The aim of a New Claim Advance is to support claimants who can’t manage until they receive their first payment of Universal Credit. Claimants must be made aware that advances are available to them if they are in financial need. If a claimant has transferred to Universal Credit from a qualifying benefit within one calendar month, they must be offered a Benefit Transfer Advance not a New Claim Advance.

To establish if the claimant and their partner (if they have one) have a financial need and require an Advance, they must be asked if they have enough money to live on until the first payment of Universal Credit is due. This might be money from savings, earnings, redundancy payments or support from the claimant or partner’s parents, family or friends. If the answer is no, an Advance must be offered.

A claimant is not required to have signed their Claimant Commitment before they can get an Advance, but they must:
• have attended a face-to-face interview, or for claimants who are unable to attend the office - had a home visit appointment before they can apply for
an Advance
• be unable to manage until their next payment of Universal Credit (financial need)
• have likely entitlement to Universal Credit (their ID must have been verified and there must be no doubt that the Habitual Residence Test will be satisfied)
• have the ability and agree to repay the advance.

For joint claims, both claimants must satisfy these conditions - but the claimant making the Advance request has to confirm only that their partner knows and agrees to the Advance request.

If a claimant meets the conditions for a new claim advance, they have the choice to claim it online. If an advance is awarded, it will be recorded in the advances page and in Claimant History. A claimant history note must be recorded where an offer for a New Claim Advance has been made. If a claimant refuses the offer, this must also be recorded in Claimant history.
It is still essential that claimants are offered an Advance and that it is processed at the first point of contact, usually at the Initial Evidence Interview.

Claimant has received Advances previously

A claimant must be actually entitled to Universal Credit or likely to be entitled before an Advance payment can be made.
If a claimant has been awarded an Advance payment for a previous claim, but there is evidence of those past claims to Universal Credit not then progressing to the payment stage - this throws doubt on whether any further Advance payments can be made and further evidence can be requested before an Advance is awarded.

Timescales

The claimant must be asked during their initial interview whether they have enough money to live on until their first payment of Universal Credit.
This must be followed by checking that the claimant understands that this means any final earnings, redundancy payments or savings, or whether they live with friends or relatives.
If at that point the claimant considers that they do not need an Advance, they may then ask for an Advance at any point during their first assessment period.

Amounts

The claimant must be informed of the maximum amount they are entitled to. This will be the lower of:
• 360% of their standard allowance
• the equivalent of their maximum Universal Credit award (including additional amounts)
• 24 x 25% of their standard allowance

The maximum amount is the total of the following if they are applicable, any:
• Standard Allowance
• Child element and Disabled Child Addition*
• childcare costs
• Universal Credit awarded for having Limited Capability for Work or Limited Capability for Work and Work-Related Activity
• Universal Credit awarded for being a carer
• housing costs

This total sum is the ‘maximum amount’ for the benefit unit.
* The maximum amount for the Advance will only include the child additions for those
children that have been verified. A claimant can apply for an increase of the Advance
if the child is verified in the first assessment period

By exception, a claimant may initially request an amount of Advance that is lower than the maximum amount available to them and then subsequently decide that they need the remainder. In these cases, it is possible to pay them the remainder of the first Advance (as an additional Advance) provided that the total amount they receive remains within the maximum entitlement of their first Advance. As the remainder is part of the original Advance available to them - financial need does not need to be established again.

Recovery

The recovery period increased from 12 to 24 months for advances taken in the first assessment period from 12th April 2021. The Advance is recovered over a maximum of 24 months by deductions from a claimant’s monthly Universal Credit Standard Allowance in equal amounts over 24 equal instalments, starting from the first month’s award. However, the Universal Credit Service can’t commit to 24 instalments of equal deductions as there may be months when the claimant doesn't have enough Universal Credit to cover the instalment (for example, due to an increase in earnings).
The Universal Credit Service will calculate what can be deducted every month (up to a maximum) until the Advance has been recovered. The claimant must be informed that they have 24 months to repay the Advance (the maximum period).

During the recovery of the Advance, exceptional circumstances may occur that were not foreseen when the Advance was first taken out (for example, a child going into hospital which results in unexpected and regular bus or taxi fares for the parents to visit). If these circumstances push the claimant into genuine hardship and cause difficulty repaying the Advance over the agreed recovery time, a maximum 3-month deferral can be considered. Full recovery must be made within 27 months.

Whilst joint claimants have joint liability for an Advance, only the claimant requesting the Advance has to confirm that their partner has agreed to the Advance request and recovery terms. If the couple subsequently separate, the recovery of the Advance will be taken from both of them on a 50/50 basis. If an Advance is requested and at that time a member of the joint claim is an ineligible partner, the ineligible partner has no responsibility for half of the outstanding debt.

A claimant may want to repay the Advance in a lump sum. In these circumstances they should be asked to ring the Debt Management phone line 0800 916 0647. When a claimant become insolvent, recovery must be suspended.

Payment