We are often asked what is the crisis loan replacement? and the cold hard truth is that there is nothing set up nationally to replace Crisis Loans
Since the Social Fund was disbanded in 2013 and the Government removed the discretionary loans provision that included Rent in Advance and Crisis loans there has been a sharp decline in the number of ways that people can access emergency help when they have no alternative means of support or income.
With the scrapping of the Crisis loan provision the government asked local authorities to offer an alternative in the form of the Local Welfare fund, whilst this was intended to be a safety net for vulnerable families it is not as accessible as the old loans system and can not be classed as being a crisis loan replacement as in most cases service users are asked to attend the Job Centre for a referral for Food Vouchers or a referral to the local food bank.
Nearly two years on and the crisis loan alternatives are clearly staining under the pressure to deliver emergency help with ever decreasing budgets that are no longer as well funded by central government and we have seen dozens of local authorities having to make the decision to totally withdraw support and rely solely on the voluntary and charitable sectors for support.
At present the only real crisis loan alternatives are:
Unfortunately there is no such thing as a Housing Benefit Loan, however, it is possible to get help with your housing benefit from a range of organizations.
Prior to 2013, it was possible to apply to the Social Fund for a Rent in Advance Loan, this was a loan that was delivered out of a discretionary pot of money administered by the Department - we are not affiliated with any organisation mentioned. for Work and Pensions ( DWP).
Typically a Housing Benefit Loan (Rent in the Advance loan) would be awarded to people who were on an income-related benefit like jobseekers allowance or income based Employment Support Allowance and would be issued on the day of application ( or within 48 hours) directly into the applicant’s nominated bank. The value of the award would vary, but would usually cover at least 1 months rent giving time awaiting Housing Benefit being processed and awarded.
Since the abolition of the Social Fund, People who want to apply for help with rent have been directed to their Local Authority who have been given a pot of money to allow them to deliver small short-term loans.
Find out more about Housing Benefit Loans
At present Housing Benefit applications are taking 3-4 weeks to process, however, we have seen cases of it taking up to 6 months!
We have listed the Local Authorities that we have identified as being able to provide a Housing Benefit Loan, or who will at least help with your first month’s payment when moving into a new property.
If you have previously applied to the Social Find for help with housing and your application has been successful, you will still have to repay any money that you borrowed even though the discretionary SF has been disbanded.
We would appreciate any feedback that you have in relation to Housing Benefit Loans and any other sources of funding that you may have found or that may be local to you that will help people cover rent arrears or the cost of moving into a new Home.
Crisis Loan is no longer available from the Jobcentre / Department - we are not affiliated with any organisation mentioned. for Work and Pensions ( DWP ) as the Social Fund was disbanded back in 2013, however it is still possible to apply for a Budgeting Loan and request a copy of the Budgeting Loan Application form by phone.
Calling Budgteing Loan
The application itself has not changed and you will still be expected to fill out an SF500 form detailing what you need the loan for and then accepting repayment terms assuming that your application is accepted.
To start the application off by telephone you will need to call Jobcentre Plus, they have several telephone numbers and you are able to make the initial application by telephone.
As of 1/1/2015, the latest budgeting loan telephone number is 0345 603 6967.
Need to speak to a member of the Depart for Work And Pensions about your issues? Our call connection phone numbers should be able to help – get in touch with the right department by dialling one of the contact numbers below.
Calls to the Social Fund on their direct number 0800 169 0140 are free from any BT landline (this include call/phone boxes) and also includes calls from most of the larger mobile phone networks.
In the United Kingdom it possible to get Benefit Loans and these come in two types:
A loan that is made to a Household that is limited to £870 per household per application ( multiple applications can be made, however, no one Household is able to Benefit Loans totalling more than £1500 at any one time)
Budgeting Loans are only paid to people who have been on an income-related benefit for more than 26 weeks and wh can show that the things that they are applying for help with ( the reason for the Benefit Loan) are essential and that they would not be able to find enough money, or obtain a bank loan to cover the cost.
They have recovered a pre-agreed percentage of the benefit that you are due and will run consecutively with any other Benefit Loans that you have to ensure that your repayment does not cause your further financial hardship.
Sort Term Benefits Advance (STBA Loans):
A small loan that can be made to people who have recently made an application to a means-tested benefit like income support, jobseekers allowance ( Income Based) or Employment Support Allowance ( Income Related) and who are awaiting the processing of their application and the first full payment period to pass ( Usually 2-4 weeks).
An STBA Loan is applied for over the telephone and a decision is given within 24-48 hours, and if successful payment is made into your nominated bank on the same day.
We have been considering ways that we can help people to get access to the Budgeting Loan system and have come up with a way to enable applications to be taken/completed online and then for the completed form to be posted out to the applicant with a pre-paid envelope so all that they need to do is sign and post it back the the correct Benefit Centre who will have already been sent an electronic form so that they can begin processing the application.
