|
|
|
Crisis
Loans
This information is
intended to be a brief general guide only. It should help you understand about
crisis loans, but should not be treated as a full statement of law.
Key features of the scheme are included, but not the full text of the
law or the Secretary of State's directions or guidance.
All
applications have precise legal tests applied to them. You can find the
Secretary of State's directions and guidance in the Social Fund Guide which you
can access via the
DWP website |
What are
they?
Crisis loans are interest
free loans. As the name suggests, crisis loans are intended to meet urgent
needs when no other help is available. They are to provide help in an emergency
or a disaster. Back to
top
Do I have to be
getting a Social Security benefit before I can apply for a crisis
loan?
No. Anyone who does not have
enough money for urgent expenses can apply. You do not have to be getting a
benefit, or to have claimed benefit.
If you have claimed a benefit and are waiting for a first payment,
you may be able to get a crisis loan to tide you over if your benefit office
cannot make an interim payment.
You do not have to wait for your benefit
claim to be decided. You can apply for and receive a crisis loan while you are
waiting to take part in a Work Foccused Interview, for example.Back to
top
How do I apply?
You can apply for a crisis loan
in writing or by telephone. Almost all areas now have arrangements for
telephone applications, but the law says they must still accept written
applications, either on the appropriate form or in a letter. To download a
form, use this link:
DWP website. You can find your
local office from the
Jobcentre Plus website.
If you apply
over the telephone, Jobcentre Plus will tell you their decision straight away.
If they make an award, you will have to agree in writing how you will repay the
loan before you can have a payment. You may need to go to the office to do
this. If they do not make an award, they will confirm the verbal decision in
writing.
If you apply in writing, use form SF401. You can get a
form from your Jobcentre Plus office or download one from the
DWP website. Include as much
detail as possible about the crisis and how a payment will help prevent serious
risk to your or your family's health and safety. Send the form to your local
Jobcentre Plus office.
They will send you their
decison in writing. They will send you the payment only after you have agreed
how you will repay it.
If you are unhappy with the
decisio, you can ask a Reviewing Officer in Jobcentre Plus to look at it again.
Your application for review must be made in writing, even if you applied by
telephone. If, following the Reviewing Officer's decision you are still
unhappy, you can apply for an independent
IRS review.
Back to
top
What happens
next?
We will ask your local
office to send us the paperwork the Inspector needs as soon as possible.
Ideally, this should occur within 4 days. Please click
here to be
taken to the IRS Review page to find out 'What the review involves'
Back to
top
What can a
crisis loan be paid for?
There
are no specific prescribed needs for which a crisis loan should be paid.
Generally applications are for:
- a specific item or
service; or,
- immediate living
expenses.
For example, you
might need to replace an important item of furniture and household equipment
urgently. Or, you might need money for living expenses urgently because you
have lost your money or it has been stolen or because you have spent all your
money.
There are some expenses that crisis loans cannot be paid for. For
example you cannot get a crisis loan for;
- medical items,
spectacles or dental treatment;
- most housing costs,
like deposits to secure accommodation, mortgage payments or big repairs to your
home (but you can get a payment for rent in advance if the landlord is not a
local authority, to pay for board and lodgings, to meet intermittent costs like
emptying septic tanks, or for minor repairs to your home);
- buying or installing
a telephone, or pay call charges;
- running costs for a
motor vehicle (such as repairs).
Back
to top
How do I
qualify for a crisis loan?
You do
not need to be getting any benefits to receive a crisis loan. However, to be
eligible for payment you must be aged 16 or over and without sufficient
resources to meet your and or your family's immediate short term needs.
There are several elements to the qualifying condition, all of which
have to be met for a payment to be made. These are that;
- You must need to
meet the expenses in an emergency, or because of a disaster, and
- The situation means
that there may be serious damage or a serious risk to your, or a member of your
family's, health or safety, and
- A crisis loan must
be the only means of preventing that serious damage or serious risk.
"Emergency" is taken
to mean "an unforeseen circumstance or pressing need, either of which requires
immediate remedy or action". We give the term "disaster" its everyday meaning.
"Serious risk to health or safety" means more than mere discomfort or
inconvenience. However, while the risk to health or safety has to be serious,
this does not mean that medical intervention would be required. The possible
consequences do not have to be immediate, provided they are foreseeable if the
situation is not remedied.
While a crisis loan must be
the only means of preventing the serious damage or serious risk to health or
safety, alternatives ways of preventing the risk must be available soon enough
and must be reasonable.
For example, you could
still get a crisis loan if you have savings you cannot access immediately.
Also, you would not be expected to sell possessions or do anything illegal.
Back to
top
If I have qualified for a crisis loan will I
get a payment?
Providing your
expenses satisfy all the qualification tests you will almost certainly receive
some payment for them.
However, each Jobcentre Plus District office has an
annual budget for loans that is fixed and cannot be exceeded. Back to top
Will I get the
amount I have requested?
There
are a number of things that might affect the amount you get.
You will not
usually be awarded more than is necessary to safeguard your health or safety or
that of your family.
There is a maximum amount that can be awarded for
living expenses. The maximum amount is calculated taking account of the number
of people in your family and the weekly Income Support personal allowances -
regardless of whether you receive any benefits.
The maximum amount for an
item is the lesser of the cost of repair or the reasonable cost of replacement.
The Decision Maker must look at what amount is reasonable to meet your needs in
a way that is suitable in your circumstances.
Commissioner's Advice on amounts to award gives some
more information about this.
You will not be awarded
more than the amount the Decision Maker thinks you are likely to be able to
repay. How much you can repay depends on your existing total Social Fund debt
and any other commitments.
If you already owe money to
the social fund, this might affect how much you can get. The most you (together
with your partner, if you have one) can owe the social fund is £1,500. If
you already owe £1,500 you will not be able to receive a crisis loan
payment.
If you cannot have a crisis loan because your social
fund debt is already £1,500, it is possible for a community care grant to
be awarded, providing all the conditions for both a community care grant and a
crisis loan are satisfied. Back
to top
What about repaying the loan?
You will have to repay the crisis
loan, and will be asked to agree to repayment terms before the payment is made.
The repayment rate is usually set at 5%, 10% or 12% of your income, depending
on what other commitments you may have. Your total Social Fund debt normally
has to be repaid within 104 weeks.
If you are receiving
benefit, your repayments will be deducted from your benefit.
There is no
right to an Inspector's review about the rate of repayment. However, if you
have difficulty making the repayments you agreed to, you may ask the Jobcentre
Plus to consider rearranging the payments. Back to top |
|
