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<p>Universal Credit new claim advances are made on account of a claimant’s expected
future Universal Credit entitlement. They are available to those who cannot wait until
their first Universal Credit payment is due, in order to provide extra financial support
for those who need it most. Because this payment is an advance of entitlement, this
is recovered over time.</p><p> </p><p>It was announced at Autumn Budget 2018 that
there would be an increase to the maximum recovery period for Universal Credit advances
from 12 to 16 months from October 2021.</p><p> </p><p>There is no minimum recovery
rate for Universal Credit advances. The rate deducted from a claimant’s Universal
Credit is generally determined by the amount of their entitlement advance divided
by the number of monthly assessment periods which they choose at the outset for the
advanced amount to be recovered from. This is subject to an overall maximum rate of
40 per cent of the claimant’s standard allowance. As a result of the change introduced
in the 2018 Autumn Budget, from October 2019 this maximum will reduce to 30 per cent
of the claimant’s standard allowance.</p><p>During the recovery of the advance, exceptional
circumstances may occur that were not foreseen when the advance was taken out. For
example, hospital visits resulting in unexpected and regular bus/taxi fares. If these
circumstances push the claimant into genuine hardship resulting in difficulty repaying
the advance over the agreed recovery time, a maximum 3-month deferral can be considered.</p>
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