DWP quietly introduces new rule for people who claim Universal Credit to follow

The Department for Work and Pensions (DWP) is quietly introducing a new rule for people who claim Universal Credit to follow. Universal Credit claimants will get more time to repay 'Budgeting Advance' loans from the DWP, it has emerged.

These interest-free loans are available if you're claiming Universal Credit and need funds for an emergency, such as replacing a broken cooker. You pay them back through your regular Universal Credit payments – you get paid less until the loan is repaid. Currently, you have 12 months to repay the loan.

But, for new budgeting advances taken out from December 2024, the default repayment period will be extended to 24 months. Unfortunately, you won't be able to extend an existing budgeting advance – any existing loans taken out before the change has come into effect will still have to be repaid within 12 months.

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Money Saving Expert explained in a post on its website: "The Department for Work and Pensions, which is responsible for Universal Credit, told us the change is being implemented from December because it needs to make changes to its systems to enable it."

You might be able to get a loan as part of your Universal Credit if you need to cover a specific expense - this is called a 'budgeting advance'. If you get a budgeting advance, you'll get reduced Universal Credit payments until you've paid off the amount you borrow. This will normally be over 24 months if you requested the advance on or after 4 December 2024. If you requested the advance before that, it will normally be paid over 12 months.

You'll also need to have earned less than £2,600 in the 6 months before your application. This figure is £3,600 if you live with a partner. You can't get a budgeting advance if you or your partner is still paying off a previous budgeting advance.