DWP set to make big change to Universal Credit advance in April

The Department for Work and pensions are making changes to their advance payment rules from next month.

New Universal Credit claimants can usually get an advance payment to help them as they wait five weeks for their first payment.

But the advance does need to be repaid and the repayments usually start from the first official payment you receive.

People don't have to pay interest on the advance, meaning the total amount paid back is the same.

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Claimants are allowed to choose how many months they pay the advance back over, but under current rules it must be repaid within 12 months – reports the Daily Express.

However from next month the rules are changing, as has been confirmed in the Spring 2021 Budget.

In April 2021, there will be an extension to the period over which the Universal Credit advances have to be repaid.

Claimants will have 24 months to pay back their advance, up from the current 12 months.

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And the maximum rate at which deductions can be made from a Universal Credit award will reduce from 30% to 25% of the standard allowance.

These measures will begin from April 2021, having previously been due to be implemented from October 2021.

The extended repayment period will only apply to new advance payments taken out from April.

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For those who decide an advance payment is the right thing for them, it is possible to apply online.

The advance payment can be applied for via the claimant's online account, or through their Jobcentre Plus work coach.

GOV.UK explains: "You’ll need to:

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

Who is eligible for Universal Credit?

It may be a person is able to claim Universal Credit if:

  • They're on a low income or out of work
  • They're 18 or over (although there are some exceptions if the person is 16 to 17)
  • They're under state pension age, or their partner is
  • The person and their partner have £16,000 or less in savings between them
  • They live in the UK.