5. Help with managing your money
If you have made a Universal Credit claim but are unable to manage until your first payment, you may be able to get a Universal Credit advance.
The amount you can ask for will depend on your first estimated Universal Credit monthly payment.
The cost of your advance will need to be spread across your monthly Universal Credit payments. This means you could receive 25 payments in 24 months or 13 payments in 12 months depending on when you applied. You can choose how many months to spread the cost of your advance so long as this is within the limits below:
- 24 months if you apply on or after 12 April 2021
- 12 months if you applied before 12 April 2021
To apply for an advance payment, you’ll need to:
- let the Department for Work and Pensions know why you need the advance
- provide your bank details so that the money can be paid if an advance is agreed
- agree to cover the cost of the advance and to spread the cost over a fixed period through reduced monthly Universal Credit payments
You will usually be told if you can get an advance on the same day that you apply for it.
You can apply for an advance payment in your online account. If you are unable to apply online, you should contact your Work Coach through your journal if possible, but if not you can call the Universal Credit helpline.
New claim advances are available only to new eligible Universal Credit claimants who can demonstrate they need extra financial support during the month before their first Universal Credit payday. The amount you get and how you spread the cost of the advance is agreed with your Universal Credit Case Manager. Your identity has to be verified either online or over the telephone by someone from DWP. When making a request for an advance, make sure that you claim for the amount of Universal Credit that you need.
You may be able to get a change of circumstances advance. This is when you are entitled to a larger Universal Credit payment, but you haven’t yet received that increased amount. If your situation has changed – such as the birth of a child – you can apply for an advance by calling the helpline. The cost of this type of advance will usually need to be covered within 6 months.
If you are experiencing severe financial difficulties, you may extend the time period to cover your advance payment so that this includes a pause for up to 3 months for new claim advances, or up to one month for change of circumstances advances. This is only available in exceptional circumstances. If you think you need to explore this option, you should contact your Work Coach using your online account. If you are not able to access your online account you can call the helpline.
Read more about getting a Universal Credit advance.
Never give out personal or financial information. The Department for Work and Pensions will never approach you in the street or ask for personal details over social media. Listen to your instincts – if something feels wrong then it’s usually right to question it. If someone offers you a low cost loan from the government they may be trying to steal your identity. If you believe you have been targeted by fraudsters, get in touch with Action Fraud on 0300 123 2040 or online at www.actionfraud.police.uk.
From 22 July 2020, if you are receiving income-based JSA, income-related ESA or Income Support, and either choose to claim Universal Credit, or a change in your circumstances means you need to claim Universal Credit instead, you may receive an additional 2 weeks’ worth of those payments.
Managing your money
Universal Credit is paid as a single monthly payment. It will usually be up to you to pay your rent and bills for the month using this money.
You may be used to managing your money on a monthly basis, but if not you will need to make sure you can pay all your bills from this single payment. In most cases this will include paying your own rent and other housing costs.
A range of support services are available to help you budget. You can talk to your work coach about the type of help you might need. Options could include an online service, advice sessions by phone, or face-to-face support.
If you want some help with managing your money, you can use the online Money Manager. This is a digital tool created by the MoneyHelper service, which offers personalised money management advice.
Use the DWP digital Midlife MOT to take stock of your work, health and money with future planning in mind.
See Universal Credit: help with managing your money for more advice and information.
Alternative Payment Arrangements
If you are having trouble managing your money whilst on Universal Credit you may be able to use an Alternative Payment Arrangement. These are changes to the way that Universal Credit is paid that can help you to pay your bills and living costs.
Alternative Payment Arrangements can be one or more of:
- Universal Credit housing costs paid straight to your landlord
- more frequent payments, such as twice a month
- payments split and paid into 2 bank accounts instead of one
Alternative Payment Arrangements are kept under review to make sure they are providing the right support. When one is agreed you may also be asked to take steps to help you manage your money, such as getting budgeting advice, and you will agree a review date. The purpose of that review is to decide if an Alternative Payment Arrangement is still the best approach for you.
You can ask for an Alternative Payment Arrangement at any time from your new claim interview onwards, although one can only be put in place following the end of your first assessment period. Speak to your work coach or contact the Department for Work and Pensions for more information.