Supplied by the government in order to replace the now-cancelled Crisis Loans scheme, Budgeting Loans are available to welfare claimants who require a lump sum in order to pay for rent, furniture or other necessities.
Loans start at a minimum of £100 and can go up to £1,500, with repayments drawn from deductions taken from future benefits payments.
Anyone who has been receiving any income related benefits payment (such as Income Support, Jobseeker’s Allowance or Employment and Support Allowance) for a minimum of 26 weeks, has children, is single and doesn’t have savings that exceed £1,000 should be eligible to receive a Budgeting Loan – though the Department for Work and Pensions look at each unique case on its individual merits.
Although largely unnoticed by the mainstream media when it was implemented in 2013, many welfare experts have been critical of the introduction of Budgeting Loans – whereas Crisis Loans began from £30, some have argued that the larger advances required under the new system encourages benefit claimants to get further into debt than they need to, which could lead to larger financial problems further down the line.
Budgeting Loans can be applied for by filling in form SF500 and handing it in at a local Jobcentre Plus branch – though many people have noted that the process is much swifter when dealt with over the phone.