.

This is only supposed to be issued if all other help has been exhausted – but that's not to say that you're not entitled to it.

Alternatively, it might also be worth seeing if you can get a grant to buy any white goods that have broken.

In August, there were 8,000 charities and organisations in the UK that offered cash to help struggling families.

Turn2Us has a free grants search tool so you can find out what help is available to you.

You’ll need to search for what’s available specifically in your area by entering your postcode.

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