Universal Credit: How advances on first payment work – amount you get a month reduces | Personal Finance

For those who need help with their living costs, such as due to being out of work or on a low income, it may be that they are able to claim Universal Credit. This payment, which is replacing Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), and Working Tax Credit, is paid monthly – although this may be different for some people who live in Scotland and Northern Ireland.

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Universal Credit is usually paid into the claimant’s bank, building society or credit union account, and the payment can include an amount for housing.

This amount will usually need to be paid to a person’s landlord.

It usually takes around five weeks for get the first payment.

This includes a four-week assessment period, as well as up to seven days for the payment to reach the account.

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With this no doubt being a lengthy time to be without financial support, it may be that Universal Credit claimants wish to apply for an advance in order to help with living costs while they wait for the first payment.

According to the government website, “the most you can get as an advance is the amount of your first estimated payment”.

However, Universal Credit claimants should be aware that this is a loan, and must be paid back.

A person starts paying it back out of their first payment.

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The claimant can choose how many months they pay the advance back over, but it must be paid back within 12 months.

Interest does not need to be paid on it, and Gov.uk says: “The total amount you pay back is the same”.

So, how does the advance affect a person’s first payment?

Gov.uk details an example of how this may affect a person.

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It uses the example of the first estimated payment being £251.77, with the applicant getting £251.77 as an advance.

Should the person choose to pay back their advance over the course of 12 months, this would work out at £20.98 per month.

As a consequence, the Universal Credit claimant would get £230.79 on their first payment date.

This means that their first payment may be £251.77, but the amount they actually receive is reduced.


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Gov.uk says: “This is your first payment minus the bit you’re repaying.”

In the example, it explains that this would be £251.77 minus £20.98 – which works out at £230.79.

A person can use a benefits calculator in order to estimate how much they can get.