How Many Times Can You Get an Advance on Universal Credit? | Limitations Explained

Universal Credit, introduced by the UK government, combines multiple benefits into one monthly payment to simplify financial assistance for individuals and families. Despite its efficiency, the waiting time for initial payments can sometimes lead to financial distress.

To address this, the Department for Work and Pensions (DWP) offers advance payments to help claimants manage essential expenses during these periods.

This blog explores the rules, processes, and limitations of Universal Credit advances, including Budgeting Advances, providing you with all the information you need to navigate this crucial support system effectively.

What Is a Universal Credit Advance?

A Universal Credit advance is a form of financial aid available to claimants who face delays in receiving their first payment or encounter an urgent financial need during their claim period.

This advance can cover basic living costs, including rent, utility bills, and food, ensuring claimants can maintain stability during the waiting period.

The Universal Credit system is designed to assist those in need while promoting financial independence. However, as these advances are essentially loans, they must be repaid through deductions from future payments. This makes it crucial to assess your financial situation before applying.

Example Scenario:

Sarah, a single mother, applied for Universal Credit after losing her job. With a three-week delay in her first payment, she struggled to cover her rent and utility bills.

By applying for an advance, Sarah received funds to bridge this gap, repaying the amount over the next several months through small deductions from her Universal Credit payments.

How Many Times Can You Get an Advance on Universal Credit?

There is no fixed limit on how many times you can apply for an advance payment. However, each request undergoes a thorough assessment by the DWP.

Factors such as your repayment history, existing financial obligations, and ability to manage further deductions play a significant role in approval decisions.

Key Considerations:

• Repayment History: If you have an outstanding advance, it may reduce your chances of getting another one.
• Financial Need: You must demonstrate a valid reason for requesting an additional advance, such as a sudden financial emergency.
• Affordability Assessment: The DWP evaluates whether you can comfortably repay the new advance alongside existing deductions.

While the system is flexible, it’s important to use advances judiciously to avoid excessive repayment burdens.

How Much You Can Get from a Universal Credit Advance?

If you’re facing financial hardship and apply for a Universal Credit advance, the amount you can receive depends on your estimated Universal Credit entitlement. Here’s a breakdown of what to expect and how repayments work.

Maximum Amount You Can Receive

You may be eligible to receive up to 100% of your estimated Universal Credit payment as an advance. This amount is calculated based on the Universal Credit payment you’re expected to receive during your first assessment period or after a change in circumstances.

For example:

• If your estimated monthly Universal Credit payment is £800, you can request an advance of up to £800.
• The exact amount offered will be displayed during the application process, allowing you to decide how much you wish to borrow.

Key Tip: You don’t have to request the full 100%, you can choose a smaller amount to make future repayments more manageable.

What is the Repayment of Your Advance?

Advance payments are loans, and you must repay them through deductions from your future Universal Credit payments.

Repayment Terms:

Deductions start from your first Universal Credit payment. The repayment period is typically 12 months, but you may request an extension of up to 24 months if needed.

If you stop receiving Universal Credit, repayments will be taken from:

• • Your wages, if you’re employed.
  • Any other benefits you’re receiving.

Example:

If you receive an advance of £600 and your monthly Universal Credit payment is £800, the DWP may deduct £50 per month for 12 months to repay the advance.

Important Consideration: Before accepting an advance, review the repayment schedule carefully to ensure it aligns with your financial situation.

What Happens If You Cannot Repay?

If you’re struggling to repay your advance due to financial difficulties:

1. Contact the Universal Credit helpline immediately to discuss your situation.
2. The DWP may adjust your repayment terms or extend the repayment period to ease the financial burden.

How to Apply for a Universal Credit Advance?

Applying for a Universal Credit advance is a straightforward process designed to help individuals facing financial difficulties while awaiting their full payment or dealing with changes in their circumstances.

Below, you’ll find detailed steps on how to apply and what to expect during the application process.

When Can You Apply for a Universal Credit Advance?

You can apply for an advance payment under the following circumstances:

1. Before Your First Payment:
   If you are in your initial Universal Credit assessment period and need financial support before receiving your first payment.
2. After Reporting a Change in Circumstances:
   If you have notified Universal Credit of a change in your circumstances that will result in an increased payment but haven’t received the adjusted amount yet.

