Benefit Crisis/Budgeting Advances
Universal Credit
Change in Circumstances Advance
This is most usually paid when you experience a change of circumstances which means your Universal Credit award will increase, such as having a new baby, moving in with a partner, starting to pay rent or paying childcare costs.
When changes to your circumstances occur there might be a wait until you actually receive the increased amount of Universal Credit and so you can apply for this advance if you are going to struggle financially waiting for your next payment.
You can also apply for this advance if there is a delay in a Universal Credit payment being made for your ongoing claim.
Eligibility
- You must have an existing Universal Credit claim and have received your first payment
- The DWP must determine that you are able to repay the advance within a 6-month period
- You must show that you are in financial need – the definition of this is that there is ‘serious risk of damage to the health or safety of the claimant or any member of their family’
- You must have signed a new Claimant Commitment or satisfy the DWP that you will sign it (if a new Claimant Commitment is needed as a result of the change in circumstances)
Financial Harm
This advance is meant to only be paid to those claimants who will really struggle to afford their essential living costs as a result of their change in circumstances.
This could include:
- Payments for rent arrears especially if there is a suspended possession order in place
- Being unable to afford to top up gas/electricity prepayment meters and risk being cut off
- Having very little food in the house and being unable to afford to go shopping
- Being unable to afford public transport to get to school or work
When to Apply
For example, your Monthly Assessment Period runs from the 26th of the month to the 25th of the next month. Your baby is born on the 1st of the September 2023. You should therefore apply before the 3rd working day before the 25th of the month which would be Wednesday 20th September 2023.
How to Apply
Online
If you are part of a couple, you will be asked if your partner agrees to the advance. This is because Universal Credit with couples is a joint benefit claim, and you are both responsible for repaying any advances or overpayments.
Phone
You can also apply over the phone by calling the Universal Credit helpline on 0800 328 5644. You will need to explain why you need the advance and provide the account details that your Universal Credit claim is paid into as well as providing proof of identity in order to prevent fraudulent advance applications being made.
How much?
For example, Mina now has to pay rent of £450 per month. She will be eligible for up to £225 as a change of circumstances advance.
James and Donna have had their first child. This will result in an increase in the UC award of £269.58. They will be eligible for up to £134.79 as a change of circumstances advance.
If you ask for less than the maximum amount, then you should get the amount requested. Also, if the DWP identify that you cannot repay the advance back within 6 months you may receive less than the maximum amount.
To work this out, the DWP will look at how much the monthly deduction would be and check that it is less than 25% of the standard allowance for the claim. 25% of the standard allowance is the maximum amount the DWP can deduct to repay the advance.
If we look at the above examples again, Mina as a single person under the age of 25 has a standard allowance of £292.11. 25% of this is £73.03. £225 spread over 6 months is £37.50 and so she could get the maximum allowance if she doesn’t have any other deductions that take priority over the advance.
James and Donna, as a couple over the age of 25 have a standard allowance of £578.82. £134.79 spread over 6 months is £22.47 and so they could get the maximum allowance if they don’t have any other deductions that take priority over the advance.
Maximum Amounts
here is a maximum amount that can be awarded based on your circumstances. For 2023/24 these are shown in the table below which also shows the full standard allowances and the 25% amount.
|
|
Standard Allowance |
2023/24 |
|
|
25% |
Capped Advance |
||
|
Single under 25 |
£292.11 |
£73.03 |
£438.18 |
|
Single 25+ |
£368.74 |
£92.19 |
£553.14 |
|
Couple both under 25 |
£458.51 |
£114.63 |
£687.78 |
|
Couple both 25+ |
£578.82 |
£144.71 |
£868.26 |
Advance Request Refused
Unfortunately, there is no right to appeal a decision by the DWP not to award you an advance payment. You can, however, ask the DWP to review their decision. You can make a request using your journal or phoning the helpline.
You can also seek advice from a Baby Steps adviser here…
Budgeting Advance/Loan
If you are in receipt of Universal Credit or:
-Income Related Employment and Support Allowance
-Income Based Jobseeker’s Allowance
-Income Support
-Pension Credit
And you are experiencing financial difficulty due to an unexpected expense you may be eligible for a Budgeting Advance/Loan. It is called a Budgeting Advance if you are claiming Universal Credit and a Budgeting Loan if you are claiming any of the other benefits.
These used to be called Crisis Loans.
How Much?
The lowest amount you can ask for is £100. The maximum amount you can get depends on your circumstances:
- £348 if you’re single
- £464 if you have a partner
- £812 if you or your partner claim Child Benefit
You may not get the maximum amount and the DWP will look at whether you can afford to repay the amount borrowed and if you have savings over £1,000 or £2,000 if you or your partner are over 63, and whether you are already paying back any Budgeting or Crisis Loans.
If you already owe more than £1,500 in Budgeting and/or Crisis loans you cannot receive any more.
How Long?
Budgeting Loans are usually repaid over 2 years and are deducted straight from your benefit.
Budgeting Advances for Universal Credit are usually paid back over 12 months. Occasionally, they can be repaid over 18 months. Again, the repayments are deducted straight from your benefit.
Universal Credit Budgeting Advances Eligibility
The criteria for a Budgeting Advance for those claiming Universal Credit are more detailed than the Budgeting Loans for those on legacy benefits. That is because nearly everyone on a legacy benefit will not be working, or if they are, will have a very low income whereas Universal Credit claimants can have totally different income scenarios.
- You, or your partner, need to have been claiming Universal Credit for 6 months continuously however, if you have moved from a legacy benefit over to Universal Credit then the time claiming the legacy benefit will count. For example, if you claimed Income Support for 3 months and then moved onto Universal Credit, you could apply for a Budgeting Advance after being on Universal Credit for 3 months.
- You, or your partner, need to have had either no earnings in the 6 months prior to the Budgeting Advance claim or have total earnings below £2,600 for a single person or £3,600 for couples in the 6 months prior to a Budgeting Advance claim.
- If you are self-employed your income in the 6-month period will be based on your actual income not an assumed income.
- You need to have repaid any previous Budgeting Advances
- The DWP need to be satisfied that you can afford to repay the advance over 12 months
If the Budgeting Advance is to help a claimant starting work or who has recently started work the 6-month time frame for having been in receipt of Universal Credit does not apply. However, in this situation you may be eligible for assistance from the Flexible Support Fund which does not need to be repaid. You can find more information about the Flexible Support Fund by speaking to your Work Coach or Job Centre Plus.
How to Apply
Online
The quickest way to apply is online through your online journal. On the homepage there will be an option to ‘Apply for an Advance’. Click on this and then the maximum amount that can be borrowed will be shown. You do not have to borrow the maximum amount. Remember, this advance will need to be repaid, usually over 12 months so think about how much you really need to borrow, and how you will manage for the next 12 months with the deduction from your award.
If you are part of a couple, you will be asked if your partner agrees to the advance. This is because Universal Credit with couples is a joint benefit claim, and you are both responsible for repaying any advances or overpayments.
Phone
You can also apply over the phone by calling the Universal Credit helpline on 0800 328 5644. You will need to explain why you need the advance and provide the account details that your Universal Credit claim is paid into as well as providing proof of identity in order to prevent fraudulent advance applications being made.
Legacy Benefits
If you are claiming a legacy benefit you can apply:
Online here. This is the quickest option.
You can also apply complete a paper application and send it in the post. You can get the form here or you can ask for a form to be sent to you by phoning the Social Fund Enquiry Line on:
Telephone: 0800 169 0140
Textphone: 0800 169 286
The address to return the form is:
Freepost
DWP Budgeting Loans 1
