How to get a £1,000 Christmas emergency loan if you’re on Universal Credit
STRUGGLING Brits can apply for cash to help them get through Christmas.
Universal Credit claimants can access a loan to tide them over while they wait for their first benefit payment to come through
You can also get the cash if you're already on Universal Credit but are waiting for a higher amount to be paid after a change in circumstances, for example having a baby.
Bills are expected to rise for millions over the winter because of an increase to energy costs and food.
Meanwhile those on Universal Credit will get less money after the temporary upliftthrough Covid came to an end.
Anyone making a claim for Universal Credit for the first time faces a five week wait for the money.
This can leave people without cash and struggling to pay bills.
But the department for Work and Pensions (DWP) offers advance payments to those who need it.
This means you can borrow money to avoid a shortfall and then pay it back over several months.
You won't pay interest like with a normal loan or overdraft, but repaying the loan can reduce the amount of money you have each month in future.
How much you can get as an advance depends on the amount of Universal Credit you're entitled to.
The most is just over £1,000 if you get the maximum Universal Credit award and you can find out the exact amount you can get when you apply.
Here we explain how the advance payment works and how to get them.
How does a an advance payment work?
You can ask to borrow up to 100% of your estimated Universal Credit payment – but you can also ask for less.
The loan is interest free, so you'll never pay back more than you borrow, but you will have to repay it.
You should get the money through within three days of asking for the advance and it will be paid into your bank account.
You'll need to make it last the five weeks before your first UC payment comes through,
And remember that the amount you get will be deducted from future payments, including your first one, so you'll have to budget for reduced UC payments too.
You can pay the money back over as long as 24 months. Previously it was 12 months but there was a change to rules in April this year.
You can work out how much will be deducted from your payment every month by dividing the full cost of the loan by 24.
For example, if you borrowed £1,000 you will see £41.67 taken off your Universal Credit payment every month.
If you get a job and stop claiming Universal Credit, you'll still be expected to reapy the loan.
How to apply for an advance on Universal Credit
To get an advance payment you can apply in a number of ways.
You can speak to your work coach at the Jobcentre, apply through your online Universal Credit account or call the helpline on 0800 328 5644.
If you're applying because of a change of circumstance then you'll have to do this by phone, and normally repayments are made over six months.
You'll need to explain why you need the advance – you won't get the loan automatically.
You'll also need to agree to pay back the cash, and show that you can, and provide account details for where you want to get the payment.
You will also agree how much you will repay each month a the time you apply.
if you're struggling to repay your advance you may be able to pause the repayments for up to three months, or one month if it's a change in circumstances/
You'll have to contact your work coach, ask online or call the helpline to ask for this.
You'll usually be told the same day if you will get your advance loan.
More help if you're on Universal Credit and struggling
There's other help too if you're struggling to get by.
Asking family for help can also be an option if you're struggling, but make sure you agree on the terms before to avoid any disagreement later.
Credit Unions can also offer an alternative to and are often a cheaper option for borrowing compared to high cost credit.
Contact your local council and find your nearest credit union to check what products are on offer.
Don't forget to check that you're getting all the benefits you're entitled to, by using online calculators, such as these ones from charity Turn2Us.
If you’re on Universal Credit or a low income then you may be able to get help paying for your council tax.
You’ll need to apply for this from your local council in England and Wales, which you can find on Gov.uk.
The amount of discount you get depends on your circumstances, your income and who you live with as well as your local council, as they each run different schemes.
If your Universal Credit payment is not enough to cover your rent, you can apply for a Discretionary Housing Payment (DHP).
This will give you extra money if your council decides you need help to meet your housing costs. You don't need to repay a DHP.
You can use it to cover a rent shortfall, rent deposits, or rent in advance if you need to move house.
The Flexible Support Fund is designed to help people claiming unemployment benefits to find a job. It is offered by local jobcentres by Jobcentre Plus advisers.
If you are claiming Universal Credit, you may also be able to get help with the first month of childcare costs from the Flexible Support Fund.
There is no set amount you claim as the payment will depend on individual circumstances.
If you’re on Universal Credit, you can apply for a Budgeting Advance to help with unexpected costs.
That can cover the need to replace white goods, or when you are starting a new job, or coving funeral costs.
The amount you get depends on how much you have in savings and your ability to pay the loan back.
Low income households can get £25 a week to help with energy bills during the winter thanks to the cold weather payment scheme too.
The warm home discount scheme means you can a £140 payment that goes toward your heating costs.
Charities have grants to help those need, and you may be eligible for a support payment.
You can use the Turn2us online grant search to find out what grants you could be eligible for based on your circumstances.
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