Universal Credit claimants could get an advance on their first payment but there’s a catch

Universal Credit: Expert discusses benefits of claiming

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If someone needs help to pay their bills or cover other costs while they wait for their first Universal Credit payment, they can apply to get an advance. As the cost of living continues to soar, and energy bills are on the rise, the advancement could prove to be a lifeline for those who are struggling financially.

The most people can get as an advance is the amount of their first estimated payment.

Universal Credit has increased by 3.1 percent this month in line with other state benefits.

It is among a number of benefits including child benefit and state pension that will see payments increase in April to keep up with the rising cost of living.

Benefits will usually go up each year to keep up with inflation and in April claimants will see a 3.1 percent rise in payments.

How to apply

People can apply for an advance payment through the Government website.

Britons can go through their online account or through their Jobcentre Plus work coach.

They will need to:

  • Explain why they need an advance
  • Verify their identity (they’ll do this when they apply online or on the phone with a work coach)
  • Provide bank account details for the advance (talk to the work coach if someone cannot open an account).

People will usually find out the same day if they can get an advance.

However, Britons are reminded that the advance does have to be repaid.

The amount one receives in their advance will need to be paid back out of their future Universal Credit payments.

This means their payments will be smaller than expected until the advance is completely paid off.

Britons start paying it back out of their first payment.

People can choose how many months they pay the advance back over, within the time limit.

Usually people can pay back the advance within:

  • 24 months if they apply on or after April, 12, 2021
  • 12 months if they applied before April 12, 2021

People do not pay interest on it – the total amount they pay back is the same.

The Government gave an example.

It said: “Your first estimated payment is £344 and you get £344 as an advance.

“You choose to pay back your advance over 24 months, which is £14.33 per month. You’ll get £329.67 on your first payment date – this is your first payment minus the bit you’re repaying (£344 minus £14.33).”

Britons can read more about the Universal Credit advancements on the Government website.

If someone stops receiving Universal Credit before the advance is paid back, other arrangements will need to be made.

For example, it will then be taken from their wages or other benefits they receive.

This type of advance is specifically for claimants waiting for their first Universal Credit payments or people who have had a change in circumstances which would see their benefits increase but are still waiting for this new payment.

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