Ask CPAG Online - When can you get a universal credit advance?

This section looks at when you can get a universal credit advance. It covers the basic rules set out in the law, and the detailed requirements set out in the official guidance.

The main requirements are:

  • you are in ‘financial need’; and
  • you are waiting to be paid UC which the DWP think you will be entitled to. This can include, for example, where you must serve out ‘waiting days’ before your entitlement can begin, or where you are having to wait for over a month before you next payment because UC is usually paid a month in arrear; and
  • you apply for the advance. The DWP apply time limits for applications, although they are not set out in the law; and
  • the DWP are satisfied that you can afford to repay the advance. The DWP use a ‘repayment cap’ to decide this.

The basic rules

Regulations 4-6 of the Social Security (Payments on Account of Benefit) Regulations 2013 set out some basic rules. These rules say that you can get a universal credit advance if you are in ‘financial need’, and you are in one of the following two situations:

The first situation is:

  • you have claimed UC (or you can be entitled without having to make a claim); and
  • your claim has not yet been decided but the DWP think it likely that you will be entitled.

The second situation is where you have already been awarded a benefit for which an STBA can be paid; and

  • you are waiting for your first payment, or your first payment was for a short period and you are waiting for your next payment; or
  • you have had a change or circumstances which will increase your entitlement but this has not yet been done; or
  • it is ‘impracticable’ to pay you on the date on which you payment is due.

However, the law does not say that you must be paid an advance, even if you satisfy all the basic rules. Because of this, the DWP exercise a lot of discretion (i.e. their own judgement) about whether you should be paid an advance.

When might the DWP award you an advance?

Official guidance sets out the circumstances in which the DWP will apply the basic rules. The guidance says that you may be able to get a universal credit advance if you are in ‘financial need’ and:

  • You have made new claim for UC and are likely to be entitled but have not been paid yet; or
  • You have made a new claim for UC, having been getting a ‘qualifying benefit’ (income-based jobseeker’s allowance, income-related employment and support allowance, income support, housing benefit, child tax credit or working tax credit) within the last month. The DWP call these ‘benefit transfer’ cases; or
  • You are already getting UC but you have reported a change of circumstances which will ‘significantly’ increase your entitlement.

Many people are in financial need because of having to wait five or six weeks (or more) before they receive their first payment of UC after making their claim. In September 2017 Secretary of State for Work and Pensions David Gauke told the Conservative Party conference:

‘…we are refreshing the guidance to DWP staff to ensure that anyone who needs an advance payment will be offered it up-front. Claimants who want an advance payment will not have to wait six weeks. They will receive this advance within 5 working days. And if someone is in immediate need, then we fast track the payment, meaning they will receive it on the same day.’

The resulting new guidance, published in October 2017, is available here.  It tells staff that claimants should be made aware that advances are available if they are in financial need. To establish if you are in financial need you should then be asked if you have enough money to live on until your first payment of UC is due. If the answer is no, you should be offered an advance.

Financial need

Regulation 7 of the Social Security (Payments on Account of Benefit) Regulations 2013 says that ‘financial need’ is where because you are waiting for benefit there is a ‘serious risk of damage’ to your health or safety, or the health or safety of your partner or any children for whom you are responsible.

The official guidance provides very little extra detail about when you will be regarded as being in financial need. In practice, it is likely that the DWP will adopt a similar approach to that set out in paragraphs 22-23 of the guidance regarding short-term benefit advances (STBAs). That guidance gives some likely examples as including where you are:

  • Fleeing domestic violence
  • Without money for the gas/electricity meter
  • Without money or food.

For UC, other possible examples (not described in the official guidance) include where you are:

  • Without money for any basic expenses because you have to wait for over a month before your first payment of UC
  • Without money for any basic expenses because at the end of your previous job you got only a week’s wages.

For more detail about financial need for STBAs, see Ask CPAG – When can you get a short-term benefit advance/Financial need?

Are you applying after a ‘benefit transfer’?

If you have made a claim following a ‘benefit transfer’ from a ‘qualifying benefit’ (i.e. in the month before your UC claim, you were getting income-based jobseeker’s allowance, income-related employment and support allowance, income support, housing benefit, child tax credit or working tax credit), the DWP assume that you are in financial need.

DWP information says that:

‘A Universal Credit Advance (benefit transfer) is an interest free advance of benefit for claimants who are moving over to Universal Credit from relevant legacy benefits and during the first month are assumed to be in financial need —“ all they need to do is request an advance for it to be paid. It will be recovered over a set period of time.’

Can you afford to repay the advance?

Under official guidance, normally you will not be able to get an advance if deductions from your UC (including any already being made for fraud penalties or sanctions) would breach a ‘repayment cap’ of 40 per cent of your UC personal allowance, applied over a maximum recovery period of six (or twelve) months.

If repaying your advance would breach the cap, but you still insist that you need an advance and can afford to repay it, then in exceptional cases the DWP may agree to award you an advance. The agent deciding your application can exercise discretion. If your universal credit advance does breach the repayment cap, when you repay the advance your UC award will be significantly reduced for six (or twelve) months.

DWP time limits

Official guidance sets time limits for applying for a universal credit advance. If you do not apply within the time limits then you will not be entitled to an advance. For the details see How do you apply for a universal credit advance?

Have you been refused?

Although the official guidance does not say so, you can ask the DWP to reconsider a decision to refuse to award you a universal credit advance. Try to do this during the conversation in which you are told that your application is not accepted. You do not have the right of appeal. For more, see How do you challenge a decision about a universal credit advance.