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Departments Directions Social Fund Guide

Part 3 - Crisis Loans

Purpose of Crisis Loans

4000Crisis loans are intended for applicants who are unable to meet their immediate short term needs either:
  • in an emergency
  • as a consequence of a disaster
4001These payments are:
  • referred to as crisis loans
  • interest free
4002The need for help will generally be for:
  • a specific item or service
  • immediate living expenses for a short period not normally exceeding 14 days
  • rent in advance when a Community Care Grant has been awarded under Direction 4(a)(i)
4003The crisis loan should be the only means of avoiding serious damage or risk to the health or safety of the applicant or a member of the family, unless Direction 3(1)(b) applies.
4004Rent in advance can be met if a person is leaving institutional or residential care and a Community Care Grant is being awarded to enable the person to return to the community. The health and safety criteria do not apply to this type of application.
4005Rent in advance in other circumstances can be met under Direction 3(1)(a). The health and safety criteria apply to these cases.
The Decision Maker's powers to award crisis loans
4006In deciding whether to make a crisis loan, you:
  • are bound by the law and the Department's directions
  • must take account of the guidance issued by the Department and the Area Decision Maker (ADM)

Principles of Crisis Loan decision making

The law, directions and guidance

4020You are bound by law to have regard to all the circumstances of each case, in particular:
  • the nature, extent and urgency of the need
  • the existence of resources from which the need may be met
  • the possibility that some other person or body may wholly or partly meet the need
  • the likelihood of repayment and the time within which repayment is likely
  • the relevant allocations to the District for the social fund loans budget

Department's directions

4021The Department has issued directions which qualify the power to make Crisis Loans (CLs) by reference to:
  • the eligibility of the applicant
  • exclusions
  • the maximum amount to be awarded
  • the budget allocation to the District
These directions are binding.

Department's guidance and Area Decision Maker's (ADM) guidance

4022In reaching a decision take account of the guidance:
  • issued by the Department about priorities for loans budget in general
  • the Department may issue about constraints on the award of Crisis Loans

Decision Makers (DMs) discretion

4023The guidance should help you to reach a decision, but you should:
  • always use discretion
  • avoid a rigid interpretation of the guidance
  • consider circumstances which appear to be outside the scope of the guidance
  • remember that social fund payments are discretionary and the absence of directions or guidance applying to a particular circumstance, item or service does not mean that help should be refused
  • make sure that you consider all the circumstances of a case when you determine an application
  • consider the consequences of refusing the award
  • consider the circumstances in which the need arose and whether payment to a third party might be appropriate
4024The questions, in order, which you should consider are:
  • eligibility criteria:
    - is the applicant eligible? - Direction 14, 15, 16 and 17
    - is it a repeat application? - Direction 7
    - do any of the exclusions apply? - Direction 23
  • qualifying conditions:
    - does the applicant satisfy the requirements of Direction 3?
  • priority of need - what is the priority of each item or service which satisfies the conditions in Direction 3? In practice, expenses which will prevent serious damage or serious risk to health or safety will, by their nature, be of high priority. Consider the Department's guidance and all the circumstances of the case, including:
    - the nature, extent and urgency of need
    - the existence of resources from which the need may be met
    - the possibility that some other person or body may wholly or partly meet the need
  • budget- you are bound by:
    - section 136(1)(e) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 to have regard to the budget allocation
    - Direction 41 to give priority to high priority needs throughout the period of the allocation
    - Direction 42 not to exceed the relevant allocation
  • award:
    - how much should you award?- Direction 18, 20 and 21
    - consider the applicant's ability to repay-Directions 5 and 22. NB although the DM determines that an award is repayable it is the officer acting on behalf of the Department who decides the terms and conditions of repayment.
4025Ensure the reasons for your decision are fully supported by the evidence and are recorded in your decision or supported by computer system records where appropriate. The evidence should always be available for future scrutiny if necessary.
4026When you have obtained all the necessary information, make the decision without delay. Never deliberately delay a decision until the need has passed.

