Examples of how short-term benefit advances are claimed and repaid
Here are examples1 of how much short-term benefit advance (STBA) you can get and how DWP can recover the loan from you.
The claimants in these examples are either on jobseeker's allowance (JSA) or on employment and support allowance (ESA) of £70 a week.2
Yannis: claims JSA, asks for STBA before first payment is due
Yannis claims JSA on Thursday 30 October 2014. His first payment is not due until his benefit week end date of Friday 14 November, which is a fortnight and a day after his date of claim.
Yannis phones DWP Contact Centre on Thursday 6 November to check the progress of his claim and explains that he has no money for food and cannot wait until Friday 14 November. The Contact Centre suggests a STBA. The important fact here is that Yannis has asked for a payment before his benefit week end date of Friday 14 November. (If he had asked after that date, a likely outcome would have been for DWP to pay his actual benefit as their guidance tells them to pay the benefit that is due before considering a STBA.3)
The Benefits Processor decides that he is likely to get JSA and the Decision Maker decides that he is in financial need.The Contact Centre phones Yannis back within three hours4 to say that his maximum advance will be based on sixty per cent of his daily rate from the date of his request to his benefit week end date.
There are nine days (inclusive) from 6/11/14 to 14/11/14 and so Yannis' maximum advance is:
9 days x 60% daily rate of £10 = 9 x £6 = £54
Repayment will be by deduction of equal amounts from future payments. DWP decides to recover £5.40 a week over ten weeks. (The normal maximum is twelve weeks.)
Abigail: claims ESA, asks for STBA during her 7 waiting days
After claiming ESA on 27 October, Abigail runs out of money and asks for a STBA on 30 October, which is before her first benefit week end date of 7 November.
The Benefits Processor decides that she is likely to get ESA and the Decision Maker decides that she is in financial need.
Her advance is based on sixty per cent of her daily rate, but it cannot include any of her 7 waiting days from 27/10/14 to 2/11/14. So it will be limited to the five days from 3/11/14 to 7/11/14 (inclusive):
5 days x 60% daily rate of £10 = 5 x £6 = £30
The important point here is that she can get a cash payment on 30 October, which is before her 7 waiting days have ended.
Repayment will be by deduction of equal amounts from future payments. DWP decides to recover £3 a week over ten weeks. (The normal maximum is twelve weeks.)
Benita: asks for STBA for period before and after first benefit week
Benita is an example of someone who needs a payment that takes her beyond the end of her first benefit week. Getting a STBA as in the above examples would only give her enough money for a couple of days up to the end of her first benefit week and would not be enough to get her through the following fortnight until her second benefit payment is due.
Benita claims ESA on Thursday 30 October. Her benefit week end date is a week and a day after her date of claim: Friday 7 November. On Thursday 6 November Benita runs out of money and asks for a STBA. The Benefits Processor decides that she is likely to get ESA and the Decision Maker decides that she is in financial need. Benita cannot get any STBA for any of her waiting days. So the only days that can be included in her advance up to the end of her first benefit week are 6 and 7 November. Her maximum advance in her first benefit week is two days at sixty per cent of her daily rate:
2 days x 60% daily rate of £10 = 2 x £6 = £12
The Decision Maker decides that she is still going to be in financial need for the period beyond the end of her first benefit week. Her maximum advance for this period covers the full fortnight from her first benefit payment to her second benefit payment, 8/11/14 to 21/11/14, and is based on sixty per cent of her daily rate:
14 days x 60% daily rate of £10 = 14 x £6 = £84
Total STBA = £12 + £84 = £96
Repayment will be by deduction of equal amounts from future payments. DWP decides to recover £12 a week over eight weeks. (The normal maximum is twelve weeks.)
- 1. These examples are based on paragraphs 38, 39 and 47 of DWP STBA Guidance for Benefit Centres
- 2. We use this weekly rate for convenience: the actual rate in 2015/2016 and 2016/2017 for a single adult over 25 is £73.10 a week. In the case of ESA this is the rate during the 'assessment' phase while the claimant is waiting for a work capability assessment (that is, before one of the components is included). The rates are being frozen for the next four years, 2016/17 to 2019/20.
- 3. See paragraph 3 of DWP STBA Guidance for Benefit Centres.
- 4. See paragraph 22 of DWP STBA Guidance for Contact Centres.