People on the following social security benefits can apply for a budgeting loan:
Income-related Employment and Support Allowance, Pension Credit, Income-based Jobseeker’s Allowance and Income Support.
Claimants must have been on the qualifying benefits for at least 26 weeks and with a break of no more than 28 days in claiming during that time. Claims may be affected by how much the claimant has in savings, as well as any existing social fund loans. Savings of £1000 for a single person and £2000 for a couple may prevent you from applying for a budgeting loan or lower the amount that you can get.
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What is a Budgeting Loan for?
A budgeting loan is a tax-free loan from the DWP for a minimum amount of £100, and is usually claimed for the following expenses:
Funeral or maternity expenses
Furnishings and home improvements
Footwear and clothing
House moving costs
The loan decision will be made according to your circumstances, savings, outstanding social fund loans, and ability to pay the loan back.
If a budgeting loan is refused, other financial payments may be available, for example, maternity grant, funeral payment, local council discretionary support and others, the DWP has further information on what may be available.
Applying for a Budgeting Loan
To apply for a budgeting loan, you can apply online via the gov.uk website, except if you live in Northern Ireland, in Northern Ireland you have to apply through your local jobs and benefits office. You can also download an application form and send it to the DWP, or ask for a form at the Jobcentre.
Repayment of a Budgeting Loan
Repayment of the loan is arranged on acceptance of your application. The good news is that the loan repayments are interest-free.
Normally the loan has to be paid back within two years, and if you stop receiving benefits in the meantime, you will have to discuss the loan repayment with the DWP.
repayments for the loan will normally be taken from your benefit payments, but if you are struggling to repay and being left in financial difficulties, you will have to contact the DWP to work out a payment plan.
People who are claiming Universal Credit are not eligible for budgeting loans and have to apply for a different scheme called a Budgeting Advance.
The rules are that you have to have been claiming Universal Credit for six months unless the budgeting advance is to help you to get or keep a job. You can only apply if you are not already paying off a budgeting loan, and you have to have earned less than 2,600 as a single person or 3,600 as a couple. If you have savings of £1000 or more, it may reduce how much you can get.
Budgeting advances usually have to be paid back within six months and the repayments start from your next Universal Credit payment. You apply for a budgeting advance through your Jobcentre Plus.
You can also find the relevant numbers below, which will connect through our call connection service. Find the relevant department below.