Ways to Apply for a Universal Credit Advance

There are three primary methods for applying for an advance:

1. Through Your Jobcentre Plus Work Coach:

• Discuss your financial situation with your work coach during your scheduled appointment.
• Provide any supporting information that explains your need for an advance.

2. Through Your Online Account:

• Log into your Universal Credit online account.
• Navigate to the “Apply for an Advance” section and follow the instructions.

3. By Calling the Universal Credit Helpline:

• Contact the helpline to speak with an advisor about your application.
• Be ready to provide details about your circumstances and your bank account information.

Applying Through Your Online Account

If you’re in your first Universal Credit assessment period and have completed your initial interview at the jobcentre, you can apply for an advance online.

Here’s how:

1. Log into your Universal Credit account.
2. Select the ‘Apply for an Advance’ option.
3. Review the maximum amount available for your advance, which will be displayed on the screen.
4. If you’re part of a couple, confirm that your partner agrees to the advance.

Note: If you’ve already passed your first assessment period, online applications won’t be available. In such cases, you must apply through the helpline or your work coach.

Applying Through Your Work Coach or the Universal Credit Helpline

For those who cannot apply online, the process can be completed by:

• Speaking to your work coach at your local Jobcentre Plus.
• Calling the Universal Credit helpline to discuss your needs.

When applying this way, you’ll need to:

1. Explain Your Need for an Advance: Be clear about your financial situation and why you require the advance.
2. Provide Bank Account Details: Share the details of the account where the advance will be deposited. If you cannot open an account, discuss alternative options with your work coach.
3. Complete Identity Verification: Ensure your identity has been checked at the jobcentre during a previous appointment.

What Happens After You Apply?

Once your application is submitted:

• The DWP will assess your eligibility and calculate the amount you can borrow.
• If approved, the advance payment will be sent to your bank account.
• You will need to agree to repayment terms, which involve deductions from future Universal Credit payments.

What Are the Reasons to Apply for an Advance Payment?

Advance payments are intended to help claimants facing immediate financial challenges. Common reasons include:

• Delayed Payments: For first-time claimants, the wait for initial payments can be stressful. Advances bridge this gap.
• Emergency Expenses: Unforeseen costs, such as medical bills, urgent repairs, or replacement of essential appliances, are valid reasons to apply.
• Daily Living Costs: If your regular Universal Credit payment doesn’t cover your immediate needs, you can apply for an advance to manage rent, food, or utility expenses.

Tip: When applying, ensure you provide detailed information about your financial situation. This increases your chances of approval by demonstrating genuine need.

Can You Get Another Advance Payment?

Yes, you can apply for multiple advances, but the DWP closely monitors these requests to ensure claimants can manage repayments. If you’re considering applying for a second or third advance, keep the following in mind:

• Previous Repayments: Ideally, you should have repaid most or all of your existing advances.
• Exceptional Circumstances: Explain why you require another advance and how your financial situation has changed since the previous application.
• Communication with DWP: Contact your Universal Credit work coach or use your online account to discuss your situation before applying.

Example Scenario:

John, who works part-time, received an advance to cover his rent during the holiday season when his hours were reduced. Three months later, he faced another financial emergency due to unexpected car repairs.

By contacting his work coach and explaining his circumstances, John was approved for a second advance payment.

How the Universal Credit Advance Is Repaid?

When you receive a Universal Credit advance, it’s essential to understand the repayment process to manage your finances effectively.

Below is a detailed guide on how repayments are handled, your options if you face difficulties, and what happens if you no longer receive Universal Credit.

Repayment Deductions from Your Universal Credit Payments

Repayments are automatically deducted from your monthly Universal Credit payments, starting with your first payment. The deduction amount and repayment period depend on when and why you applied for the advance.

Repayment Timeframes:

• 24 months: For advances applied for on or after 12 April 2021 due to a new Universal Credit claim.
• 12 months: For advances applied for before 12 April 2021 due to a new claim.
• 6 months: For advances requested due to a change in circumstances.

These timeframes ensure that repayment amounts remain manageable for most claimants.

Delaying Repayments in Exceptional Circumstances

If you’re struggling to afford your repayments, you can request a delay. This is only permitted in exceptional circumstances and is subject to approval.

