Source · Select Committees · Scottish Affairs Committee
Recommendation 118
118
Should a claimant require money before the five week wait has been completed they can...
Conclusion
Should a claimant require money before the five week wait has been completed they can apply for an advance payment. This means a claimant can receive an advance worth the amount of their first estimated payment on Universal Credit.299 According to the Minister for Welfare Delivery, Will Quince MP, these advance payments can be made to claimants ‘usually within 24 hours, certainly within a small handful of days.’300 The advance payment needs to be paid back; however, a claimant does not pay interest on the payment—the total amount received as an advance is the same amount that is paid back to the DWP. The money is reclaimed by the DWP in the subsequent payments that the claimant receives from Universal Credit. As of, 12 April 2021, the conditions for advance payments have changed. Rather than pay back the advance over a 12-month period, claimants can now pay back their advance over a 24 month period if they prefer and the rate at which deductions of Universal Credit payments are made to pay for the advance has decreased from 30% to 25%.301
Government Response
Not Addressed
HM Government
Not Addressed
New Claim Advances are the claimant’s benefit paid early, allowing claimants to access up to 100% of their estimated Universal Credit payment upfront. With a Universal Credit Advance, claimants receive an additional Universal Credit payment, which now can result in 25 payments over 2 years, rather than 24. This extension to spreading payments over 2 years was for New Claim Advances or Benefit Transfer Advances issued from 12 April 2021. Advances issued before 12 April 2021, do not have their maximum repayment period extended as claimants agreed to having their 13 UC payments spread across up to 12 months. The introduction of non-repayable advances would increase fraud risk in the benefit system, as well as imposing the administrative burden of extra verification checks. Additionally, people with sufficient earnings or income with little or no entitlement to Universal Credit, could inappropriately gain, by speculatively claiming in order to obtain a non-repayable sum upfront. Furthermore, DWP estimates the costs of non- repayable grants to be between £2.2 and £2.8 billion.