A loan may be available to those who claim Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance or Pension Credit. A person has to have claimed one of these benefits for at least six months to get the support.
People should note that because the money is a loan, it has to be paid back and is done so through benefit payments.
The loan is intended to pay for essential items or services. This may include:
- Furniture in the home
- Household white goods such as a washing machine, cooker, hoover or fridge
- Clothing or footwear
- Rent a person has to pay in advance
- Any moving house costs such as a removal van
- Essential work needed on one’s home, including maintenance
- Security for the home, such as new keys or locks
- Some travelling costs in the UK
- Things that will help someone get a new job, such as a suit for interviews or taxi fares to get to an interview
- Costs due to pregnancy and childbirth
- Costs for a funeral.
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The lowest amount a person can borrow through the scheme is £100 but a person can get up to these amounts:
- Single claimants – £348
- Couples – £464
- If an individual or their partner claims Child Benefit – £812.
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How much a person can get depends on their capacity to pay the loan back, their savings and if they are paying back an existing Budgeting Loan or Crisis Loan.
The support is not available to those who owe more than £1,500 in Crisis Loans and Budgeting Loans. People in employment who are in a trade dispute can also not get the loan.
The money has to be paid back in full to the DWP within two years, but there is no interest rate on the amount.
How much is taken in repayment depends on a person’s total income, including any benefits they receive and what they can afford to pay.
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If a person qualifies for a loan, the DWP will tell them how much their weekly repayments will be from their benefits. Once these terms have been accepted, the repayments will start immediately.
People can apply for the loan online or by post. The DWP will send the applicant an email, text or letter to let them know if they have been offered a loan.
A person must request how they would like to be notified when they apply. Those who request a decision by email or text will get a response within seven days, while people who request a decision by letter will receive one within 21 days.
The Budgeting Loan has to be accepted by the applicant before they receive the funds. How a person does this depends on how they applied.
People who apply online will get a text or email telling them how to accept while those who applied by post can send a letter to accept the loan.
After this, the money will be paid into the person’s account but when the money arrives depends on how the individual applied.
Applicants who accepted the loan online will get the money within seven days while those who did so by post will get the money within 21 days.
If an application has been unsuccessful, the person can ask for it to be looked at again, by writing to the address at the top of the decision letter.
People on Universal Credit are not eligible for the loan, but can instead get a Budgeting Advance, to help with emergency costs.
The smallest amount that can be borrowed is £100 and a person can borrow up to:
- Single claimants – £348
- Couples – £464
- If a claimant has children – £812.
Those who are struggling to pay their bills may also want to check if they can get non-repayable grants, using Turn2Us’ grants checker tool.
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