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Living on continuously low income is a challenge on its own right however matters can be further complicated when there is a need for a larger payment – a substantial bill, an urgent household purchase or unplanned repair. As a rule people on low incomes do not have recourse to large savings. In addition they can be excluded from the low cost loans customarily offered by the high street banks. This can result in borrowing from expensive, or even worse, unregulated lenders. The services of the Social Fund aim to counteract this tendency by providing help with urgent, unexpected costs to people with limited financial means.
The Fund consists of several types of payment schemes, each covering particular set of circumstances. Central amongst them is the provision of budgeting loans. The Social Fund contact number (0844 4530151) is an important point of communication for people seeking to access any of the schemes.
The budgeting loans are intended to assist with providing money for essential needs, such as household items, clothes and footwear, removal costs and advance rent payment when moving into new accommodation, home maintenance expenditure, maternity and funeral payments, and expenses related to getting and starting a new job. They are managed through the Department of Work and Pensions. Applicants need to fulfil several conditions to qualify for a loan under the scheme. They have to be in receipt of a certain income-related benefits (such as Income Support, Jobseeker’s Allowance, Pension Credit) for a duration of at least 26 weeks and to have less than £1000 in savings (jointly with their partner, if there is one). Prospective applicants can call the Social Fund contact number for further information if they are in doubt about any of the requirements.
Although the credit facility operates under alleviated rules, the payments are not automatic and the applications are subject to assessment. This takes into account the particular situation and whether it falls within the scope of the provision, the available savings, previous budgeting loans taken under the Social Fund, and the ability of the applicant to return the money. The loan is tax and interest-free. If given, it does not affect other benefits which the applicant will continue to receive routinely as before.
Claimants are requested to fill a form which can be obtained via the Jobcentre Plus office or can be downloaded from the gov.uk website. Processing of the application can take up to 6 weeks. The applicants can use the Social Fund contact number for queries and updates regarding the application. Applicant is required to supply Information about savings and any debt payments at the time of the request before decision can be made. While there is no need to outline the situation necessitating the loan in great detail, it is important to give a general indication of the type of expense that needs to be covered.
The decision about providing budgeting loan can be challenged by the applicant who can request a review of the circumstances and point out inaccuracies in the facts and reasoning in the conclusions of the DWP.