Universal Credit payments are designed to offer support to people who are either on a low income, or out of work. With many more flocking to Universal Credit due to the COVID-19 crisis, it has undoubtedly become an important lifeline. However, with current plans meaning the £20 a week increase to Universal Credit is set to be removed, claimants are likely to feel the financial impact of such a move.
Fortunately, though, for individuals who are having a particularly challenging time when it comes to money, there are options available.
One such choice is a budgeting advance, outlined by the Department for Work and Pensions (DWP), responsible for overseeing payments.
This type of advance can provide a helping hand if a person finds they have a particularly low income.
It can also help with unexpected costs which can pop up, as these often leave Britons blindsided and unsure what to do next.
A budgeting advance can help with a variety of issues a person may face in their day-to-day life.
This can include emergency household costs, funeral costs, or even assist in the process of a person getting a job or staying in work.
The amounts people can expect to receive, however, will vary according to their personal circumstances.
The smallest amount a person will be able to receive is £100, but this can increase if necessary.
Single people will be entitled to £348, while those who are part of a couple could get £464.
For those with children, the budgeting advance rises up to £812, which could provide valuable and important support in a time of difficulty.
What is important to note about a budgeting advance, though, is that the payment is in fact a loan.
These advances have to be paid back to the government in full, and this could have an impact on the Universal Credit a person receives for a while.
This includes whether a person has any savings, as over £1,000, the advance will be impacted.
The government website explains: “We will reduce the loan amount we offer to you by £1 for every £1 you have in savings over the £1,000 threshold.”
A budgeting advance must be paid back by individuals within a 12 month period, even if they move off Universal Credit.
Finally, there are certain eligibility criteria to bear in mind when it comes to a budgeting advance.
A person must currently be receiving Universal Credit, but also must have earned less than £2,600, or £3,600 jointly for couples, within the past six months.
In addition, any previous budgeting advances must have been paid off before a new one can be received.
Published at Thu, 21 Jan 2021 08:00:00 +0000