Do you struggle to budget with Universal Credit paid once per month?
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It is standard for Universal Credit to be paid in one monthly payment with housing costs being paid to the claimant, for them to arrange payment of their rent themselves. In Northern Ireland, claimants are paid twice monthly automatically. In Scotland, claimants are asked if they would prefer once or twice monthly payment and if they would prefer UC to pay their housing costs to their landlord. |
What are alternative payment arrangements?
Universal Credit has additional measures that can be put in place if a claimant is identified as needing additional support.
When can you ask for an alternative payment arrangement?
For the majority of people, Universal Credit will be paid as a single monthly payment, which the government and Universal Credit believe will encourage personal responsibility for finances and encourage claimants to budget their money on a monthly basis and this will enable them to make a smooth transition into monthly paid work.
They say that Alternative Payment Arrangements should only be considered for those claimants who cannot manage the single monthly payment and as a result there is a risk of financial harm to the claimant and/or their family. Universal Credit will consider a number of factors and evidence provided to decide if an Alternative Payment Arrangement is appropriate.
You can request alternative payment arrangement with your work coach at a regular meeting or by calling the service centre on 08003285644.
WARNING - Sometimes your request will have to go to a decision maker and this is a payment blocker. No payments will be made to you while this is being looked at and can take some time. For that reason, we only recommend making the request immediately after receiving a payment.
What information will UC consider when deciding if an Alternative Payment Arrangement should be allowed?
Universal Credit say that a decision should be decided on a case by case basis, based on individual circumstances.
They will take into account a number of factors for example -
If you feel that you meet any of the tier 1 or tier 2 factors then it is really important that you let the person you speak to know this and if you can, it can help to evidence this.
Universal Credit has additional measures that can be put in place if a claimant is identified as needing additional support.
- Paying the housing element of Universal Credit as a Managed Payment direct to the landlord
- More frequent than monthly payments
- A Split Payment of an award between partners
When can you ask for an alternative payment arrangement?
For the majority of people, Universal Credit will be paid as a single monthly payment, which the government and Universal Credit believe will encourage personal responsibility for finances and encourage claimants to budget their money on a monthly basis and this will enable them to make a smooth transition into monthly paid work.
They say that Alternative Payment Arrangements should only be considered for those claimants who cannot manage the single monthly payment and as a result there is a risk of financial harm to the claimant and/or their family. Universal Credit will consider a number of factors and evidence provided to decide if an Alternative Payment Arrangement is appropriate.
You can request alternative payment arrangement with your work coach at a regular meeting or by calling the service centre on 08003285644.
WARNING - Sometimes your request will have to go to a decision maker and this is a payment blocker. No payments will be made to you while this is being looked at and can take some time. For that reason, we only recommend making the request immediately after receiving a payment.
What information will UC consider when deciding if an Alternative Payment Arrangement should be allowed?
Universal Credit say that a decision should be decided on a case by case basis, based on individual circumstances.
They will take into account a number of factors for example -
- Are you managing to pay your bills on time, particularly your rent, and have you fallen into arrears in the past, or are you currently in arrears?
- Do you think you will be able to manage a monthly budget, taking account of your income and outgoings over a calendar month?
- If you are part of a couple, are you used to managing their money together and do you think you will be able to manage the single Universal Credit payment to the household?
If you feel that you meet any of the tier 1 or tier 2 factors then it is really important that you let the person you speak to know this and if you can, it can help to evidence this.
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Tier One factors – Highly likely/probable need for Alternative Payment Arrangements
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Tier Two factors – Less likely/possible need for Alternative Payment Arrangements
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So how will Universal Credit help you manage?
Alternative Payment Arrangements will be considered in the following order of priority:
If you meet the criteria for either option (2) or (3) above, your housing costs should be paid direct to your landlord, with the remaining Universal Credit paid as appropriate.
In summary a claimant could therefore have any of the following combinations:
Members have said though, more frequent payments have been agreed with no arrangements made for rent to be paid direct. This is something you should discuss with UC.
So how does more frequent payments actually work?
Universal Credit do have the ability to make payments twice monthly or four times per month, in certain circumstances.
This does not mean that you get part of your payment before payment date.
You will still have to wait for your assessment period to end and then on payment date they will pay you either 50% or 25% of your payment, withholding the rest until later in the month.
Your payment breakdown will still appear as one payment assessed in the normal way.
If you paid twice monthly then you will receive 50% on usual payment date and then the other 50%, 14 to 17 days later.
If you are paid four times per month, then you will receive 25% of your payment on usual payment date and then there will be three further payments made every 7 to 10 days.
You need to really really carefully think how you would manage if you only received 25% or 50% of your payment on usual payment date. Would you have bills to pay and food to buy? Would only have a partial payment mean that you fall into arrears with your bills?
Alternative Payment Arrangements will be considered in the following order of priority:
- Paying the Universal Credit housing element to the landlord will be the first priority where it is part of the Universal Credit award, in order to safeguard the claimant’s home. The Managed Payment of the housing costs element to the landlord would always be deducted and paid first as the priority APA.
- Secondly, and where appropriate, the Universal Credit Agent should consider if a More Frequent Payment is needed.