More information on the Budgeting Loan application
The idea is that we design a secure form with SSL that sends your completed application directly to the DWP by email, then we also send a paper application to you that is already completed based on the online form information with an envelope for your signature.
This way the DWP can start looking at you application on the same day- however as this will take a lot of work on our part, we have a couple of questions- and would like to ask that you take a few minutes to consider and reply below
Click here to find out more about the Budgeting Loan application process – as well as how to get your application started.
How to apply for a Budgeting Loan
Note that this loan only applies to the mainland UK and the islands around mainland UK. Northern Ireland has a different type of budgeting loan.
A budgeting loan is open to anyone who has claimed for the benefit for the whole of the last six months. “Benefit” means income support, income based Job Seeker’s Allowance, income-related Employment and Support Allowance, Pension Credit and Universal Credit with Pension Credit (you are not eligible for a Budgeting Loan if you claim for Universal Credit without claiming Pension Credit).
If you are involved in any industrial action or you owe more than 1,500 for a crisis loan or budget loan if you cannot claim for a budgeting loan. One alternative to a budgeting loan is a budgeting advance which it is worthwhile checking you are eligible for.
It will take 15 days for you to be either to be accepted or rejected for a loan. You should receive the money 12 days after the day of acceptance.
As well as applying online, you can print off form SF500 or pick one up from your local Jobseeker’s Plus. You can also ask for the form to be delivered to you, this may take up to 5 working days though. It could take up to 25 working days for a filled in printed form to be processed, so it is quicker to fill in a form online.
Can I still get a budgeting loan?
The smallest amount you can borrow is £100, the maximum amount is £348 if you are single, £464 if you have a partner and £812 if you or your partner are in receipt of child benefit. Whether you receive this money depends on whether it is felt you can pay this money back, whether you have savings of over £1000 (or £2000 if you or your partner are 65 or over) and whether you are still paying back a budgeting or crisis loan.
The good news about a budgeting loan is that it is interest-free. You are usually given 2 years in order to repay a loan. If your weekly benefit is £57.90 you will get a deduction of between £2.90 and 6.95. If your weekly benefit is up to £300 you will get a deduction of between £15 and £36. However, if you stop receiving the benefit you will have to come up with a different way to pay back the loan.
Before choosing a loan it is worth discussing matters with your Job Centre Plus. If you live in Wales you might choose to look into finding out the Discretionary Assistance Fund. If you live in Scotland you might look into a Community Care Grant or Crisis Loan. Unfortunately, English or Welsh people can no longer apply for a Crisis Loan.
Sign the petition, don’t let central Government cut what is often the only remaining lifeline for many families without being challenged.
Three-quarters of councils will scrap or shrink support for England’s most vulnerable people if the Government cuts funding next year, leaders claim.
The Local Government Association (LGA) today warned against plans to ditch the £347m Local Welfare Assistance fund, used by town halls to provide emergency support for people facing homelessness, care leavers and families struggling to put food on the table.
A poll suggests the loss of government funding would mean thousands could lose out on support including food vouchers, household essentials and short-term help paying the rent.
Some 15% of local authorities said they would have to completely scrap local welfare assistance schemes if funding was pulled.
Ministers have pledged to formally consult local authorities on the decision to discontinue funding from next April, which councils labeled an ‘important opportunity to reconsider’.
The funding was introduced in 2013 to replace government-provided crisis loans, with councils allocated cash from the £347m pot.
‘Taking away this money could prove counterproductive and risks storing up much bigger, and more costly problems in the longer run,’ said Cllr Claire Kober, chair of the LGA’s resources board.
‘Thousands of people have been helped through local welfare schemes, which have been far more effective at getting support to those most in need than the Government crisis loans scheme which it replaced.
‘Councils will be doing everything in their power to support those who need it most, but with less money and fewer resources to work with this is going to become increasingly difficult. For some local authorities, where budgets are already on the brink, they will have no choice but to close their local welfare assistance schemes down altogether,’ added Cllr Kober.
A Department - we are not affiliated with any organisation mentioned. for Work and Pensions spokesman said: ‘The changes made to the funding of local welfare provision were never about abolishing support and it’s a total misrepresentation to suggest they were. This Government has given councils more control because they understand best their local area’s needs – this is in contrast to the previous centralised grant system, which was inflexible and poorly targeted. We are now consulting on how funding should be provided for 2015/16.’
To make an application for a Budgeting Loan You will need to complete a Budgeting Loan form, this form is called an SF500 and can be either downloaded from the DWP website or from our own site here: click here to download the SF500 form.
The application for a budgeting loan is 9 pages long and you will need to complete the entire form to be considered for a budgeting loan. Once you have completed the form you will need to ensure that you sign it and date it before sending it back to the Benefit centre that manages your area, alternatively, you can drop it off at the jobcentre who will post the form to the section dealing with loans for your area via internal mail.
This is an advice site that also offers call forwarding options, and we are in no way affiliated with the Department - we are not affiliated with any organisation mentioned. for Work & Pensions, Budgeting Loans, or any other organisation mentioned on this website.
