People who are claiming Universal Credit (UC) have to wait at least 5 or 6 weeks to get their first UC payment. This long delay causes major problems as other benefits they received before were paid on a weekly or fortnightly cycle.
People who cannot wait until their first payment is due can claim a Universal Credit advance. Claimants can ask for an Advance Payment as soon as they have made their claim for UC. UC advances are also available for claimants who have had a change of circumstances which means that their next payment of UC will be higher but who cannot manage until this increase is paid
Claiming a UC Advance
A UC advance can be claimed by any of the following routes:
- speaking to the Jobcentre Plus work coach
- applying through the online account
- calling the UC helpline on 0800 328 5644 (Textphone 0800 328 1344). These numbers operate Monday to Friday 8 am to 6 pm. Calls to these numbers are free. When calling one of these numbers it is best to use the phone with the number given when the UC claim was first made as this ensures that the call gets through more quickly and may also be directed to someone familiar with the case.
The Advance payment can be for up to the equivalent of a month’s Universal Credit. Claimants should work out how much they are likely to need to get through until their first UC payday including enough to cover their rent and other bills and ask for this. The maximum amount that can be paid is up to 100% of a month’s UC payment including Housing Costs. The minimum amount that can be requested is £100.
Once payment has been made if this is a small amount it would be advisable to keep track of outgoings until the first monthly UC payment is received in case a top up payment is needed. This can be requested up to 3 working days before the first UC payday. It is not advisable to ask for more then you need as Advance payments are loans which have to be repaid later. Loan repayments can cause other debt problems to get worse. DWP usually decide whether or not an Advance can be paid on the day you contact them and payments can be made quickly in cases of urgent need but are usually paid after 3 working days.
Repaying the Advance
Once the initial award of UC is paid, DWP will start to recover the Benefits Advance. Some people will have got into rent arrears or behind with other payments by the time they receive their first benefit payment and are therefore depending on getting the full amount of the UC when they are eventually paid. They are frequently shocked at the high levels of recovery of the advance.
DWP rules allow for recovery of the advances over a 12 month period which starts from the next UC pay day. Claimants are told how much the recovery will be and have to confirm that they will accept this when they take on their advance. In the case of a couple both will need to confirm that they accept the agreement.
The advance can be recovered at up to 40% of the UC standard allowance. The Regulations provide that the recovery should be at
- 15% of the standard allowance for people who have no earned income
- 25% of the standard allowance for people with earned income
- 40% of the standard allowance in cases where there is fraud or deception.
The Regulations concerning this are in Reg 11 of the Social Security (Overpayments and Recovery Regs). We have concerns that DWP may be seeking recovery at the 40% rate where there is no fraud or deception. Advisors should check that the correct rate has been applied particularly where claimants are reporting financial hardship.
Recovery of Advances causing hardship
It is expected that there could be some helpful changes in legislation around the recovery of benefit advances in the near future. Until then the rate of recovery of the advance should be checked. If, for example, it is recovered at 40% when the 15% rate is the most appropriate you should ask DWP to review the rate of recovery quoting Reg 11. This is a decision that can be taken through the Mandatory Reconsideration and appeals process if needed.
DWP also have the power to put the recovery of the advance on hold either at the beginning of the period of recovery or later during the recovery. This would usually be put on hold for a period of up to 3 months.
In addition Alok Sharma MP Minister of State for Employment has stated recently (23.6.2018 letter to Frank Field MP) that the department can consider reducing the rate of repayment of advances to lower levels if this is causing hardship.