Social Fund – for emergency financial aid

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Previously run by Jobcentre Plus, part of the government’s reshaping of the benefits system was to make the Social Fund an independent body. Responsible for the administration of a variety of schemes, the organisation largely focuses on handing out small loans to welfare claimants in times of financial need.

The two forms of monetary aid most people know of are currently the Budgeting Loan and the Crisis Loan – however, the Social Fund does also deal with seasonal issues such as the Cold Weather Payment and the Winter Fuel Allowance, both of which have become of utmost importance in recent years.

Crisis and Budgeting loans are typically handed out in times of extreme emergency, where something has come up outside of an individual’s control – with deaths, rent arrears and ill health being among the three most common reasons behind a claim.

Unlike traditional loans taken out with banks, the sums handed out by the Social Fund are generally perceived to be of very low risk to the taxpayer – with all repayments taken in small increments from a claimants future benefit payments over the course of anywhere up to 24 months. Some experts have claimed that 97% of all sums are eventually fully repaid, which compares favourably to credit card, mortgage and personal loan figures.