CHRISTMAS is an expensive season and if you’re on benefits it can be really tough financially.
However there is help available in the form of a Budgeting Advance, which pays up to £812 for any one-off expense.
A Budgeting Advance could help pay for one-off expenses[/caption]
You’re eligible to claim if you’re on certain benefits, including Universal Credit and while you do have to repay it, there are no interest charges on the money you borrow.
This means it’s more cost-efficient than a bank loan or buying on your credit card and could come in handy if your fridge freezer or oven fails in the run-up to the big day.
Payments are deducted directly from your benefit and spread over two years, with repayment amounts agreed when your application is accepted.
Who is eligible for a Budgeting Advance?
If you receive Universal Credit, Income Support, Employment and Support Allowance, Pension Credit, or Jobseeker’s Allowance, then you could be eligible for a Budgeting Advance.
Your earnings must not have been above £2,600 (£3,600 for couples) in the past six months. Additionally you need to have been in receipt of your benefit for at least six months.
If you already have a Budgeting Advance you have yet to pay back, then you cannot take out a new loan.
You must also confirm you are able to afford the repayments as they will be taken directly from your benefits.
A Budgeting Advance can be used for a number of unexpected costs, including:
- A broken appliance such as a fridge or cooker
- Repairs to your home
- Moving costs
- Essential items
- Maternity expenses
- Work-related costs such as travel, or buying a uniform or tools
- Funeral expenses
How much can you borrow?
You can borrow up to £812 if you have children, £464 if you’re a couple and up to £348 if you’re single.
The minimum amount you can borrow is £100, however the actual amount agreed depends on how much you need.
Loans also depend on how much capital – money, investment, savings and some types of property – you have.
If you have more than £1,000 then the Budgeting Advance will be reduced by the amount over £1,000.
So for example if you have £1,300 the amount you could borrow would be cut by £300.
How to repay the Budgeting Advance
Repayments will be taken directly from your future Universal Credit or other benefit payments and you will be told how much they will be when your application is accepted.
You have up to two years to repay the advance and you’re still liable for repayments even if you no longer receive benefits.
If you start work you will be expected to repay the loan through your salary.
How to apply for a Budgeting Advance
You can apply for the Budgeting Allowance through your Universal Credit account, via the Universal Credit helpline on 0800 328 5644, or through your local Jobcentre.
You will be asked if you have any existing debt as the advisor will need to make sure you can afford the repayments and you will also be asked about any savings.
You should receive a decision on your application the same day.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity Turn2Us’ benefits calculator works out what you could get.
Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.
You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
There is no appeal if you’re turned down, but Citizen Advice says you can ask for your application to be looked at again.
If you can show your circumstances have changed this could help.
What can I do if I’m not eligible?
If you haven’t received your first Universal Credit payment and you need help with bills you can apply for an Advance Payment.
This can be up to 100% of your estimated first payment and you have up to two years to pay it back.
For claims due to a change in circumstances the repayment term is generally six months.
Repayments will be deducted from your first benefit payment then taken from subsequent payments until the advance is cleared.
You can apply for the Advance Payment through your Universal Credit account or through your Jobcentre Plus work coach. The Universal Credit helpline can also assist with your application.
The Advance Payment is a loan and you will be liable to repay it even if you stop claiming benefits, for example through your wages.
Repayments can be delayed in certain cases for up to a month for change of circumstance applications and up to three months for new claimants.
If you fail to keep up with repayments the Department of Work and Pensions could take them at source from your wages or contract a debt collection agency to collect the money.
Are there any alternative kinds of support available?
Cost of living support can help with utility bills, housing costs and NHS prescriptions.
Citizens Advice can also help with information on benefits you might be entitled to as well as help with budgeting and managing bills.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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