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- the maximum rate for daily living expenses available to non-householders (other than those who are homeless) will reduce from 60% to 30% of the personal allowance rate (see paras 3-21)
- Crisis Loans awarded to alleviate hardship because Child Tax Credit (CTC) has not yet been received will be treated as alignment payments (see paras 22-25).
Note: The changes detailed in this bulletin are the only ones that have been agreed. No other aspects of the CL scheme are changing from 9th April.
1. Amendments have been made to:
- Secretary of State Direction 14C, 18, and 20
- Secretary of State Guidance: Part I – Introduction, Part 03 – Crisis Loans and Part 8 – The Directions
- Social Fund Procedural Guide Part 01, Part 05A and Part 05B.
The amended directions are attached at Annex 1.
Reduction in maximum rate of Crisis Loan for living expenses for some applicants
2. From 9th April 2012 the maximum amount for a CL living expense award will be either 60% or 30% of
- the appropriate Income Support personal allowance rate for the customer and partner, or
- the appropriate Jobseekers Allowance hardship rate (JSA hardship cases).
Remember that in some cases where a sanction applies the couple rate may not apply (see Direction 18(5)).
3. The circumstances in which the 60% rate and the 30% rate will apply are set out below.
60% maximum rate (householders and the homeless)
4. The 60% rate will apply in the following circumstances:
- the applicant or their partner has an award of housing benefit (HB) or council tax benefit (CTB) in respect of their home, or
- the applicant or their partner is liable for one of the following
– hostel or board and lodging charges, or
– council tax (or would be liable if the dwelling were not exempt)
in respect of their home and has not been refused housing benefit or council tax benefit on any ground other than exceeding the income or capital limits, or
- the applicant or their partner is liable for mortgage payments, or in relation to Scotland, payments under heritable securities, or
- the applicant is a person without accommodation. (Note that the 60% rate does not apply to people who have no fixed address and who move from one address to another staying with different people.)
30% maximum rate (non-householders, excluding the homeless)
5. The 30% rate will apply where the applicant and partner, where they have one, normally reside in the home of a relative, friend or other person and do not meet the conditions for the 60% maximum rate set out above. (Note: this includes people who have no fixed address but move from one address to another staying with different people, but does not apply to a person without accommodation.)
6. In most cases, it will be clear which maximum rate applies from the information provided by the applicant as part of the standard application process and further enquiries will not need to be made. For example if it is clear that there is no-one else living in the same household as the applicant the DM will not need to check the applicant’s household status. Paragraphs 8 to 19 set out the relevant factors in considering which maximum rate applies and the evidence which DMs may need to obtain in a range of circumstances.
Liability for rent, hostel or board and lodging charges or council tax benefit
7. Where the applicant states that they are liable for rent, hostel/board and lodging charges or Council tax, first ask whether they or their partner have claimed and been awarded HB or CTB for this address.
8. For information about whether an HB claim has been made, use the Where you Live screen on
– JA dialogue 501: JSA Claim Details Enquiry
– IS dialogue 500 : Enquiry Evidence
9. If HB has been awarded the 60% maximum rate will apply. If there is any reason to doubt the applicant’s word ask them to supply further evidence before considering a 60% award. (See paragraph 18 for more details)
10. If an HB claim has been refused ask the applicant to say what reasons were given for the refusal. If this was for any reason other than excess income or capital the 30% maximum amount rate will apply. If the HB claim has been refused because of excess income or capital the 60% maximum amount rate will apply, if you are satisfied that they are liable for rent, hostel/board and lodging charges or Council tax. DMs should not attempt to obtain information about HB claims directly from LAs.
11. If the applicant states that they are liable for rent, board and lodging charges or hostel charges and a claim for HB or CTB has been made but not decided, the DM should ask them to provide supporting evidence, by providing sight of the tenancy agreement with their landlord (See paragraph 19). DMs should note that although a written contract is not required for such an agreement to exist, few landlords are prepared to rely on an oral agreement.
Home Owners with a mortgage
12. To check whether the applicant or partner has a mortgage, use the Home Loan screen on:
– JA dialogue 501: JSA Claim Details Enquiry
– IS dialogue 500 : Enquiry Evidence
13. Where there is no mortgage, check whether the applicant or partner has claimed CTB using CIS dialogue 110: Award History.