Structure of guidance

4040The guidance which follows covers:
  • applications (paras 4060-4099)
  • eligibility (paras 4100-4549)
  • exclusions ( paras 4550-4649
  • qualifying conditions ( paras 4650-4799)
  • establishing priorities (paras 4800-4849)
  • the amount to be awarded (paras 4850-5999)
4041Guidance on the circumstances in which crisis loans may be awarded is given in paras 4650 et seq. The examples given are not exhaustive but are illustrative of the sort of situations where crisis loans may be appropriate.


4060The Social Fund (Applications) Regulations (Northern Ireland) 1988 (as amended) prescribe the form and manner in which applications are to be made, and the time at which an application is to be treated as made, for discretionary payments from the Social Fund.
4061The date of an application to the Social Fund is the date it is received in an office of the department, including the office of an agent acting on behalf of the department, provided the application is in writing and:
  • on a form approved by the Department or
  • is acceptable as sufficient in the circumstances of the case, e.g. there is sufficient information in a letter and
  • if an application is made on behalf of a person, by someone other than an appointee, that person must give their consent in writing to the application being made on their behalf
4062An application which does not meet the requirements of the Social Fund (Application) Regulations (Northern Ireland) 1988 as described in para 4061 is termed defective. However, you can treat the application as made on the date it was originally received provided the applicant complies with a request to supply in writing or at an interview.
4063Crisis Loan applications should, where possible, be dealt with on the date that the need arises.
4064Although CCGs and CLs may be applied for in their own right, because applications for both are determined on similar discretionary bases, directions provide that, in certain circumstances, an application for a CCG may be treated as an application for a CL and vice versa. Further guidance on this subject can be found at the end of this Part.
4065However, DMs are not required to consider a CCG in every case of a CL application or vice versa. Such consideration may be appropriate where the information declared by the applicant in support of a CL application alerts the DM to the possibility of a CCG being appropriate, and where:
  • an application for a CL or CCG to meet the same need is not being considered by a Decision Maker or Social Fund Inspector at the date of application; and
  • the Decision Maker considers that a CCG may be awarded in respect of the need specified in the application.
Similarly, an application for a CCG may be treated as an application for a CL where the reverse circumstances apply.

Applications made over the telephone

4066Where a customer makes an initial enquiry by telephone and agrees to make their application by telephone, they will only need to sign the application if a payment is to be made.
4067If the decision is negative, the customer will receive that decision by telephone avoiding unnecessary journeys to the office and will also receive by post full written confirmation of the decision and notification of the right to a formal review.
4068Remember that this service is intended for customers who make their initial contact to the office by telephone: customers who are already in the office must never be told to go home and telephone.
4069Customers who have difficulty making themselves understood on the telephone must be offered an immediate office interview instead.
4070When a customer contacts the office about a crisis loan by telephone, confirm at the outset that he/she:
  • understands what will happen i.e.:
    - if the decision is negative they will receive it by telephone, with full written confirmation by post;
    - if the decision is positive and they require an immediate payment they will be required to attend the office with satisfactory evidence of their identity to confirm their statement and agree repayment terms and conditions;
  • is happy to make the application by phone.
4071While it is a legal requirement that the loan offer and repayment terms must be accepted and signed by the customer before the payment is due, this will not always necessitate attendance at the office. For example:
  • the crisis loan may be for a household item, and there is time for the acceptance and payment to be made by post;
  • the customer has contacted the Social Security or Jobs & Benefits office from the Welfare Rights Office or Citizens Advice Bureau and is able to make the application and agree the repayment terms by fax.

Investigating the application

4072You will normally be able to decide whether to make a loan from the information on the application form. But further investigation may be necessary if:
  • there is insufficient information
  • there is any reason to doubt the validity of the application or the identity of the applicant is unclear

