Universal Credit

(asked on 1st May 2019) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, pursuant to the Answer of 15 April 2019 to Question 243330 on Universal Credit, what assessment her Department makes of other repayment commitments that claimants may have alongside their obligation to repay a universal credit advance; and whether any such assessments affect the repayment period relating to such advances.


Answered by
Alok Sharma Portrait
Alok Sharma
COP26 President (Cabinet Office)
This question was answered on 8th May 2019

The purpose of Universal Credit new claim advances is to provide those in financial need with fast access to a payment to see them through until their first Universal Credit payment is due. Introducing an assessment of claimant’s other repayment commitments would delay this.

Affordability is managed by ensuring the recovery rate will not be more than the equivalent of 40% of their benefit unit’s standard allowance. Help is available for those struggling to meet the recovery rate. In exceptional circumstances, recovery can be deferred for up to 3 months from the start of the recovery period.

Advances are not loans; they are an interest free payment benefit advance, available to help people who need immediate financial support, which is then recovered over an agreed period. The Department has taken a number of steps to ensure that advances meet the needs of claimants and that the recovery arrangements are personalised and reasonable. From October 2021 we are increasing the recovery period for advances from 12 to 16 months, further supporting those in financial need.

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