The Department for Work and Pensions (DWP) offers Universal Credit claimants assistance in the form of a loan, known as a Budgeting Advance or Budgeting Loan, with a maximum amount of £812 for emergency costs like home repairs, job-related expenses, moving costs, or funeral expenses. Repayment of the loan is required through future Universal Credit payments within two years, without any interest charges. The loan amounts range from £100 to £812, depending on the claimant’s circumstances.
Individuals with savings exceeding £1,000 (or £2,000 for individuals aged 63 or older) will have their loan amount reduced by the excess savings. For instance, if savings are £1,100, the loan amount will be reduced by £100. To qualify for a Budgeting Advance, claimants must have been on Universal Credit for at least six months, or under six months if the loan is necessary for employment purposes. The income criteria for eligibility are earnings of less than £2,600 in the past six months (or £3,600 for couples) for a Budgeting Advance and six months or more of receiving specific benefits for a Budgeting Loan.
Claimants cannot receive a second loan if the first one is not repaid. Citizens Advice outlines scenarios that might qualify for a Budgeting Advance. Applications for the loan can be made through the Universal Credit online journal, local jobcentre, or by contacting the Universal Credit helpline. Even if Universal Credit claims cease, the loan must be repaid, with the DWP having the authority to recover outstanding amounts through an employer or debt collection agency.
Universal Credit comprises a standard allowance, which is the basic payment before adjustments for dependents, health conditions, or deductions are made.
