IF you're struggling with the gap between applying for Universal Credit and getting your payments, you may be able to get an advanced loan.
It can take up to five weeks before you are enrolled on the system, and in the meantime any existing benefits you receive will stop altogether.
It's this waiting period that plunges vulnerable people further into debt, which is why The Sun is calling for it to be slashed to two weeks as part of our Make Universal Credit Work campaign.
In the meantime, we've put together a guide to all you need to know about advance payments before taking one out.
What is an advance payment?
An advance payment is a loan that you can ask for to help you through the five week wait for your first Universal Credit payment.
It's designed for people who need help to pay the bills or cover other costs while they wait.
Claimants can borrow up to 100 per cent of their estimated payment but you can also ask for less.
It's an interest-free loan which means you will only pay back what you borrow. But remember, you will be expected to pay it back.
The money will be transferred to you within three working days and is supposed to last the full five weeks before your first payment.
You can also get an advance payment if your circumstances have changed and you will get a larger payment, but you aren't getting the increased amount yet.
In this case, you can't apply online. Instead, you need to apply by ringing the helpline.
How do you apply?
You can apply for an advance payment in your online account or through your Jobcentre Plus work coach.
You're allowed to request the loan from the moment you first apply for Universal Credit until the date you get your first payment.
You'll need to explain why you think you need the advance, verify your identity (at your first Jobcentre Plus interview) and provide bank details for the advance.
If you can't open a bank account, speak to your work coach.
You'll usually be told the same day if you will get your advance loan.
If you need help, call the Universal Credit helpline on 0800 328 5644 (Textphone: 0800 328 1344).
Lines are open from 8am-6pm, Monday to Friday.
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit pay out.
Alternative Payment Arrangements– If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
Budgeting Advance – You may be able to get help from the government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your payments aren't enough to cover your rent.
Foodbanks – If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussel Trust website.
When do you pay it back?
Claimants who have taken out a loan are expected to pay it back within the first 12 months of getting it.
The Department for Work and Pensions deduct an amount from your Universal Credit payment every month, starting with your first pay out.
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 £1,500 you will see £125 taken off your Universal Credit payment every month.
You can ask for your repayments to be delayed for up to three months if you can't afford them, but this will only be allowed in exceptional circumstances.
If you apply for an advance online you will be shown on screen the repayment amounts for different repayment periods.
If you ring the helpline and are successful in your application they will tell you over the phone:
- how much you can have
- the monthly repayment amounts
- when the first repayment is due
Do you still have to pay it back even if you're no longer on Universal Credit?
You will still be expected to repay the loan even if you get a job and are no longer claiming benefits.
You'll get a letter telling you you how much you owe.
If you can't afford to pay it all back you need to contact the DWP Debt Management contact centre.
They can help you workout an affordable repayment plan and also support you in setting up monthly direct debits and paying in slips for cash or cheques.
You can call the Debt Management centre on 0800 916 0647.
If you ignore your debts, the DWP can have the amount you owe dedicated directly from your earnings or pass the debt onto a debt collection agency.
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 5 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 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 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:
- Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
- 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 4 million families.
- 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.
Can you be refused an advance payment?
Not everyone is automatically entitled to an advance loan and you may be refused.
You won't be able to get one if the Department for Work and Pensions thinks you have enough money to last you until your next payment such as from final earnings or redundancy payments.
You will be refused one if you have savings, or living with parents, relatives or friends.
You'll also be denied an advance if you haven't had your identity checked.
You can ask for the decision to be reconsidered but you don't the right to appeal it.
If you're refused a loan but are in need of help, you can apply for a Budgeting advance to help you with any emergency household costs.
The smallest amount you can borrow is £100. You can get up to:
- £348 if you’re single
- £464 if you’re part of a couple
- £812 if you have children
Budgeting advances are also repaid directly from your Universal Credit payments.
You may also be able to apply for the Flexible Support Fund.
Find out more about what Universal Credit is and whether you might be eligible for a claim.
The more you earn the less you'll get, because of the taper system – here's how it works.
Now you can check your Universal Credit claim online. Here's how log in to the website and the benefits.
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