Those claiming Universal Credit and feeling the pinch in January can apply for an advance of up to £812.

This is a “budget advance” and can be used to cover emergency household expenses.

However, it is not free money and will need to be paid back, usually through discounts on future Universal Credit payments.

Still, some will consider it a safer option than expensive payday loans and other forms of borrowing.

The mirror helped explain how a budget advance works, who is eligible and how you can apply.

How much can I borrow through a budget advance?

The smallest amount you can get is £100 – the highest being £812 if you have children.

The maximum amount varies depending on your personal situation, you can get up to:

How much you can get depends on whether you can repay the loan and whether you have savings of over £1,000.

The amount you can borrow is reduced by £1 for every £1 you have in savings over the £1,000 threshold.

Am I entitled to a budget advance?

You must meet certain criteria to receive a budget advance – which means not everyone on Universal Credit will be accepted for one.

To be eligible for financial assistance, you must have received one of the following benefits for six months or more:

• Universal Credit
• Employment and Income Support Benefit
• Income support
• Income-related jobseeker’s allowance
• State pension credit

These criteria will not apply if you need the money to help you start a new job or maintain an existing one.

You must also have earned less than £2,600 (£3,600 jointly for couples) in the past six months and have repaid all previous budget advances before you can be accepted for payment.

How do I repay my budget advance?

You’ll have to repay your budget advance through your future Universal Credit payments, but you won’t be charged interest on the loan.

The first deduction is made on the day you receive your next payment after being accepted for the loan and the full amount must be repaid within 12 months.

If you stop applying for Universal Credit, you will still have to repay your budget advance.

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Payments will either have to come from your salary, if you are currently working, or from other benefits you may have.

If you don’t make payment arrangements, the DWP can contact your employer to collect what you owe.

The DWP may also contact a debt collection agency to collect any outstanding payments – so keep this in mind before requesting a budget advance.

How do I request a budget advance?

If you are having difficulty and need a budget advance, you will need to make a request to your Jobcentre work coach.

They should explain how much you can borrow and how much you will have to repay each month.

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