DWP offers £ 800 in emergency cash to universal credit applicants hit by reduction

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With the six million people on Universal Credit seeing their allowance cut by more than £ 80 per month, applicants will now be looking to save money and find additional sources of money.

The government hopes to encourage more people to work and has also offered a £ 500million support fund for the winter months.

Footballer Marcus Rashford has warned that families on the brink of bread will have to choose between heating and eating this winter, days after the temporary £ 20-per-week increase in social benefits was halted from 6 October.

READ MORE: DWP could put extra £ 600 per month in your account as new PIP claims guide revealed

Mr Rashford, an activist against poverty, said: “The cost of living has definitely gone up. You know household members have to decide – it reminds me of my situation when I was younger, to be fair – you have to decide between are you going to eat or are you going to be hot in the house?

“And these are decisions that you don’t want people to go through, let alone the kids, and, you know, there are other things – there is the price of fuel and electricity.”

But the DWP says other help is available and that includes emergency payments for those in dire need of money.

Budgeting of advances

Those receiving universal credit, income-related employment and support allowance, income support, income-related jobseeker’s allowance or pension credit may ask for what is called a budget advance.

You can get up to £ 812 under the scheme. It is designed to help:

  • emergency household expenses such as replacing a broken stove
  • find a job or stay at work
  • funeral expenses

The DWP points out that a budget advance is a loan and that you will have to repay it by deducting your regular universal credit payments.

The smallest amount you can borrow is £ 100. You can get up to:

  • £ 348 if you are single
  • £ 464 if you are a couple
  • £ 812 if you have children

The amount you can get depends on whether you can repay the loan or have savings over £ 1000. The loan amount offered is reduced by £ 1 for each pound you save beyond the £ 1000 threshold.

You must repay the budget advance within 12 months. And if you switch to another benefit, or if you stop social assistance altogether, it still has to be reimbursed by other provisions. The DWP is able to recover what you owe by contacting your employer to block your salary repayments or by involving debt collectors.

To obtain a budget advance, you must have:

  • have obtained universal credit, income-related employment and support allowance, income support, income-related jobseeker’s allowance, or pension credit for six months or more, unless you need to money to help you start a new job or keep an existing job
  • earned less than £ 2,600 (£ 3,600 jointly for couples) in the last 6 months
  • reimbursed all previous budgetary advances

To request a budget advance, contact your local Jobcentre Plus work coach.

Loan budgeting

A similar amount – up to £ 812 – is also available for those receiving certain benefits in the form of a budget loan, the new name for what was once known as the crisis loan.

A budget loan can help pay:

  • furniture or household items (eg washing machines or other “white goods”)
  • clothes or shoes
  • rent in advance
  • moving costs
  • the maintenance, improvement or security of your home
  • travel expenses to UK
  • the costs of obtaining a new job
  • maternity expenses
  • funeral expenses
  • repay hire-purchase loans
  • repay the loans taken out for the above items

To get a budget loan, you must have enjoyed one or more of these benefits in the past six months:

  • Income support
  • Income-based jobseeker’s allowance
  • Employment allowance and income support
  • Pension credit

Budget loans are not available if

  • you are currently receiving universal credit
  • you receive a new jobseeker’s allowance or a new style of employment and support allowance
  • you are involved in industrial action (for example a strike, walkout or lockout)
  • you owe over £ 1,500 in total for crisis loans and budget loans

You can apply online for a budget loan here

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