Source · Select Committees · Work and Pensions Committee
Recommendation 17
17
Paragraph: 105
Advance payments can provide a valuable lifeline to people who might otherwise face going five...
Conclusion
Advance payments can provide a valuable lifeline to people who might otherwise face going five weeks—or longer—without any income. The changes that DWP has introduced so far, especially allowing people to request Advances equivalent to their entire expected award and extending the repayment period, are welcome. However, there is clear evidence that Advance repayment deductions still leave some people without enough to live on. This leaves claimants facing a difficult choice: five weeks with no income, or the risk of debt and hardship later.
Paragraph Reference:
105
Government Response
Not Addressed
HM Government
Not Addressed
A new claim Advance is not a loan. It allows for UC entitlement to be spread over thirteen payments rather than twelve in a year. Use of incorrect terminology in this respect will only serve to dissuade claimants in genuine need from making a claim to UC. To avoid claimants receiving more of an Advance than they require, New Claim Advances are limited to the claimant’s estimated monthly award. In addition, all claimants are encouraged to consider the amount of Advance they request and the impact of this on UC payments they will receive over the following year. More generally, Work Coaches gauge claimants’ financial needs from their first interview and can refer them to more specialist support for personal budgeting, money guidance and debt advice if required, and we have invested a further £38m in the Money and Pensions Advisory Service this year to support those claimants affected by COVID-19. For claimants who find themselves in unexpected hardship, the impact of taking an advance on the spreading of UC payments can be deferred for up to three months. The Department is considering the policy of automatic referral for budgeting support to the Money and Pensions Advisory Service,