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<p>The maximum amount a claimant can receive as a new claim advance payment is 100
per cent of their total indicative Universal Credit award. The claimant can decide
the length of repayment period when they request the advance. This can be up to a
maximum 12 months. The rate of repayment is decided by dividing the total advance
amount by the agreed repayment period.</p><p>Affordability is managed by ensuring
the recovery rate is not more than the equivalent of 40 per cent of the standard allowance
and help is available for those struggling to meet the recovery rate once recovery
begins. In many cases, because claimants choose to repay advances over many months,
advance repayments constitute less than 40% of a standard allowance. In exceptional
circumstances, recovery can be deferred for up to 3 months from the start of the recovery
period.</p><p>Advances are not loans; they are an interest free advance payment of
benefit, available to help people who need immediate financial support, which is then
recovered over an agreed period. 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.</p>
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