Universal Credit new claim advances provide access to a payment for those in financial need, which can be accessed urgently, until their first UC payment is due. Claimants can access up to 100% of the total expected monthly award, for which they can pay back over a period of up to 12 months.
The Department has taken a number of steps to ensure that advances meet the needs of claimants and that recovery arrangements are personalised and reasonable. The maximum rate of deductions cannot normally exceed 40 per cent of the Universal Credit standard allowance and does not reduce other components of an award, such as money paid for children, housing or when someone is caring for a severely disabled person. From October 2019 this will be reduced to 30 per cent and from October 2021 we are increasing the maximum recovery period for advances from 12 to 16 months.
The Department more broadly wants to ensure that vulnerable claimants receive the financial support they need, which is why we announced the addition of SDP payments. By August 29th, we had already paid over 6,300 claims, which together are worth over £16 million.