Social fund

Budgeting Loans are interest-free, repayable loans and are part of the discretionary Social Fund.

To get a Budgeting Loan you must be on one od these “qualifying benefits":

• Income Support
• income-based Jobseeker’s Allowance
• income-related Employment and Support Allowance
• Pension Credit (both the guarantee credit and the savings credit).

You (or your partner, if you have one) must have been getting benefit for at least 26 weeks. Breaks of 28 days or less are ignored.

Your claim must be for something that falls into one of the following fixed categories:

• furniture and household equipment,
• clothing and footwear,
• rent in advance,
• removal expenses to secure fresh accommodation,
• the improvement, maintenance and security of your home,
• travelling expenses,
• expenses associated with seeking or re-entering work, or
• hire purchase and other debts for the items listed above.

This list is reproduced in the Budgeting Loans claim form (PDF, 160Kb). All of the items are regarded as having equal priority.

How much?

The Department for Work and Pensions (DWP) will consider your application and give it a weighting. This helps them to work out how much they should lend you. The weighting will take into account your circumstances, for example, whether you're single, part of a couple or a family with children.

There is a maximum loan of £1,500 and a minimum loan of £100. How much you get will be affected by what is available in the budget, and also by how much you've already borrowed. You're not allowed to owe more than £1,500 in total to the Social Fund.

You may be refused a Budgeting Loan if the DWP thinks that you're unlikely to be able to repay it. This could be because you already have continuing financial commitments such as debts, maintenance and court fines.

Capital

The amount of capital (for example savings) that you have will affect the amount that you can be paid. Your payment will be reduced pound-for-pound if you have capital of more than £1,000 if you're under 60, and £2,000 if you're over 60.

Repayment

You normally have to repay a Budgeting Loan over a period of two years. Payment is taken from your Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance or Pension Credit. If you stop getting these, loans can be recovered from other benefits or you'll have to negotiate with the DWP.

You may get more than one offer of a Budgeting Loan. You may be offered, for example, one with a higher repayment rate that will clear more quickly and one with a lower repayment rate that will run for a longer time. If you're having problems with the repayments, you can ask for them to be rescheduled over a longer period. You'll need to discuss this with the DWP.

If you're having problems or you're not sure what to do you can seek independent help and advice.

If you disagree with the decision

If you disagree with the decision you don't have a right of appeal, but there is a system of review. You should seek a review of your claim within 28 days. This process doesn't apply to the repayment period of a Budgeting Loan. You'll need to discuss this directly with the DWP. For more information, see Challenging decisions on the Discretionary Social Fund page.

The official online source of government information on benefits is Directgov.