Universal Credit claimants could receive over £800 to help with unexpected costs
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Universal Credit is made available to individuals who are out of work, on a low income, or unable to work. The payment, overseen by the Department for Work and Pensions (DWP), is issued every month to eligible Britons to help with day-to-day costs. To be eligible, one must usually be 18 or over, but under state pension age and resident in the UK.
Individuals must also have less than £16,000 in savings between themselves and any partner they may have.
While claimants of Universal Credit can expect to receive a set amount every month, there may be additional costs one has to deal with.
Unfortunately, budgeting is not always the easiest task, especially if additional financial responsibilities crop up from nowhere.
A broken boiler, faulty washing machine or defective cooker could all be issues which blindside Britons and force them to meet additional costs.
Some may be worried about how to spread their Universal Credit payment when they may also have other responsibilities to meet.
Bearing this in mind, the DWP has established what is known as a Budgeting Advance, which is intended to help Britons in these situations.
Individuals may be able to get a Budgeting Advance in the following circumstances:
- For emergency household costs
- For getting a job or staying in work
- For funeral costs
The smallest amount individuals will be able to borrow on a Budgeting Advance is £100.
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Singletons will be able to get up to £348, while those in a couple are allocated up to £464.
However, for Universal Credit claimants who have children, the sum for a Budgeting Advance jumps up to £812.
The Budgeting Advance could prove a vital lifeline for individuals facing unexpected financial challenges.
While this is the case, it is important to note the advance is considered to be a loan.
This means Britons will be required to repay the sum they have borrowed through regular Universal Credit payments.
This could have an impact as it will mean a person’s payments will be lower until the advance is repaid.
The DWP has said it will inform claimants how much their payments will be reduced by.
How much a person will ultimately receive in a Budgeting Advance is dependent on circumstances.
Firstly, the DWP must determine the ability of the Universal Credit claimant to be able to pay the loan back.
Next, the DWP assesses how much a person has in savings over £1,000.
It reduces the loan amount it offers by £1 for every £1 held in savings over the £1,000 threshold.
A Budgeting Advance must be repaid within 12 months, and deductions are made from the day a person receives their next Universal Credit payments.
If a person moves off Universal Credit, they will still be required to repay the advance by other means, such as from wages or other benefits.
For Universal Credit claimants to be eligible, they must have earned less than £2,600, or £3,600 for couples, in the past six months.
Any previous Budgeting Advances must also have been paid off in order to receive a new one.
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