BANK BOOST
Little-known way Universal Credit households can get a one-off payment of up to £812 to help pay the bills
See all the ways you could get extra help if you're struggling financially
UNEXPECTED expenses can cause many sleepless nights - but there is help at hand for those claiming Universal Credit and other benefits.
Households receiving the benefit can apply for a Budgeting Advance to boost their bank balances by up to £812 if a one-off expense has landed them in financial trouble.
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A Budgeting Advance is a loan, so repayments will be deducted from your future Universal Credit or benefit payments until it is repaid in full - but you won’t be charged interest on the amount you borrow.
This means it can be a much better option than taking out a bank loan or using a credit card to cover expenses.
Who is eligible for a Budgeting Advance?
You can apply for a Budgeting Advance to cover emergency household costs or to support you in securing or remaining in work.
The types of expenses a Budgeting Advance can be used to cover include:
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- Replacing a broken appliance, such as a cooker or fridge
- Funeral costs
- Repairs to your home
- Maternity expenses
- Moving costs
- Essential items
- Work related expenses such as travel or buying a uniform or tools
To be eligible for a Budgeting Advance, you need to have been in receipt of Universal Credit, Employment and Support Allowance, Income Support, Jobseeker’s Allowance or Pension Credit for six months or more.
You also must not have earned more than £2,600 (or £3,600 combined for couples) in the past six months.
You cannot take out a new Budgeting Advance if you’ve yet to pay off a previous Budgeting Advance loan.
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You will also have to answer questions to confirm that you’ll be able to afford the repayments, which will be taken at source from future Universal Credit or other benefit payments.
How much can you borrow?
How much you can borrow through a Budgeting Advance is dependent on how much you need.
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The smallest amount you can borrow is £100.
You can borrow up to £348 if you’re single, £464 if you’re part of a couple and up to £812 if you have children.
If you have more than £1,000 in capital, including savings and some types of property, the amount you can borrow will be reduced by the amount you have over £1,000.
For example if you have £1,250 in capital, the amount you could borrow would be reduced by £250.
How will you repay the loan?
A Budgeting Advance is a loan and you’ll need to repay it, although you will not be charged interest.
You’ll repay the sum through your future Universal Credit or benefit payments, and you will be told how much your monthly repayments will be reduced by when your application is accepted.
Those who applied on or after 12 April 2021 will be expected to repay the loan within 24 months.
If you stop receiving Universal Credit you’ll have to repay the money in another way, be it through wages from employment or an alternative form of benefit.
How to apply for a Budgeting Advance?
You can apply for a Budgeting Advance through the journal of your Universal Credit account, with your nearest Jobcentre or via the Universal Credit helpline on 0800 328 5644.
Your adviser will need to ensure you can afford to pay the loan back, and is likely to ask about existing debts and how much you have in capital.
You will normally receive a decision on the day you apply.
Citizens Advice advises that while you can’t appeal the decision made, you can ask for it to be looked at again.
If you do this it will help if you can show new evidence to demonstrate that your circumstances have changed.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity works out what you could get.
Entitledto's determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data.
You can use to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
What if I’m not eligible?
If you’ve applied for Universal Credit or another eligible benefit but are yet to receive your first payment, you won’t quality for a Budgeting Advance - but you could apply for an Advance Payment.
You may be able to borrow up to 100% of your first Universal Credit payment.
If you are within your first Universal Credit assessment period and you have had an interview at a Jobcentre you can apply online through your Universal Credit account and will be shown the amount you can borrow on screen.
If you have passed your first assessment period you will need to apply by calling the Universal Credit helpline on 0800 328 5644 or speaking to your work coach.
Whichever way you apply, you will usually find out if you’ve been successful the same day.
As with a Budgeting Advance, the Advance Payment is a loan and you will need to pay it back through future benefit payments.
New claimants are normally able to repay the advance over a period of up to two years.
However, if you’re applying due to a change of circumstances, your repayment term is likely to be six months.
In exceptional circumstances repayments can be delayed for up to three months for new claimants and one month for those applying due to a change of circumstances.
If you stop receiving Universal Credit you will need to continue to repay the loan through alternative benefits or your wages.
If you fail to keep up with your repayments the Department of Work and Pensions could take them at source from your employer or ask an independent debt collection agency to collect this money on its behalf.
Alternative forms of support
If you’re struggling financially, check what benefits your entitled to .
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If you need help to manage your budget or bills, you can from .
You can also including support with your utility bills, housing costs or NHS prescriptions through cost of living support.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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