Newly issued DWP guidance explains what claimants need to know about the system’s rules
The Department for Work and Pensions has explained the rules surrounding a particular aspect of Universal Credit. The DWP update, released on Friday, September 11, came after a question raised in Parliament.
A senior minister has provided a response – but it has also highlighted an issue some claimants may not be aware of. The enquiry concerned payments for Universal Credit claimants and the effect this might have on debt.
Henry Tufnell, Labour MP for Mid and South Pembrokeshire, asked the DWP what assessment it had made of the potential impact on Debt Management and debt recovery of making advance payments to Universal Credit claimants before the conclusion of their assessment period.
In response, Stephen Timms, Minister of State (Ministry of Housing Communities and Local Government) (Equalities), The Minister of State, Department for Work and Pensions, said on: “New Claim Advances give customers the option to spread twenty-five Universal Credit payments over twenty-four months, giving them more flexibility over the payments of their Universal Credit award. Advances are not considered a loan so no interest is charged, nor any enforcement action taken, however Advances are recoverable.
“They are ordinarily repaid through deductions from subsequent Universal Credit awards over an agreed repayment period of up to 24 months. Customers must repay their advances over a maximum period of 24 months.”
So what are New Claim Advances? The gov.uk website says that if you need help to pay your bills or cover other costs before you get your first Universal Credit payment, you can apply to get an advance.
The amount you can get depends on your circumstances. The most you can get is the amount of your first estimated payment. You must usually pay back the advance within 24 months.
You usually start paying it back out of your first payment. If you cannot afford your advance repayments, you can ask for your repayments to be delayed for 3 months.
The government says that if you’re no longer claiming Universal Credit you’ll still need to pay back your advance. If you move to another benefit, the deductions will usually continue from your payments. If you move off benefits, you’ll get a letter from DWP Debt Management explaining how to repay and manage money you owe.
You can pay back what you owe in full or set up monthly repayments. Officials say that if you want to discuss your repayments you can call DWP Debt Management. For further information, visit the relevant gov.uk web page.
What to do if your Universal Credit advance claim is rejected
The Money Helper website has provided guidance for those whose applications are declined, noting several potential reasons why an advance payment may not be approved – for instance, if you live with family or friends, have enough money or savings to last until your next payment or haven’t had your ID checked at a Jobcentre Plus. The site says: “If you’re unhappy or think there’s been a mistake, you can ask the Department of Work and Pensions (DWP) to reconsider the decision. This means someone else will look at your application.”
The site also warns Universal Credit claimants of another issue they may encounter. It says that if someone you don’t know offers to apply for Universal Credit or a free government loan for you, it’s a scam. The site warns: “They’ll want to take some of your money as a fee and get your ID and bank details. If they apply on your behalf using false details, this can also be classed as benefit fraud and might mean you have to pay a large fine or be taken to court.
“You might see adverts online or receive cold calls from someone claiming to work for Jobcentre Plus.” If you are targeted, you can report it to Report Fraud online or by calling 0300 123 2040. In Scotland, call Police Scotland on 101.
The Money Wellness website reported in 2024 that debt levels were considerably higher amongst those claiming Universal Credit (UC) compared with those receiving so-called legacy benefits such as Income Support, according to DWP data.
It noted that the average outstanding debt owed by UC claimants stood at £4,754 — with almost one in five owing at least £10,000.
