The Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013

Application by qualifying lenders of any amount which exceeds liability

7.—(1) This paragraph applies where, in respect of a relevant claimant—

(a) any direct payment is made under paragraph 3 to a qualifying lender; and

(b) the amount paid exceeds the amount of the loan interest payments payable.

(2) Unless sub-paragraph (3) applies, the qualifying lender must apply the amount of the excess as follows—

(a) first, towards discharging the amount of any liability of the relevant claimant for arrears of loan interest payments in respect of the loan in question; and

(b) if any amount of the excess is then remaining, towards discharging any liability of the relevant claimant to repay—

(i) the principal sum in respect of the loan, or

(ii) any other sum payable by the relevant claimant to that lender in respect of the loan.

(3) Where loan interest payments on two or more loans are payable to the same qualifying lender, the lender must apply the amount of the excess as follows—

(a) first, towards discharging the amount of any liability of the relevant claimant for arrears of loan interest payments in respect of the loan in respect of which the excess amount was paid; and

(b) if any amount of the excess is then remaining, towards discharging any liability of the relevant claimant to repay—

(i) in respect of the loan referred to in paragraph (a), the principal sum or any other sum payable by the relevant claimant to that lender, or

(ii) in respect of any other loan, any sum payable by the relevant claimant to that lender where the liability to pay that sum has not already discharged under this Schedule.