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<p>The Department has taken a number of steps to ensure that advances meet the needs
of claimants and that the recovery arrangements are personalised and reasonable.</p><p>
</p><p>Affordability is managed by ensuring the recovery rate for these advances will
not be more than the equivalent of 40 per cent of the claimant’s standard allowance.
The claimant is given the choice over the repayment period and it is explained to
them exactly how much will be deducted each month depending on the option they choose.
If the claimant is making the advance application online, these options are clearly
displayed on screen for them to choose from.</p><p> </p><p>If during the recovery
of an advance the claimant experiences an unforeseen expense that would cause them
or their family genuine hardship if they were required to continue to repay the advance,
then they can be offered a deferral period of the repayment of the advance of up to
3 months for a new claim, benefit transfer or change of circumstance advance and up
to 6 months for a budgeting advance.</p><p> </p><p>The Department has also announced
that from October 2019 the maximum rate of deductions from a claimant’s standard allowance
will be reduced from 40 per cent to 30 per cent and from October 2021 we will be increasing
the recovery period for advances from 12 to 16 months, further supporting those in
financial need. This is in addition to having previously increasing the amount a claimant
could receive as an advance payment from 50 per cent to 100 per cent of their indicative
award.</p>
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