Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the effect of advance repayments of universal credit on the (a) household income and (b) levels of debt among claimants.

Advances are not loans; they are an interest free payment benefit advance, available to help people who need immediate financial support, which is then recovered over an agreed period. The Department has taken a number of steps to ensure that advances meet the needs of claimants and that the recovery arrangements are personalised and reasonable. In January 2018 we increased the amount available for advances from 50 per cent to 100 per cent of the total award.

From October 2021 we are increasing the recovery period for advances from 12 to 16 months, further supporting those in financial need. Furthermore, if a claimant feels that they are experiencing financial hardship because of the amount that is being deducted from their Universal Credit award, they can ask the Department to consider reducing their deductions. From October 2019, the overall maximum level of deductions that can be taken from a Universal Credit award will be reduced from 40% to 30% of the claimant’s Standard Allowance. The Money and Pension Service also provides debt advice and money guidance to claimants if they need support managing their money.