Dealing with debt and rent arrears on universal credit

If you’re on universal credit or you’ve applied for it and you’re struggling to manage your debts or you’ve fallen behind with your rent, there are steps you can take that may help you get back on track.

Dealing with debt if you’ve just applied for universal credit

When you apply for universal credit, it usually takes about five weeks to receive your first payment.

If you have a debt payment you can’t afford due in that time, contact the creditor you owe money to and ask them if they’ll accept a late payment.

It’s also a good idea to ask them if they’ll freeze interest on your debts until you get your first universal credit payment.

Can’t afford rent while waiting for universal credit?

If you don’t have enough money to cover your rent while you’re waiting for your first universal credit payment, you can apply for an advance.

To get an advance you have to be in financial hardship. This means being in a position where you can’t afford essentials like food or rent.

Advance payments are loans that need to be paid back. The money will be taken back through monthly deductions from your universal credit. Your work coach will be able to tell you how much will be deducted each month.

To apply for an advance, you must have had your first universal credit interview. You can then:

ask your work coach for an advance at that interview
apply for an advance through your online account
call the universal credit helpline

helpline

phone: 0800 328 5644   phone (Welsh language): 0800 328 1744   textphone: 0800 328 1344
relay UK: if you can't hear or speak on the phone, you can type what you want to say on 18001 then 0800 328 5644
video relay: if you use British Sign Language (BSL). You can find out how to use video relay on YouTube.

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Ask for your universal credit to be paid in a different way

In certain circumstances, you can ask for your universal credit to be paid differently if you think it will help you manage your money better. These are called alternative payment arrangements.

You might be able to get an alternative payment arrangement if you:

are in debt or rent arrears
are homeless or at risk of homelessness
are in temporary or supported accommodation
have a disability or learning difficulty
have experienced domestic violence
have an addiction
are 16 or 17 or a care leaver

You can ask:

to get two universal credit payments a month instead of one
for your housing costs to be paid straight to your landlord
for separate universal credit payments from your partner

If you’re applying for universal credit, you should ask for the arrangement you’d like at your interview.

If you’re already getting universal credit, call the universal credit helpline.

Debt advice for rent arrears

If you’re behind with your rent, you should get debt advice as soon as possible as your landlord may try to evict you if you owe a large sum of money.

Our debt advice is free and available online or over the phone. We’ll run through your finances, tell you about the range of help available and recommend a suitable way forward.

graphic of house with calculator and coins

Deductions from universal credit for rent arrears

When you’re behind with your rent, your landlord can ask for some of your universal credit to be paid directly to them. You’ll need to keep making your usual rent payments and the deductions from your universal credit will go towards paying off your arrears.

If the deductions mean your universal credit payments don’t cover your essential living costs, call the universal credit helpline. They may reduce the amount given to your landlord towards rent arrears each month. It’s a good idea to speak to your landlord before doing this.

woman with shopping cart thinking about bills

Discretionary housing payments for rent arrears

If you have rent arrears and your housing costs are covered by universal credit, you may also be eligible for a discretionary housing payment (DHP).

DHPs are designed to help with rent or housing costs. You can apply for one if you get either:

the housing element of universal credit
housing benefit

Apply through your local council. They’ll decide whether to give you a DHP, how much you’ll get and how long you’ll get the payment for. You don’t need to pay DHPs back.