- Thirdly, the Split Payment of an award between partners should only be considered in certain circumstances, for example:
- financial abuse where one partner mismanages the Universal Credit payment - where domestic violence is an issue and the couple decide to remain together in the same household, but only one claim to Universal Credit is made
If you meet the criteria for either option (2) or (3) above, your housing costs should be paid direct to your landlord, with the remaining Universal Credit paid as appropriate.
In summary a claimant could therefore have any of the following combinations:
- Housing element paid direct to landlord only
- More Frequent Payments only (for non-householders)
- Split Payment only
- Housing element paid direct to landlord and More Frequent Payments
- Housing element paid direct to landlord and Split Payments
- More Frequent Payments and Split Payments (for non-householder couples where appropriate)
- Housing element paid direct to landlord, More Frequent Payments and Split Payments
Members have said though, more frequent payments have been agreed with no arrangements made for rent to be paid direct. This is something you should discuss with UC.
So how does more frequent payments actually work?
Universal Credit do have the ability to make payments twice monthly or four times per month, in certain circumstances.
This does not mean that you get part of your payment before payment date.
You will still have to wait for your assessment period to end and then on payment date they will pay you either 50% or 25% of your payment, withholding the rest until later in the month.
Your payment breakdown will still appear as one payment assessed in the normal way.
If you paid twice monthly then you will receive 50% on usual payment date and then the other 50%, 14 to 17 days later.
If you are paid four times per month, then you will receive 25% of your payment on usual payment date and then there will be three further payments made every 7 to 10 days.
You need to really really carefully think how you would manage if you only received 25% or 50% of your payment on usual payment date. Would you have bills to pay and food to buy? Would only have a partial payment mean that you fall into arrears with your bills?
What is a split payment?
When it is deemed appropriate, a Universal Credit payment can be split and paid into two different bank accounts., with the larger percentage allocated to the person with primary caring responsibilities ie the one with child care. This is to ensure the health and well-being of the majority of the household.
Split Payments are to prevent hardship to the claimant and their family and should only be considered in certain specific situations eg domestic violence or where financial abuse occurs and one partner mismanages the Universal Credit payment.
Split Payments are normally considered to prevent hardship to the claimant and their family, for example if the Universal Credit claimant is not managing their financial affairs and not meeting their family’s day to day needs.
Split Payments should be considered when:
When does managed payment to landlord happen?
Universal Credit normally pay the housing costs to you but if it appears that you may have difficulty with making your rent payment then UC may decide to pay your housing costs direct on your behalf.
A landlord can also request managed payment themself if there is a build up of rent arrears.
Why am I being offered budgeting support and what is it?
As a government agency, DWP have a duty to support claimants who are struggling financially. If Universal Credit think you could benefit from support on how to manage your money then they may make you an appointment at the job centre to discuss what steps you can take so you can have more responsibility for your money.
They may offer this instead of, or in addition to alternative payment arrangement.
Different levels and types of money advice are offered based on the claimants needs:
The personal budgeting support is not compulsory, but if it is offered and you decline then it is very unlikely you will be granted an alternative payment arrangement.
Read more about Managed Payment to Landlord...
When it is deemed appropriate, a Universal Credit payment can be split and paid into two different bank accounts., with the larger percentage allocated to the person with primary caring responsibilities ie the one with child care. This is to ensure the health and well-being of the majority of the household.
Split Payments are to prevent hardship to the claimant and their family and should only be considered in certain specific situations eg domestic violence or where financial abuse occurs and one partner mismanages the Universal Credit payment.
Split Payments are normally considered to prevent hardship to the claimant and their family, for example if the Universal Credit claimant is not managing their financial affairs and not meeting their family’s day to day needs.
Split Payments should be considered when:
- the claimant notifies DWP of financial mismanagement and/or financial abuse
- the claimant notifies DWP that there are domestic violence issues
- the claimant cannot or will not budget for their own or their family’s basic day to day needs
When does managed payment to landlord happen?
Universal Credit normally pay the housing costs to you but if it appears that you may have difficulty with making your rent payment then UC may decide to pay your housing costs direct on your behalf.
A landlord can also request managed payment themself if there is a build up of rent arrears.
Why am I being offered budgeting support and what is it?
As a government agency, DWP have a duty to support claimants who are struggling financially. If Universal Credit think you could benefit from support on how to manage your money then they may make you an appointment at the job centre to discuss what steps you can take so you can have more responsibility for your money.
They may offer this instead of, or in addition to alternative payment arrangement.
Different levels and types of money advice are offered based on the claimants needs:
- some claimants will be signposted to online services, such as those offered by Citizens Advice, Money Advice Service or Money Saving Expert
- some claimants will be signposted to online services available on GOV.UK using the Online Budgeting Support - Money Manager tool offered by the Money Advice Service
- some will be offered single or multiple money advice session(s) over the phone
- others will be offered more intensive face to face money advice sessions with the potential for follow up call(s), if required
The personal budgeting support is not compulsory, but if it is offered and you decline then it is very unlikely you will be granted an alternative payment arrangement.
Read more about Managed Payment to Landlord...
more info on long term Health condition or disability
- You can be assessed by UC to see if your health condition affects your ability to work - find out what happens,
- What to do if you don't agree with the decision on your capability to work
- Do you need your rent paid direct to your landlord? - read why we don't recommend it
Basic info and new claims
Working and Earning on UC
Claimant Commitment
