DWP £812 loan uplift for those claiming certain benefits

Universal Credit claimants who take out a Budgeting Advance of up to £812 for an unexpected emergency now have 24 months to repay the full amount they borrow from the Department for Work and Pensions (DWP). This increase from 12 months is designed to ensure that claimants repay smaller amounts over a longer period, easing any financial pressure caused by the benefit deduction.

However, it's crucial to note that Universal Credit payments will be lower due to these repayment deductions. .

People claiming other benefits from the DWP may also qualify for a Budgeting Loan to help pay for essential items or services which they might otherwise struggle to afford due to their current circumstances. Before considering taking out either of these loans, it's recommended to check with your local council for financial assistance, or unclaimed support.

Those who have been claiming Income Support, Income-based Jobseeker's Allowance, Income-related Employment and Support Allowance or Pension Credit for at least six months may be eligible for the loan, which is repaid through deductions from their benefits. For older claimants who have transitioned from Universal Credit to Pension Credit, the DWP will add the time they were receiving Universal Credit to the six months.

Easy-to-understand online guidance has been published to potentially help more people access the service. This simplifies the process, including eligibility, what it can be used for, and how it is paid back to the DWP, reports the Daily Record.

Budgeting Loans broken down

A Budgeting Loan is a financial aid provided by the Department for Work and Pensions (DWP) to individuals who have been claiming certain benefits for at least six months. However, it's crucial to remember that this is a loan and must be repaid through benefit payments.

Those currently receiving Universal Credit are ineligible for a Budgeting Loan but can apply for a Budgeting Advance instead. The loan is designed to help cover the cost of essential items or services.

The minimum loan amount is £100, with the maximum varying based on individual circumstances. Repayment of the loan is made directly to the DWP at 0% interest within two years.

The repayment amount is determined by your total income, including any benefits you receive and what you can afford. If you cease receiving benefits, the remaining loan balance must still be repaid.

If approved for a loan, the DWP will inform you of your weekly repayments from your benefits, which will commence immediately upon acceptance.

What can a Budgeting Loan be used for?

The loan is to help pay for essential things or services.

This might include:

• Furniture in your home
• Household white goods such as a washing machine, cooker, hoover or fridge
• Clothing or footwear
• Rent you have to pay in advance
• Any moving house costs such as a removal van
• Essential work needed on your home, including maintenance
• Security for your home, such as new keys or locks
• Some travelling costs in the UK
• Things that will help you get a new job, such as a suit for interviews or taxi fares to get to an interview
• Costs due to pregnancy and childbirth
• Costs for a funeral

Applying for a Budgeting Loan could be made easier and faster by doing it online. According to the Department for Work and Pensions (DWP) guidance, "You will get a quicker decision on your Budgeting Loan by applying online."

After you have submitted your application, the DWP will notify you of their decision through email, text, or letter, based on the method you chose during the application process.

If you opt for electronic communication, expect a response within seven days; if by post, it could take up to 21 days to receive a decision. Should you be eligible for the loan, you'll need to formally accept the offer.

The acceptance method varies depending on your initial application medium. Once accepted, the specific details about receiving your funds will be communicated.

For those who provided a mobile number, a text message will confirm when the money is deposited. Further information on postal applications and appeals can be found on the GOV.UK website.