Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what criteria her Department uses to determine the repayment rates for Advance Payments awarded to people struggling financially who are in receipt of universal credit.

Universal Credit advances must be repaid in either a maximum of 12 months (for new claim, benefit transfer and budgeting advances) or 6 months (for a change of circumstances advances). The amount of the advance awarded is divided by either up to 6 or 12 to get the appropriate monthly repayment rate.

This is explained in the advance award discussion with the claimant to make sure they can afford to repay the advance. However, if a claimant wishes, they can pay it back in less than the maximum number of months available, as long as the monthly repayment does not exceed the maximum repayment rate of a claimant’s standard allowance, which as a result of the 2018 Autumn Budget will be reduced from 40% to 30%.

If during the recovery of an advance the claimant experiences an unforeseen expense that would cause them or their family genuine hardship if they were required to continue to repay the advance, then they can be offered a deferral period of the repayment of the advance of up to 3 months for a new claim, benefit transfer or change of circumstance advance and up to 6 months for a budgeting advance.