14. If a CL applicant or partner has not made a claim for Income Support, income-related Employment and Support Allowance or income-based Jobseekers Allowance and states that they are liable for mortgage payments or payments under heritable securities see paragraph 18, 3rd, 4th and 6th bullet points, for details of other evidence which it may be appropriate to ask the applicant to provide.
People who are living rent free or mortgage free
15. The 60% rate applies to applicants who are not paying rent or a mortgage because, for example, they have paid their mortgage off, but who are responsible for Council Tax (or would be if the dwelling was not exempt). If necessary, confirm responsibility for Council Tax for the residence. Note that some homes are exempt from Council Tax, e.g. Armed Forces accommodation or a self-contained annex to the home of a relative. Where the applicant or partner has a current exemption notice from the Local Authority, the 60% rate still applies.
Persons without accommodation
16. The 60% rate will also apply to applicants who have no home at all, known as Persons without accommodation (PWAs), see Direction 18(6)(b). This means those applicants who are homeless and sleep rough on the streets or on park benches, not those who have no fixed address and frequently move from one address to another, staying with friends.
Asking the applicant to provide further supporting information
17. Where there is any doubt, applicants should be able to show their or their partner’s responsibility for housing costs by providing a tenancy or mortgage agreement and in the absence of such an agreement information about one or more of the following as appropriate:
- the landlord or landlord’s agent to whom rent is due;
- the landlord or organisation to whom commercial board and lodging or hostel charges are due;
- the lender to whom a mortgage is due;
- the Council tax bill for the residence or any current exemption notification;
- any current Housing Benefit award (the DM will sometimes need to see the refusal of an HB or CTB application);
- any current Council Tax Benefit award.
18. If the DM is satisfied that the applicant qualifies for a CL but it is still not clear which maximum rate applies and where there is insufficient time to clarify this e.g. by the applicant providing supporting evidence, the DM should consider making an award based on the 30% maximum rate. If further evidence subsequently comes to light which shows that the applicant satisfies the conditions for the 60% maximum rate the DM should review the application and if appropriate make a revised award based on the 60% maximum rate.
19. The Social Fund Computer System (SFCS) will continue to display the 60% rate in dialogue 131. The desk aid contained in the appendix to Part 5A of the SF Procedural Guidance will be updated with off line calculations for both the 60% and the 30% rate. This is shown in advance at Annex 2. DMs should note that there are separate tables showing the 60% rate and the 30% rate respectively. In all cases where the 30% rate applies the DM must overwrite the maximum award amount in dialogue 131153: Living Expenses Decision. This will either be with the 30% rate from the desk aid or a lower figure based on the applicant’s circumstances. Remember to use the correct reason for offer code:
- 26 for full award
- 32 for maximum award
20. Telephone scripts will be amended to ensure that relevant information is gathered to enable a decision to be made on the rate to pay.
21. What counts as an alignment payment has been amended. The types of CL award that count as an alignment payment on or after 9th April 2012 are as follows:
- an income-replacement benefit has been claimed but has not yet been decided or an award has been made but full benefit entitlement is not in payment, or
- CTC has been claimed but either a decision has not been made or an award has been made but is not in payment, or
- employment has begun after a period on an income-related benefit but first payment of earnings has not yet been received
and, as a consequence, the applicant needs help with living expenses in the meantime.
22. In CTC renewal cases the customer is likely to know when they last received CTC, giving a good indicator of when the next payment is due. For new claims to CTC DMs should establish whether the applicant has requested weekly or 4-weekly payments of CTC. DMs may consider restricting the period of the CL award to a maximum of 7 days and advise the applicant to make prompt contact with HMRC to enquire about an emergency payment if the CTC claim is not decided within that time span.
23. DMs should note that CL awards made in the circumstances set out in paragraph 22 will not count towards the 3 in 12 restriction.
24. As for all alignment cases, these applications must be recorded on SFCS using Application Purpose Code 06 (Alignment – period before first payday).
25. When reviewing applications made on or after 9th April 2012, apply the rules set out in the new and revised Directions. If reviewing applications made prior to this date use the rules in the previous Directions.
26. The previous Secretary of State’s Directions and Guidance on Crisis Loans are still available in the Social Fund Guide for use when reviewing applications made before 9th April 2012.