People affected by the end of the universal credit increase of £ 20 per week can apply for an emergency loan to help their finances in the short term.
More than 5.9 million people are currently claiming Universal Credit, a benefit designed to help those who are unemployed or on low incomes meet the costs of daily living.
September will see the end of the leave scheme, claims for the final grant from the Self-Employed Income Support scheme and the end of the weekly £ 20 increase in universal credit – which in itself creates an air of uncertainty for those who depend on state support.
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With the possibility that more households will be affected by the economic impact of the health crisis, whether through layoffs, unemployment, illness or a reduction in wages, many will now be able to apply for financial assistance through the Department of Work and Pensions (DWP).
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But, thousands of potential applicants may not be aware that when you apply for universal credit the first payment can take up to five weeks and for those in immediate need of financial assistance it is now possible. to request a deposit.
However, it is important to know that this advance must be repaid as a deduction from their regular Universal Credit payment, however applicants now have 24 months to repay the loan, instead of the previous 12.
If a universal credit applicant does not report a change in their circumstances, they could have their payment stopped or reduced – this is called a penalty.
And if a person receives a sanction, they may be able to apply for hardship if they cannot afford rent, heat, food, or hygiene needs.
The GOV.UK website says, “If you don’t have enough to live on while you wait for your first payment, you can ask for a down payment after making a claim.
“You can also ask for a hardship payment if you can’t afford the rent, heat, food, or hygiene needs because you’ve been sanctioned.
“You have to pay it back through your Universal Credit payments – they’ll be lower until you pay it off.”
People in financial difficulty who are struggling to pay their rent can also apply for an Alternative Payment Arrangement (APA).
This could see the rent being paid directly to a landlord, the benefit paid more than once a month, or the payment split between the person and their partner.
There is also a budget advance that can help cover some costs, including emergency household expenses such as replacing a broken stove, getting a job, and funeral expenses.
The GOV.UK website explains that people who get a budget advance will pay it back through their regular Universal Credit payments.
This means that their universal credit payments will be lower until they pay it off, and if they stop getting universal credit, they’ll have to pay the money back some other way.
How much can I borrow?
The smallest amount you can borrow is £ 100. You can get up to:
What an eligible person gets depends on their savings of over £ 1,000 and their ability to repay the loan.
To obtain a budget advance, all of the following must apply:
- You have been receiving universal credit, employment and support allowance (ESA), income assistance, jobseeker’s allowance or state pension credit for six months or more, unless you need the money to help you start a new job or stay at work
You have earned less than £ 2,600 (£ 3,600 together for couples) in the past six months
You have repaid all previous budget advance loans
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