Social Fund Loans

Social fund loans can provide assistance with unexpected expenses that you may find difficult to cover. These include Budgeting Loans and Crisis Loans.

Loans that must be repaid must be taken automatically from your benefit – these are also known as payment advances.

Budgeting Loans

Budgeting loans are interest-free social fund loans designed to assist those on benefits pay for essential items they need but cannot afford. Repayable over two years, they do not affect other means-tested benefits.

Applying for a budgeting loan doesn’t have to be done online; you can also download the form and send it via post or request text message (external link opens in new window).

These loans can be used for purchasing equipment, furniture and other necessities while searching for a job or while on disability benefits. They may also cover travelling expenses like season tickets or other costs related to job searching that help support your search.

Each application is reviewed individually and the amount available depends on a variety of factors, such as any other budgeting loans or crisis loans you are repaying. If you owe PS1,500 or more under any other Social Fund loans, you will not be eligible for another loan.

Crisis Loans

Crisis loans are interest-free financial assistance designed to meet short-term needs caused by an emergency or disaster. Usually, they’re paid to individuals who have been on Income Support, income-based jobseeker’s allowance (IBJ), employment and support allowance (ESA) or pension credit for more than 26 weeks.

As of April 2013, Crisis Loans are no longer available from the Department for Workplace Pensions (DWP). Instead, claimants can receive a short-term advance that must be used only under specific circumstances and cannot be used for general living expenses such as food, clothing or travel.

Cold Weather Payments

Cold Weather Payments are designed to assist those on low incomes pay extra for heating costs when temperatures in their area dip below zero degrees celsius. The benefit, known as PS25, is paid annually between November 1 and 31 March and applies for each seven day period of exceptionally cold weather between those dates.

Claimants receive payments automatically, without needing to submit a request. Assuming your claim is valid and processed successfully, you should receive your payout within 14 days.

You may qualify for a cold weather payment if you receive certain benefits or Support for Mortgage Interest (SMI). To qualify, the average temperature in your area must remain at zero degrees celsius or below for seven consecutive days.

Your money will be sent directly into your bank account, so there’s no need to worry about it interfering with any other benefits you receive.

Local Welfare Assistance Schemes

Local Welfare Assistance schemes provide essential emergency support for families facing financial difficulty or a crisis. They offer cash grants, vouchers and money to purchase furniture such as beds and sofas.

Families in need can receive up to PS1,000 annually to cover food, energy bills, rent or nappies for children under three. It’s free but you must apply each 12 months.

England boasts hundreds of welfare assistance schemes, each providing different forms of support. Some provide cash-first options while others operate on a voucher or grant basis.

We are advocating for government to increase ring-fenced funding for local welfare assistance schemes, so councils can develop sustainable long-term LWA plans. Doing this would give councils the assurance to guarantee this essential support is accessible in every community and meets growing levels of need.