The entire process takes around 30 days from you posting the form to your application being decided and payment is issued if you are accepted for a loan and there is enough money left in the Budget.
Here are our top 5 tips for making that application process go as smoothly as possible.
- Complete the form as fully as possible
- Make sure that the form is readable
- Apply for permitted items
- Post your application back via 1st class post
- call to ensure that your budgeting loan form has been received
Filling in form SF500 for a Budgeting Loan
Before you apply, make sure you have all the information you will need to hand. You will need to provide information about your income, partner (if you have one), benefits, regular expenses, dependents, and any savings you have. You will also need to declare the reason for your application to ensure that you are eligible for a budgeting loan.
Once you have completed and signed the form, you will need to drop it into your nearest Jobcentre Plus office or post it to the benefits centre managing your area. You will then be contacted when a decision has been made.
Who can apply for a budgeting loan?
If you are receiving certain benefits and need money to cover certain urgent expenses such as job seeking costs, funeral expenses, securing accommodation, or essential furniture, you may be entitled to apply for a budgeting loan for the Government to help you cover this cost.
How much can I borrow with a budgeting loan?
A budgeting loan is interest-free and depending on your circumstances you could borrow up to £812. To apply, you will need to download, print out and fill in a budgeting loan form (SF500).
Short Term Benefit Advance Loans are the replacement for the old Crisis Loan for Alingmnet payments as of 1/4/2013, and intended to make payment to people who are awaiting a new claim to benefit or a recent change in circumstances to be processed by the DWP.
How to apply for a Short Term Benefit Advance
Most benefit customers are aware that it used to be possible to apply for an Alignment to Benefit Crisis Loan from the Social Fund and that this was one of the areas if support that was targeted and removed when the new welfare reforms started to take effect on April 1st 2013.
Not as many people are aware that whilst the Alignment to Benefit Crisis Loans were brought to an end and the Discretionary Social fund was disbanded, that a new provision was set up to try to eliminate the need for a Crisis Loan. These are called Short Term Benefit Advances and work in a similar way to the old Crisis Loans.
The idea is that if you are unable to wait for your claim to be processed and you or your family faces a risk to your health and safety, that you can apply for payment of your benefits even before your application is processed.
You may not be accepted for an avice if your benefit entitlement is is doubt, for example if you are waiting to find out if you pass the habitual residence test
What could beclassed as being odd, is the fact that the process to decide if you can have a Short term Benefit Advance is much quicker that the benefit claims process, even though it is practically the same except that it has 2-3 MORE steps. The STBA decision process but can be completed in 48 hours…
Here is our quick-fire guide on applying for a STBA
- · Call the Benefit Centre dealing with your application to Benefits and ask SPECIFICALLY for a “Short Term Benefit Advance “
- ·The application is taken over the phone and passed to a dedicated team
- ·The team go and find your application to Benefits and will attempt to process the claim on that day
- · If the claim CAN be processed (even if it is not due to be processed yet) it will be processed and payment issued THAT DAY
- ·If the clam CANNOT be processed fully a clerical assessment is made as to whether your claim is likely to be accepted.
- ·If your claim is likely to be accepted a STBA is considered and awarded THAT DAY
The Short Term benefit Advance system is discretionary and you have to meet specific Criteria to be able eligible for a payment:
- ·Have recently made a new claim – or have an existing claim to any of the following benefits – Jobseeker’s Allowance, Employment Support Allowance, Income Support, Incapacity Benefit, Pension Credit, State Pension or Care Allowance.
- ·Be likely to receive enough benefit for the STBA loan to be recovered from
- ·Be able to repay the loan from your benefits within 12 weeks (this can be extended to 24 weeks, however this is in exceptional situations)
- ·Be able to show that if a loan is not made, that you or your family at serious risk or danger.
- ·Not be able to find alternative funding anywhere else.
Even if your STBA application is not accepted, in most cases payments of benefits can and will be made much faster than just leaving your application to Jobseekers Allowance, Income Support, Pension Credit or Employment and Support Allowance in the main process, as it will ensure that your application is looked at within days rather than weeks.
Im Adam Laughton, and in a previous life i worked as a Social Fund decision maker and a JSA adviser who is now working with voluntary organisations to help those who apply for Government assistance like Crisis Loans or Budgeting Loans to find the information that then need to make an application.
Before the Government decided to scrap the Social Fund, people and their families had a place to turn when they found that they were without income (often through no fault of their own) and could apply for a crisis loan to tide them over with money for food or gas and electricity until they were next paid.
With the roll out of the new welfare reforms that began in April 2013, and the closure of the discretionary Social Fund system people are having to find alternative ways to support themselves when without income, and with the number of adverts for payday loansharsk on the TV it is not surprising that these companies are seeing an upsurge in applications.
The government should give real thought to brining back element of the Social Fund to help those who are tempted to apply for these short term loans. with a view to helping to end the misery of those caught in the poverty trap.