A budgeting advance is a loan from the Department of Work and Pensions (DWP) that is paid off by your future benefits payments being reduced.
Here is everything you need to know about eligibility, how much people can get, and how to apply.
What is a budgeting advance?
A budgeting advance is a loan you can request to cover certain expenses, including:
- emergency household costs such as replacing a broken cooker
- getting a job or staying in work
- funeral costs
Citizens Advice says budgeting advances can be used for the following:
- a one-off item – eg replacing a broken fridge
- work-related expenses – eg 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
Who can get a budgeting advance?
To get a budgeting advance, you must have been receiving universal credit, income-related employment and support allowance, income support, income- related jobseeker’s allowance or state pension credit for six months or more. The only exception is if you need the money to help you start a new job or keep an existing job.
You must also have earned less than £2,600 (£3,600 jointly for couples) in the past six months, and paid off any previous budgeting advances.
How much can you get?
The smallest amount you can borrow is £100. You can get up to:
- £348 if you’re single
- £464 if you’re part of a couple
- £812 if you have children
The amount you can get depends on your capability to pay it back.
If you have any savings over £1,000, DWP will reduce the loan amount it offers to you by £1 for every £1 you have in savings over this threshold.
For example, if you are single and have £1,300 in savings, the maximum you can borrow is £48.
How are budgeting advances repaid?
Budgeting advances are paid off by your future universal credit payments being reduced, normally over the course of 12 months. You will be told how much your payments will be reduced by ahead of confirming the loan.
If you no longer get universal credit you will need to repay by other means, such as from wages or another benefit you may be getting.
How do you apply for a budgeting advance?
To apply for a budgeting advance contact your local Jobcentre Plus work coach. You need to apply for your budgeting advance over the phone, and you will normally get a decision on the same day.
For more information you can call the universal credit helpline on 0800 328 5644.