The Department for Work and Pensions (DWP) offers Universal Credit claimants a loan known as a Budgeting Advance to assist with urgent expenses, providing up to £812. This financial aid can be used for various purposes such as home repairs, work-related costs, moving expenses, or funeral expenses.
The Budgeting Advance or Budgeting Loan must be repaid through future Universal Credit payments within two years, without any interest charges. The borrowing amount ranges from a minimum of £100 to a maximum of £812, depending on individual circumstances, with singles eligible for up to £348, couples up to £464, and families with children up to £812.
Applicants with savings exceeding £1,000 (or £2,000 for those aged 63 or older) will have their loan amount reduced by the surplus savings. For instance, having £1,100 in savings would decrease the Budgeting Advance or Loan by £100.
To qualify for a Budgeting Advance, individuals must have received Universal Credit for at least six months, or less if the funds are required for employment purposes. Additionally, income thresholds apply, with earnings below £2,600 in the last six months (or £3,600 for couples) for a Budgeting Advance, and specific benefit claim requirements for a Budgeting Loan.
A second Budgeting Advance or Loan cannot be obtained until the first one is fully repaid. Eligibility criteria for a Budgeting Advance are detailed by Citizens Advice. Applications can be made through various channels including the Universal Credit online portal, local jobcentres, or the Universal Credit helpline.
Even if Universal Credit claims cease, repayment of the Budgeting Advance remains mandatory. The DWP reserves the right to recover outstanding amounts through employers or debt collection agencies if payments are discontinued.
Universal Credit comprises a standard allowance as the base payment, with additional elements factored in based on individual circumstances such as dependents or health-related incapacity to work.
