New and existing Universal Credit claimants can apply online for an emergency loan in advance with a £ 20 benefit cut.

More than 5.9 million people are currently claiming Universal Credit, a benefit designed to help those out of work or on a low income cover the costs of daily living.

The Department for Employment and Pensions (DWP) has contacted all benefit claimants across the UK confirming that their Universal Credit payment will be reduced by £ 20-a-week from 6 October 2021.

Despite many vocal opposition to ending the lift, including First Minister Nicola Sturgeon joining the First Minister of Wales and the First Minister and deputy First Minister of Northern Ireland to ask Prime Minister Boris Johnson to “do the right thing” by reversing the decision to withdraw the £ 20-a-week increase in Universal Credit, the DWP plans to continue with the monthly reduction.

Now that the furlough scheme is over and the applications for the fifth and final Self-Employment Income Support Scheme Grant (SEISS) are closed, there is a big possibility that more households will be affected by the economic impact of the coronavirus pandemic, either through redundancy, unemployment, illness or wage cuts, forcing more people to claim financial support through DWP.

However, thousands of potential claimants may not be aware that when you apply for Universal Credit, it can take up to five weeks for the first payment and for those in immediate need of financial support, it is possible to apply for a prepayment.

It is important to be aware that this advance must be repaid as a deduction from their regular Universal Credit payment, however claimants now have 24 months to repay the loan, instead of the previous 12.

To apply for an initial Universal Credit you can:

  • talk to your job coach at Jobcentre Plus

  • apply through your online account

  • call the Universal Credit helpline on 0800 328 5644

If a Universal Credit claimant fails to report a change in their circumstances, they may find that their payment has been stopped or reduced-this is known as a penalty.

And if a person receives a penalty, they can request a hardship payment if they cannot pay the rent, heating, food or sanitation needs.

The GOV.UK website states: “If you don’t have enough to live on while you wait for your first payment you can request a down payment after you claim.

“You can also request a hardship payment if you can’t pay for rent, heating, food or sanitation needs because you got a penalty.

“You have to pay it back through your Universal Credit payments – lower them until you pay it off.”

Financial aid available in Scotland

People who are experiencing financial difficulties struggling to pay their rent, can also apply for an Alternative Payment Arrangement (APA).

The measure would see that rent would be paid directly to a homeowner, the benefit would be paid more often than once a month, or the payment would be split between the person and their partner.

There is also a Budget Advance that can help with some costs. These include:

The GOV.UK website explains that people who get a Budgeting Advance will pay for it through their regular Universal Credit payment.

This means that their payments to Universal Credit will be lower until they get it back, and if they stop getting Universal Credit, they will have to pay the money some other way.

How much can I borrow?

The minimum amount you can borrow is £ 100. You can get up to:

What an eligible person earns depends on whether they have savings of more than £ 1,000 and can repay the loan.


To get an Initial Budgeting, all of the following must apply:

  • You receive Universal Credit, Employee and Support Allowance (ESA), Income Support, Jobseeker Allowance or State Pension Credit for six months or more, unless you need money to help you start a new job or stay at work
  • You have earned less than £ 2,600 (£ 3,600 put together for couples) in the last six months

  • You have already paid off any previous Budgeting loans

To find out more about advance or hardship payments and budgeting loans, visit the GOV.UK website here.

Support through hardship funds is also available to all 32 Scottish councils – find it here.

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