You can claim a budgeting advance to pay for one off expenses (Advances-Budgeting Advance, Universal Credit Full Service Guidance, House of Commons Library, 30 April 2018)
For example:
- items need to get in to or remain in work, such as, clothes, tools, travel, childcare
- essential household items, like furniture, cot, pram, appliances, clothing and footwear
- rent in advance or removal expenses to secure new accommodation
- improvement, maintenance, and security of your home
The advances are not intended to help pay for unexpectedly high household bills.
Award of a budgeting advance is discretionary and there is no right of appeal but if you are unhappy with a decision, you can ask for the DWP to look at it again.
You can apply for a budgeting advance at any point in an assessment period.
Eligibility
Usually you need to be on a means tested benefit continuously for at least six months before you can get a budgeting advance.
Qualifying benefits are:
- Income support
- Jobseekers allowance, income-based
- Employment and support allowance, income related
- Pension credit
- Housing benefit
- Universal Credit
Advances for work expenses
If the advance is to help you start or stay in work, you don’t need to have been on benefit for six months. For example, you could have the advance to pay for upfront childcare costs, travel, clothing, or tools. To get an advance for upfront childcare costs, you will need a confirmed job offer.
The Flexible Support Fund also exists for Jobcentre staff to help you with expenses to start or stay in work and in the future the Government intends to extend access for upfront childcare costs from this fund.
Amount
Your request must be for at least £100 and up to a maximum of:
- £348 for a single adult
- £464 for a couple
- £812 for a single person or a couple with children
It is possible to borrow amounts less than £100 needed for you to start or stay in work but DWP staff are told to consider the Flexible Support Fund to cover these costs.
The maximum you can borrow is calculated following these steps:
- calculate the maximum deduction rate - 25% of the appropriate standard allowance for your household.
- take off any existing deductions from benefit – if you have other deductions already being made and they are higher up the priority order and are for the whole maximum deduction rate then you cannot have a budgeting advance.
- multiply the remaining amount by 12 as the advance will be recovered over 12 months
- cap this figure at the maximum overall advance amount for your circumstances - £348, £464 or £812 (see above).
- reduce the remaining amount by any savings you have above £1,000. For example, if you have £1,300 in savings the amount you can borrow as a budgeting advance is reduced by £300.
The figure from step 5 will be the maximum you can borrow but you will not automatically get the maximum. Only an appropriate amount for what you need will be advanced but limited to the figure from step 5.
Restrictions
Only one budgeting advance can be paid at a time. You cannot take a budgeting advance if you (or your partner) are still repaying a previous budgeting advance. If you start a relationship and your partner is already repaying a budgeting advance, then neither of you can take out another one until that one is cleared.
There are also restrictions based on your previous earnings. You cannot have a budgeting advance if you earned more than £2,600 in the previous six assessment periods if you are a single claimant with or without children. If you are claiming as a couple, with or without children, your allowable earnings are £3,600.
Earnings include:
- Statutory sick pay
- Statutory maternity pay
- Maternity allowance
Written notice
You must be given a written notice, that can be electronic, that contains your agreement to the amount of the advance and the deductions and timescale for repayment. This will also include agreement to repay it by other means, like an attachment of earnings, if you come off Universal Credit.
Recovery and 6 month deferral
Recovery will usually be over 12 months.
If you have a change of circumstances that means recovery over 12 months will push you in to genuine hardship, it is possible to defer payment for up to 6 months so repayment would be completed within 18 months. Guidance says this will only be possible in exceptional circumstances.