What is a Universal Credit?
Universal credit is an allowance given to people who have low income or are not able. It is a payment given for the cost of living. It is mostly paid monthly or twice a month to help those in need.
What Is Universal Credit Budgeting Advance?
Universal Credit Budget Advance is an interest-free loan provided to the claimants of Universal Credit. It is offered to pay off unexpected expenses.
Working of Budgeting Advance Loan
If a person is already receiving payments from Universal Credit or any other benefits and they need to pay an impending expense, they can borrow money as a loan.
The amount borrowed will be paid off in the upcoming 12 months from Universal Credit. This means the amount received monthly as Universal Credit will be deducted. The deducted amount will act as payment to the loan.
How Much Amount Can a Person Borrow?
The minimum amount offered by the universal credit advance is £100. The maximum amount available depends on several factors mentioned below:
- £ 348 – for singles without any children dependent on them.
- £ 464 – for couples without any dependent children
- £ 812 – for both singles and couples with dependent children
The amount of savings also affect the loan. If a person has more than £ 1000, the amount available will be deducted from the minimum amount of £100, depending upon your circumstances.
For example – if your savings are £1200 and you are single without any children, then the amount available for the loan would get £248 (£348 – £100).
Eligibility to Apply for a Budgeting Advance Universal Credit in the Uk?
The person should be a Universal credit claimant, but if in case they haven’t, they can still avail of the loan. If the person has claimed these in the last 6 months, he is eligible for a loan:
- Universal credit
- Allowance for Job seeking (income-based)
- Employment and support allowance
- Income aids
- Pension acclaims
Eligibility also depends on the income earned in the past 6 months; if you’ve earned £2600 as a single or £3600 if you are a part of a couple, then you can claim a loan.
However, the loan can be denied if it seems that the repayment is unlikely.
If you have already taken a universal advance credit before, its payments should be completed before applying for another one.
How to Apply for a Budgeting Advance Universal Credit?
Follow the steps to apply for a Universal Credit Advance:
- Before receiving the first payment.
- If you are availing of Universal Credit already and have told the authority about the change in your situation, that means you will be paid more Universal Credit but have not yet been paid the increment.
How to Contact for Applying a Budgeting a Universal Advance Credit?
You can contact through:
- Universal Credit helpline for further details and process.
- Online account
- Work coach
How to Apply via Work Coach and Universal Credit Helpline?
Contact them and let them know the reason why you want an advance.
Provide all the necessary details, such as bank account info.
Get the identification checkup by them.
When Will You Hear the Confirmation?
Mostly, the outcome is told at the end of the day.
How to Repay the Advanced Universe Credit?
If you already have Universal Credit, then the amount will be paid from the future universal credit payment. If you don’t have universal credit now, then the amount will be paid via other means such as wages or other benefits received.
How to Use a Universal Credit Budgeting Advance?
The person applying for the budgeting advance universe will get questioned about why he wants the amount and the expenses he wants to spend the money on.
The following reasons can be accepted:
- basic household essentials such as cookers, fridges, or beds.
- Uncertain bills or a fine
- Advance of rent
- Removal costs if moving home
- One-time expenses are required for your employment purposes, such as dress or tool.
- Home repairs or essential improvements
How Is the Advance Repaid?
As mentioned earlier, the deductions are made from the Universal credit that the person receives personally. The first subtraction happens when you receive the first payment and so on. The advance should be paid within:
- You will have to repay the Budgeting Advance of Universe Credit within 12 months.
- In case you transfer to any other subsidy from Universal Credit, the deduction process will continue until the advance is paid off.
- If you leave the benefits, you will receive a letter confirming how much your amount is left from the advance to pay. This particular letter asks you to contact DWP or Debt Management Contact Center, to organize your repayments. You mustn’t ignore this letter.
If you don’t make payment arrangements, the DWP has the power to make you pay indirectly either by:
- Contacting your current employer to dispose of deductions to be made from your earnings
- Contacting an independent debt collection agency to accumulate this money on their behalf; the payment arrangement has to be done by you directly.
You can request for adjourning the repayments if you cannot afford them currently.
Repayments can be delayed for:
- 3 Months:- New Claim
- 1 month:- Change of situation.
These are exceptional instances.
When Can a Person Be Refused an Advance?
The person might get refused to avail an advance if:
- You Didn’t get your identity check at the Jobcentre.
- If you have enough funds to pay your payment of Universal Credit.
- You live with family or friends, irrespective of being single or part of a couple.
- You have any earning or source of income that can help you.
- If you have any manageable savings which might prove enough for you.
You can ask for revaluation; however, you don’t have the right to the demand.
A Universal Credit Budgeting advance is a very beneficial option that could get the claimants of Universal Credit out of uncertain or tacky financial problems. Even though the loan is interest-free, the claimant can be deprived of the benefits from the beneficial schemes or Universal Credits for 12 months. It is advised to budget such advance if you can get through the deductions from the Universal Credit.