How universal credit is paid

Universal credit is paid every calendar month, in arrears. The Department for Work and Pensions (DWP) has the power to pay certain claimants more frequently. [1]

Payments are made directly into a claimant's bank or other account, including a current account with a credit union. [2] In limited circumstances where a person cannot use mainstream accounts, she/he can ask for a Simple Payment - an account which enables money to be picked up from PayPoint outlets. [3] People who made claims on or after 1 February 2018 will use HM Government Payment Service instead. This is a similar service but claimants need to withdraw all payments within 30 days of receipt. Claimants already using Simple Payment will be moved by 20 March 2018 and this may involve issue of a new card. [4]

In Scotland claimants can request to be paid twice a month. [5]

Part or all of a claimant's universal credit entitlement can be paid to a third party (eg a landlord). Where this is made to a landlord, it is known as a 'managed payment to landlord' or 'MPTL'. An MPTL is one type of 'alternative payment arrangement' (APA) in which universal credit is paid in a different way to usual. Other types of APA are 'split payments' in which universal credit is split between both partners in a claim and 'more frequent payments' than monthly. An APA can be arranged at the discretion of the DWP to protect the interests of: [6]

• the claimant

• the claimant's partner

• a child or qualifying young person for whom the claimant or her/his partner is responsibly

• a severely disabled person for whom the claimant has significant caring responsibilities.

DWP have issued guidance on the factors which will be considered when a claimant requests an APA. [7] Some social landlords are 'trusted partners' of the DWP. They will be able to request managed payments online and will not be required to provide the same level of evidence as other applicants.

The Government has said that where a private sector housing benefit tenant moves on to universal credit, DWP will check whether and if so why s/he previously had her/his housing benefit paid direct to the landlord to 'ensure that those who need the support get it from the outset'. In addition, where a private landlord supplies evidence of two months' rent arrears, a managed payment will be implemented without the claimant's consent. [8]

Until 14 February 2018, new claimants faced a waiting period of seven days from claiming before their entitlement started. [9] This requirement to wait seven days has now been abolished. [10] Entitlement will start on the first day of application.

Applicants in financial need due to the delay in the payment of universal credit may be entitled to a universal credit advance. [11] This could be the case where a delay in payment would lead to rent arrears. A universal credit advance is a recoverable advance payment of universal credit and can be up to 100 per cent of expected entitlement. [12] No interest is payable when repaying the advance. An advance will only be awarded where the DWP believes the claimant can afford to make the repayments.

From July 2018 a claimant can request an advance payment online. Previously claimants had to call a service centre to claim an advance.

For advance claims made before January 2018, the amount will be recovered over a maximum six or 12 month period, depending on the whether the advance payment claim was made in connection with a new application for universal credit, a transfer from other benefits or a change in circumstances. [13] DWP have stated that the maximum period of repayment of all advance claims made in January 2018 and after will be 12 months. [14] Repayments begin from when the claimant receives her/his next payment of universal credit, although an applicant can ask for a delay of up to three months to be applied. [15]

There is no right to an appeal against a decision not to award an advance of universal credit. A claimant can ask for the decision to be reconsidered but should do so as soon as possible after being notified of the refusal (ideally at the same time). Otherwise the only way to challenge a refusal would be through judicial review.