Supporting evidence

4073It is the applicant's responsibility to provide all the evidence necessary to determine an application.
4074Sometimes it may be necessary to seek further information or clarify an aspect of the application. You can usually resolve this by either:
  • contacting the applicant or
  • checking Departmental records
4075Where the applicant provides third party details and further enquiries are needed as per para 4074 above, it would be appropriate to contact the third party (particularly a Social Worker or Probation Officer), if they are likely to be able to provide more detail.
4076If the applicant or third party gives any information over the telephone, this is acceptable as corroborating evidence.
4077Exceptionally, it may be appropriate to ask the applicant for any corroborating evidence they may have, such as:
  • estimate of cost of repair
  • estimate of cost of replacement
  • relevant evidence of a medical condition, e.g. an existing doctor's note, a letter from a hospital or prescription counterfoil
4078You should ask for as much supporting evidence from the applicant for corroboration as is reasonable and necessary to substantiate the application, but do not:
  • ask for evidence which would incur any expense to the applicant
  • insist that the applicant provides supporting evidence, particularly from a third party
4079If the applicant does not produce the evidence, make a decision based on the completed application and any other evidence you already hold.
4080Do not ask for further evidence if it is unlikely that the application will succeed.
4081Any information on which you base your decision must be made available to the applicant either on request or at the review stage. If necessary, you may take reasonable steps to protect the identity of the source, see Disclosure of Information )Part 1) and para 4085.
4082With this in mind you should investigate the validity of any information provided either anonymously or in confidence and which casts doubt on other evidence held.
4083You may be able to obtain evidence from another source or clarify the matter by obtaining further evidence from the applicant thus avoiding the need to use the confidential information as evidence. Corroboration will not generally be necessary where information is from a professional source which is not in question.
4084If corroboration of confidential information is necessary but not reasonably obtainable you should seek the consent of the third party source to use the information as evidence. You should however make it clear that, if they agree, the source of the evidence may be made known to the applicant.
4085If exceptionally you nevertheless use as evidence any information provided in confidence without the consent of the person who has provided the information you may take reasonable steps to protect the identity of the source, e.g. by:
  • deleting the name and any references from which the source might be traced or
  • summarising the content of the information
4086You must fully document the evidence used and the weight you have given to such evidence bearing in mind the need to ensure the facts on which you base your decision are correct.
  • entitlement to benefit is in doubt or
  • misrepresentation has occurred
4087Investigate in the normal way any allegations of fraud which may suggest that:
  • entitlement to benefit is in doubt or
  • misrepresentation has occurred

Applications for Rent in Advance

4088The following information is needed to support an application for rent in advance and will be gathered on completion of SF401 application form:
  • the reason for the change of address
  • whether they have been given notice to quit (landlords usually have to give between 2 weeks and 2 months notice, depending on the circumstances in which notice is given)
  • the date by which they have to leave their current address
  • the new address they are moving to
  • how and when they found out about the new address
  • the name, address and telephone number of the landlord or letting agent
  • a breakdown of the costs - i.e details of the rent in advance and any deposit or bond
  • whether they have a copy of the tenancy agreement (a tenancy agreement can be verbal, but normal practice is for a written agreement to be made)
  • how they will meet the cost of any deposit/bond
4089Decision makers must also consider whether the applicant has had a crisis loan for rent in advance in the last 6 months, as most private tenancies for rented accommodation cover a period of at least 6 months.
4090Additional evidence may be needed where a crisis loan has been paid for rent in advance in the last 6 months as follows:
  • did the customer move to the accommodation in respect of which rent in advance was previously paid? If not, why didn't the customer move? If they moved to a different address did they have to pay rent in advance and if so how much?
  • what were the terms of that tenancy agreement? Did it cover a period of less than 6 months?
  • where the customer is moving before the end of the period covered by the earlier tenancy, what are their reasons for leaving the property early?
  • when was notice served on the customer to leave the property and how much notice was given?

Evidence not provided

4091If the customer does not provide the above information the DM should consider whether the customer has shown that they are in urgent need.
4092Where a customer has made arrangements to move into new acommodation and is expected to pay an amount for rent in advance, they should be in a position to provide contact details for either the landlord or letting agent.
4093The decision must be fully documented and clearly explain:
  • which qualifying condition has/has not been met and
  • the evidence they have considered. With full reasoning as to why evidence has been accepted/rejected.

Previous application for rent in advance

4094Information about previous applications may be relevant to the current application. DMs should check SFCS records to establish if the customer has had a crisis loan for rent in advance in the last 6 months.
4095There may be good reasons for a landlord to bring a tenancy to an end before the end of the period for which it was granted. For example there may have been rent arrears of 8 weeks or more or the property may have been repossessed by the landlord's mortgage lender.
4096DMs should consider the circumstances in which the previous tenancy ended. If a further rent in advance award is made consideration should be given to making the rent in advance payable to the landlord.
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