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We all know how expensive Christmas can be, and the pinch can be felt especially for the more modest among us.
But luckily there is help at hand – as Universal Credit applicants struggling after the festive period can apply for help worth up to £812.
The support is known as a budget advance and can be used to cover emergency household expenses.
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You may also be eligible to receive payment if you need financial assistance to find or stay at work, or for funeral expenses, reports The Mirror.
But since a budget advance is technically a to lendyou will need to repay it through your future Universal Credit payments.
However, you pay no interest, unlike expensive payday loans and other forms of borrowing that can be difficult to master.
Below we explain how a budget advance works, who is eligible and how to apply.
The smallest amount you can borrow is £100 and the maximum is £812 if you have children.
You can go up to:
How much you can get depends on whether you can repay the loan and whether you have savings of over £1,000.
The amount you can borrow is reduced by £1 for every £1 you have in savings over the £1,000 threshold.
Who is eligible for a Budget Advance?
You have to meet certain criteria to get a budget advance – so not everyone on Universal Credit will be accepted for one.
To be eligible for financial assistance, you must have received one of the following benefits for six months or more:
- Universal Credit
- Employment and Income Support Benefit
- Income support
- Income-related jobseeker’s allowance
- State pension credit
The only time this won’t apply is if you need the money to help you start a new job or maintain an existing one.
You must also have earned less than £2,600 (£3,600 jointly for couples) in the last six months and have repaid all previous budget advances.
How to repay a Budget Advance?
You’ll have to repay your Budget Advance through your future Universal Credit repayments – but as we mentioned above, you won’t pay any additional interest.
The first deduction is made on the day you receive your next payment after being accepted for the loan and the full amount must be repaid within 12 months.
If you stop claiming Universal Credit, you will still have to repay your budget advance.
Payments will either have to come from your salary, if you are currently working, or from other benefits you may have.
If you don’t make payment arrangements, the DWP can contact your employer to collect what you owe.
The DWP may also contact a debt collection agency to collect any outstanding payments – so keep this in mind before applying for a loan.
How can I request a budget advance?
If you are having difficulty and need a budget advance, you will need to apply through your Jobcentre Plus work coach.
They should explain how much you can borrow and how much you will have to repay each month.
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