MILLIONS on Universal Credit can get up to £812 in advance payments to tide them over this Christmas period – but there's a catch.
Those on the benefit can get what is known as a Budgeting Advance to help pay for emergency household costs.
You might need the money for a new cooker, help getting a job or staying in work or bills.
But the money is a loan which has to be paid back and you should only ask for it if you're really struggling.
Your Universal Credit payments will be reduced in the months after you've taken out the advance and you'll have to budget for the deficit.
What is a Budgeting Advance?
You can borrow between £100 to £812. What you're entitled to will depend on your circumstances.
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The most you can get if you're single is £348, £464 if you're in a couple and £812 if you have children.
Your financial circumstances are also taken into consideration.
If you have savings over £1,000 the advance you are offered is reduced by £1 for every £1 you have over that £1,000.
The amount you borrow will usually be paid back over 12 months.
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If you stop receiving Universal Credit you'll have to agree a different way to pay the money back.
The loan is interest free, so you'll pay back the exact amount you borrowed.
This is a better option than borrowing the money through a bank loan or credit card, as you'll usually have to pay interest on those repayments.
If you do opt for a credit card, you should check interest rates to make sure you're getting the best deal by using comparison websites like Uswitch or MoneySuperMarket.
You can apply for a budgeting advance to cover things like:
- A one-off item – for example, replacing a broken fridge
- Work-related expenses – for example, buying uniform or tools
- Unexpected expenses
- Repairs to your home
- Travel expenses
- Maternity expenses
- Funeral expenses
- Moving costs or rent deposit
- Essential items, like clothes
What other emergency help can I get?
Of course, it's worth checking if you can get other help for emergency costs without having to repay it.
It could be worth checking you're getting all the benefits you're entitled to in the first place by using a benefits calculator.
There's also the Household Support Fund, which offers financial support to those most in need.
What you'll get will depend on your council area, but some households have been handed hundreds in cash, vouchers and other support.
Councils also have other welfare support they can dish out. It's worth contacting yours to find out what's on offer.
Plus, you might be entitled to a charity grant or help through a food bank.
If you're concerned about debt you can always get free and friendly advice from a number of organisations:
- National Debtline – 0808 808 4000
- StepChange – 0800 138 1111
- Citizens Advice – 0808 800 9060
Who is eligible for a Budgeting Advance?
To get a Budgeting Advance you have to be on Universal Credit plus a number of other benefits, including:
- means-tested Jobseeker's Allowance
- means-tested Employment and Support Allowance
- Income Support
- Pension Credit
You'll need to have been claiming benefits for at least six months as well, unless it's to cover costs associated with getting work or staying in work, like travel.
You'll also need to have earned less than £2,600 in the previous six months before your application, or £3,600 if you live with a partner.
If you've taken out a Budgeting Advance before and are still paying it off you won't be able to get a fresh one.
How do I apply for a Budgeting Advance?
You'll need to call up to apply.
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The Universal Credit helpline is 0800 328 5644 and it's free to call from landlines and mobiles.
Alternatively, you can contact your local Job Centre Plus or apply online on your Universal Credit account.
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