Delays Available:

• 3 months: For advances issued for a new claim.
• 1 month: For advances issued due to a change in circumstances.

To request a delay, contact the Universal Credit helpline and explain your financial situation.

If Your Advance Is Refused

There are several reasons why your advance application might be refused, including:

• Incomplete Identity Check: Your identity has not been verified at the Jobcentre.
• Sufficient Funds: You have enough money to last until your Universal Credit payment.
• Living Arrangements: You live with parents, relatives, or friends who can support you.
• Other Financial Resources: You have redundancy payments, final earnings, or accessible savings.

What You Can Do:
If your advance is refused, you can request the decision to be reconsidered. However, there is no formal right to appeal. Provide additional evidence or explain your circumstances more clearly to strengthen your case.

If You No Longer Receive Universal Credit

If you stop receiving Universal Credit but still owe money from your advance, you are required to continue repayments.

Repayment Options:

• If you transition to another benefit, deductions will usually continue from those payments.
• If you leave the benefits system altogether, you will receive a letter detailing:
  • The amount owed.
  • Instructions to contact the DWP Debt Management Contact Centre to arrange repayments.

Important: Ignoring this letter may result in additional action from the DWP.

What Happens If You Don’t Arrange Repayments?

If you fail to set up repayment arrangements, the DWP may recover the debt through:

1. Your Employer: DWP can contact your employer to arrange deductions directly from your earnings.
2. Debt Collection Agencies: The DWP may engage an independent debt collection agency to recover the money. You will need to liaise directly with the agency to set up repayment terms.

If You Cannot Afford to Pay Back Your Advance

In cases where repayment is unaffordable, contact the DWP Debt Management Contact Centre immediately. The DWP can help you by:

• Setting up a more affordable repayment plan.
• Offering advice and support to manage your financial situation.

Key Tip: Communicate proactively with the DWP to avoid escalation and ensure repayments are tailored to your circumstances.

How to Budgeting Advances for Long-Term Support?

While standard advances address short-term needs, Budgeting Advances are designed for claimants facing significant one-off expenses.

Eligible Expenses:

• Replacing essential household items (e.g., washing machines, refrigerators).
• Covering travel costs to start or maintain employment.
• Managing funeral expenses or other emergencies.

Eligibility Requirements:

• You must have received Universal Credit or another qualifying benefit for at least six months.
• Your household earnings in the past six months must be under £2,600 (£3,600 for joint claims).
• You cannot have any outstanding Budgeting Advances.

Important Limitation:
Only one Budgeting Advance loan can be active at a time, even for joint claims. If you need another loan, you must repay the existing one first.

Contact Information for Universal Credit Support

If you need help applying for an advance payment, you can use the following resources:

• Universal Credit Advance Payment Number: Call the DWP helpline for assistance.
• Online Account: Log into your Universal Credit account to check payment status or apply for support.

These resources ensure that you receive timely guidance, helping you navigate the process with ease.

Conclusion

Universal Credit advance payments and Budgeting Advances are vital tools for individuals managing financial challenges.

They provide immediate relief while ensuring claimants can meet essential living expenses. However, it’s crucial to understand the repayment obligations and limitations associated with these advances.

FAQ

How does an advance payment work on Universal Credit?

An advance payment is a loan provided to claimants who face delays in receiving Universal Credit or are in financial hardship. The amount is deducted from future payments over an agreed period.

Is there a limit to how many times you can request an advance?

While you can apply multiple times, the DWP evaluates each request based on repayment history and current financial needs.

What is the difference between a Budgeting Advance and a Universal Credit Advance?

A Budgeting Advance supports one-off expenses like appliance replacement, while a Universal Credit advance covers immediate living costs during payment delays.

How quickly can I get a Universal Credit advance payment?

Payments are often processed within the same day for urgent cases, but standard processing takes 3 to 5 working days.

What happens if I can’t repay my advance on time?

Contact the DWP immediately to discuss adjusting your repayment schedule.

How do I check the status of my Universal Credit advance payment?

Use your online Universal Credit account or contact the helpline for updates.

Are Universal Credit advances interest-free?

Yes, these advances are interest-free loans, but they must be repaid in full.