THOUSANDS of households on certain benefits could be eligible for £812 in cash help to pay for everyday essentials.
Claimants can apply for a Budgeting Loan to help pay for things like furniture and white goods if they meet their eligibility criteria.
It's an interest-free loan from the government which means you'll only have to pay back what you borrow.
To pay it back you'll see a reduction in your monthly benefit payments in the future – so you'll need to budget for that.
But these loans can be most beneficial for emergency situations like when a household is forced to replace a broken boiler.
The cash help compliments other schemes like the Household Support Fund which gives non-repayable grants to low-income households including those on benefits.
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Households can also get £1,000s from local charities, energy companies and water firms.
Budgeting Loans are a far cheaper way to borrow cash compared to using a payday or doorstep lender who charge high-interest rates which could see you plunge further into debt.
The Budgeting Loan is available to those who are claiming certain benefits and it's called a Budgeting Advance for those on Universal Credit.
Even though they're essentially the same thing, there are a few differences when it comes to eligibility.
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People are only just realising they could be entitled to an extra £201 a week
To get a Budgeting Loan you must have been getting one or more of these benefits for the past 6 months:
- Income support
- Income-based jobseeker's allowance
- Income-related employment and support allowance
- Pension Credit
You also cannot get a Budgeting Loan if:
- You get "new style" jobseeker's allowance or "new style" employment and support allowance
- You're involved in industrial action (for example a strike, walkout or lockout)
- You owe more than £1,500 in total for Crisis Loans and Budgeting Loans
You'll be eligible for a Budgeting Advance if you've been getting Universal Credit for six months or more and you've earned less that £2,600 (£3,600 for couples) in the same period.
A Budgeting Loan or Budgeting Advance can help pay for the following:
- Furniture or household items (for example, washing machines or other "white goods")
- Clothes or footwear
- Rent in advance
- Costs linked to moving house
- Maintenance, improvements or security for your home
- Travelling costs within the UK
- Costs linked to getting a new job
- Maternity costs
- Funeral costs
- Repaying hire purchase loans
- Repaying loans taken for the above items
How much can I get?
The lowest amount you could get for both loans is £100.
But you could get up to:
- £348 if you're single
- £464 if you have a partner
- £812 if you or your partner claim Child Benefit
Exactly how much you'll get will depend on whether you can pay the loan back or are paying back an existing Budgeting Loan.
How do I pay it back?
A Budgeting Loan is interest-free so you only pay back what you borrow.
The repayments will be taken automatically from your benefits. The amount you repay is based on your income – including any benefits you receive – and what you can afford.
After you apply for a Budgeting Loan, you'll get an email, text or letter telling you if you’ve been offered a loan.
This explains how much your weekly repayments will be if you accept the loan.
You normally have to repay the loan within two years (104 weeks).
How do I apply for a Budgeting Loan?
If you claim old-style legacy benefits you can check if you're eligible for a Budgeting Loan on the government website.
If you're eligible you can apply online by visiting Gov.UK.
If you wish to fill in the form in paper format, you can download a SF500 form and return it to the address on the label.
After you apply you’ll be given a decision on your application. You need to accept the decision before you get your money.
If you apply online, you'll find out if you’ve been offered a loan within:
- Seven days if you get the decision by text or email
- 21 days if you get the decision by letter
If you apply by post, you'll get a letter telling you if you’ve been offered a loan within 21 days.
You’ll get your money within:
- Seven days of accepting the loan offer online
- 21 days of your loan offer acceptance being received by post
The money will then be paid into your bank account and you'll get a text message confirming this has been done.
How do I apply for a Budgeting Advance?
If you claim Universal Credit, you can apply for a Budgeting Advance in a number of ways.
Claimants can ask for a Budgeting Advance on their Universal Credit journal.
They can also apply over the phone by calling 0800 328 5644.
Otherwise, those on Universal Credit can visit their nearest Jobcentre and ask their work coach for the cash help.
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