PEOPLE on Universal Credit or benefits struggling to make ends meet can get extra help towards bills with a budgeting loan or advance.
It’s an interest-free loan from the Government which means you’ll only have to pay back what you borrow.
Getty – Contributor A budgeting loan or advance can be used to pay for household items or help with moving costs
It is a far cheaper way to borrow cash compared to using a payday or doorstep lender who charge high interest rates which could see you plunge further into debt.
The budgeting loan is available to those who are claiming certain benefits, while it’s called a budgeting advance if you’re on Universal Credit.
Even though they’re essentially the same thing, there are a few differences when it comes to eligibility.
We’ve put together a complete guide to who and how you can apply for the extra help:
What is a budgeting loan?
A budgeting loan – or a budgeting advance if you’re on Universal Credit – is cash on top of your benefits which will help you pay for certain essential expenses.
Unlike a loan from the bank or a payday lender, it’s interest free so you will only need to pay back what you borrow.
It isn’t included in the Benefit Cap and you can take one out even if you’ve already had a Universal Credit advance loan.
It’s particularly useful for those who are moving homes and need money to cover moving costs and furnishings, to pay for replacement household items or help with rent.
You can use the money to help pay for:
Furniture or household white goods such as a washing machines and fridges
Clothes or footwear
Rent in advance
Costs linked to moving house
Maintenance, improvements or security for your home
Travelling costs within the UK
Costs linked to getting a new job
Repaying rent-to-own loans with firms such as PerfectHome and BrightHouse
Repaying loans taken out for any of the reasons on this list.
Remember though, it is a loan and you will be expected to repay the debt, so make sure you can afford to take one out before applying.
Before you apply for the loan, make sure that your expenses can’t be covered by these other grants because you don’t need to pay them back:
What to do if you have problems claiming Universal CreditIF you’re experiencing trouble applying for your Universal Credit, or the payments just don’t cover costs, here are your options:
Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it’s a loan which means the repayments will be automatically deducted from your future Universal Credit pay out.
Alternative Payment Arrangements- If you’re falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you’re part of a couple.
Budgeting Advance – You may be able to get help from the government to help with emergency household costs of up to £348 if you’re single, £464 if you’re part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You’ll have to repay the advance through your regular Universal Credit payments. You’ll still have to repay the loan, even if you stop claiming for Universal Credit.
Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your payments aren’t enough to cover your rent.
Foodbanks – If you’re really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussel Trust website.
Who can get a budgeting loan?
You can take out a loan or advance as long as you are claiming one of these benefits on the day that you apply:
Income-related Employment and Support Allowance
Income-based Jobseeker’s Allowance
You can also get an advance if you’re claiming Universal Credit and have earned less than:
£2,600 total in the previous six months and you are single
£3,600 total in the previous six months and you are a couple.
You must have been receiving the benefit, or have been the partner of someone claiming one, for the past 26 weeks.
Breaks of up to 28 days taken during this time will be ignored for the assessment.
Time spent claiming legacy benefits right up until you were rolled onto Universal Credit will also count towards the 26 weeks.
PA:Press Association/PA Images Not everyone on benefits is automatically entitled to receive the extra payout
The waiting period may be wiped entirely if the reason you’re applying for the loan in the first place stops you from going to work.
Not everyone is automatically entitled to the payout either – it depends on your circumstances and whether you can actually afford to pay back the loan.
You won’t be able to get the loan or advance if you or your partner has more than £1,000 in savings, or more than £2,000 if you’re over 62-years-old and not on Universal Credit.
You can apply for a budgeting loan even if you’ve taken one out before unless you’re still repaying it.How much can I get and when do I pay it back?
The minimum amount you will receive is £100 but you may be entitled to more. You can get up to:
£348 if you’re single
£464 if you’re part of a couple
£812 if you have children.
You will only be offered an amount that the DWP thinks you’ll be able to pay back, so it may be less than the maximum you’re entitled to.
If your application is approved, the payment will be made directly into your bank account.
The Sun wants to Make Universal Credit WorkUNIVERSAL Credit replaces six benefits with a single monthly payment.One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7 million will be on it.
But there are big problems with the flagship new system – it takes 5 weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the government to:
Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4 million families.
Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our Universal Credit Facebook group or email UniversalCredit@the-sun.co.uk to share your story.
If you’re on the old benefits system you will have to pay back the loan within two years.
Those on Universal Credit will only have a year to pay it back, or 18months in exceptional circumstances.
How do I claim a budgeting loan or advance?
You don’t need to explain exactly why you need the loan but you will have to let the DWP know which category of the expenses that you’ll be using it for and how much you will need.
Those who are living in England, Scotland and Wales can apply for the help by applying online here or by speaking to an adviser at the local Jobcentre Plus.
People living in Northern Ireland will need to contact their local Social Security or Jobs and Benefits Office and ask for claim form.
You’ll need to provide your national insurance number, details of any savings and debt repayments you’re making, as well as personal details including how many children you have.
It usually takes between five and six weeks for a budgeting loan or advance to be processed, which starts from the day the DWP receives your application.
What happens if I’m refused a budgeting loan?
If your claim has been rejected and you don’t agree that it should have been then you can request a review by writing to you Jobcentre Plus within 28 days.
You’ll need to explain why you think the decision is wrong – you can get help from an adviser to help you do this.
MAKE UNIVERSAL CREDIT WORK
If you still aren’t happy with the decision then you can ask the Independent Case Examiner to take a look and give you an answer within 21days.
People who can’t wait five weeks for their first Universal Credit payment can apply for an advance payment instead.
You can also apply for the Flexible Support Fund which can be issued on top of other benefits and used to help cover the costs of things like childcare, uniforms or work tools as long as they help you get a job.
Struggling mum tries to feed family with £1.80 a day after 7-week Universal Credit delay left her skint
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at email@example.com