Some clients take a while to provide the relevant Universal Credit set up information. Others may not have achieved the ‘to do’ tasks in their on-line journal which means they they can’t complete the claim process.
When this happens they may be eligible to request an ‘advance payment’.
Such payments are helpful – in many cases essential – in allowing people to buy food and pay for everyday requirements. Some 30% of local UC first time claimants request an advance.
But advance payments can backfire and must be handled with care.
Some clients ask for too much and fail to set aside enough to pay the cost of housing which is part of large sum advances. A large advance can affect their ability to cope when they have to pay it back (and the first loan must be repaid within 12 months). Some don’t complete the UC application process but go on to ask for 2 or 3 or more advances.
At Citizens Advice we do all we can to discourage clients from over-borrowing in this way. In fact one of our key aims is to help them get the claim processed so the borrowing route is quickly closed.
Unfortunately there are clients who don’t notice the knock-on effect of a large advance until it’s too late.
For some, the repayment can be as much as £60 a month and, if they have other debts for example arising from county court judgements or credit cards, the combined effect can be catastrophic. In this predicament clients often need and will benefit from Personal Budgeting Support; this isn’t covered in the Universal Support: Help to Claim Project but is part of our normal service.
We’re working now on how to give the clearest and most consistent messages to clients about advance payments. They should do everything possible to clear the tasks in their online journal to-do list.
This will stop any risk of getting into a damaging advance payment and repayment cycle.