Universal Credit

(asked on 22nd May 2019) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps she has taken to ensure that universal credit claimants (a) are fully aware of how the repayment of advance payments work and (b) understand that the deferment of repayments is for a maximum of three months.


Answered by
Alok Sharma Portrait
Alok Sharma
COP26 President (Cabinet Office)
This question was answered on 10th June 2019

Applications for a Universal Credit advance payment can be made in person, by telephone or online depending on the claimant’s circumstances. Depending on the type of advance payment application, we will consider whether the claimant satisfies the eligibility conditions for receiving the advance. If the claimant is eligible we will agree the amount of the advance and the period over which the advance will be recovered from their future Universal Credit payments. If the claimant has made the application in person or by telephone, the outcome of the application is explained to the claimant face to face or over the phone and then their online journal is updated. If they have made the application online the outcome will be displayed on screen.

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. Affordability is managed by ensuring the recovery rate will not be more than the equivalent of 40% of the claimant’s standard allowance. The claimant is given the choice over the repayment period and it is explained to them exactly how much will be deducted each month depending on the option they choose. If the claimant is making the advance application online, these options are clearly displayed on screen for them to choose from.

Help is available for those struggling to meet the recovery rate. In exceptional circumstances, recovery can be deferred for up to three months from the start of the recovery period. If the claimant tells us that due to unforeseen circumstances they are experiencing hardship and are having difficulty repaying the advance over the agreed recovery time, we would explain that repayment can be deferred by a maximum of three months.

From October 2019 the maximum rate of deductions from a claimant’s standard allowance will be reduced from 40% to 30%. From October 2021 we are increasing the recovery period for advances from 12 to 16 months, further supporting those in financial need.

Information about advances is available on the Gov.uk site at:

https://www.gov.uk/guidance/universal-credit-advances

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