Universal Credit applicants struggling through January can apply for aid worth £ 812.
The support program – known as the budget advance – can be used to cover emergency household expenses.
After the hectic and expensive holiday season, this program will be a welcome boost for many during the harsh January period.
You may also be eligible for payment if you need financial assistance to find a job or stay at work, or for funeral expenses.
But there is a catch. As it is technically a loan, you will have to repay it via your future Universal Credit payments.
However, you won’t be required to pay interest, unlike expensive payday loans and other forms of borrowing.
The Mirror helped explain how a budget advance works, who is eligible, and how you can apply.
How much can I borrow with a budget advance?
The smallest amount you can get is £ 100 – the largest being £ 812 if you have children.
The maximum amount varies depending on your personal situation, you can get up to:
The amount you can get depends on your ability to repay the loan and your savings of over £ 1000.
The amount you can borrow is reduced by £ 1 for every £ 1 you save above the £ 1,000 threshold.
Am I eligible for a budget advance?
You must meet certain criteria to receive a budget advance – which means that not everyone on Universal Credit will be accepted for one.
To be eligible for financial assistance, you must have been receiving one of the following benefits for at least six months:
- Universal Credit
- Employment allowance and income support
- Income support
- Income-related jobseeker’s allowance
- State pension credit
These criteria will not apply if you need the money to help you start a new job or keep an existing job.
You must also have earned less than £ 2,600 (£ 3,600 jointly for couples) in the past six months and have repaid all previous budget advances before you can be accepted for payment.
How do I repay my budget advance?
You’ll need to repay your budget advance through your future Universal Credit payments – but as mentioned above, you won’t be charged interest on the payment.
The first deduction is made on the day you get your next payment after being accepted for the loan and the full amount must be paid back within 12 months.
If you stop claiming universal credit, you will still have to repay your budget advance.
Payments will either have to come from your salary, if you are currently working, or from other benefits you may receive.
If you do not make payment arrangements, the DWP may contact your employer to collect what you owe.
The DWP can also contact a debt collection agency to collect any overdue payments – keep this in mind before applying for a loan.
How to request a budget advance?
If you are having difficulty and need a budget advance, you will need to apply through your Jobcentre Plus work coach.
They should explain how much you can borrow and how much you will need to pay back each month.
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