DWP confirms rule change for almost one million people on Universal Credit

The Department for Work and Pensions (DWP) has announced a rule change that it says will affect around one million people on Universal Credit.

Chancellor Jeremy Hunt first addressed the change as he delivered his Spring Budget statement in the House of Commons on Wednesday. The DWP has now issued further information on the change, which it says will see claimants keep hold of more of their benefits.

The move relates to budgeting advance loans, which are emergency loans for people on Universal Credit. They can be taken out when claimants need money for large expenses, such as house repairs or a new appliance.

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The money is paid back monthly from the claimant's benefit payments. The repayment window for the loans is currently 12 months, but the government has confirmed that it will be extended to 24 months from the end of this year.

The DWP said the move would reduce monthly repayments, making the loans more affordable for those who need them. Explaining the change, the DWP said: "To support households from falling into debt the government is taking decisive action to ensure claimants retain more of the money they receive from Universal Credit.

"Almost one million households on Universal Credit take out budgeting advance loans. These provide families with a vital source of funds to purchase one-off items like fridges and other expensive items. To help make these repayments more affordable we will be increasing the repayment period for new loans from 12 months to 24 months."

According to the government's Spring Budget,