Around 1 in 2 (44%) of Universal Credit claimants have a deduction to repay an Advance Payment, Employment Minister Alok Sharma has revealed.
In responding to a parliamentary question on 11 June, the Minister said:
“Universal Credit (UC) new claim advances provide access to a payment for those in financial need, which can be accessed on the same day, until their first UC payment is due. Claimants can access up to 100% of the total expected monthly award, for which they can pay back over a period of up to 12 months.
The Department has taken a number of steps to ensure that advances meet the needs of claimants and that recovery arrangements are personalised and reasonable. From October 2019 we are reducing the maximum rate of deductions to 30 per cent and from October 2021 we are increasing the maximum recovery period for advances from 12 to 16 months.
The latest available data is for eligible claims to UC Full Service that are due a payment in February 2019. Of these claims 44% had a deduction to repay a UC advance.
[Data has been sourced from UC Full Service].”
Mr. Sharma’s admission comes after the publication last week of a new joint report from StepChange Debt Charity and the Trussell Trust shows that Advance Payments – the loans people can apply for while they wait at least five weeks for Universal Credit – push people into hardship and therefore are not the solution to the wait.
The Minister’s answer is available @ www.parliament.uk.org
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