Departments Directions Social Fund Guide

Part 4 - Budgeting Loans

Direction 9 - Treatment of capital

The Department directs that

(1)Where -

(a)the applicant, or his partner, is aged 60 or over and the total capital resources of the applicant and his partner exceed £2000, or

(b)the applicant is, or if he has a partner both are, aged under 60 and the total capital resources of the applicant and his partner exceed £1000.

Any budgeting loan which would but for this direction be awarded shall be awarded only if, and to the extent that, the amount of the award is more than the excess.

(2)Subject to paragraph (3) in this direction, “total capital resources” shall be calculated in accordance with -

(a)where the applicant or his partner is in receipt of income support, Chapter VI (capital) of Part V of and Schedule 10 to, the Income Support (General) Regulations (Northern Ireland) 1987;

(b)where the applicant or his partner is in receipt of income-based jobseeker's allowance, Chapter VI (capital) of Part VII of and Schedule 7 to, the Jobseeker's Allowance Regulations (Northern Ireland) 1996.

(c)where the applicant or his partner is in resipt of of State Pension Credit Part III (income and capital and Schedule V to the State Pension Credit Regulations 2002.

(d)where the applicant or his partner is in receipt of income-related Employment and Support Allowance ,Part10,Chapters 1 and 7 and Schedule 9 to, the Employment and Support Allowance Regulations 2008.

(3)For the purposes of paragraph (2), the following shall be disregarded in calculating the total capital resources:

(a)any payments made from the Family Fund to the applicant, his partner or children;and

(b)any integration loan granted to the applicant or his partner under The Integration Loans for Refugees and Other Regulations 2007 (S.I.2007/1598)as they have effect at june 2007

Treatment of capital

6600Any capital held by the applicant and partner of or below £1,000, (or £2,000 if the applicant or partner is aged 60 or over), will not affect the amount awarded as a Budgeting Loan (BL).

6601If the applicant and partner have capital of more than £1,000, (or £2,000 if the applicant or partner is aged 60 or over), a BL is reduced by the amount of any capital over £1,000, (or £2,000 if the applicant or partner is aged 60 or over).

6602Any capital held by the applicant's children should be disregarded.

6603Check the amount of capital stated on the SF application against information available from IS, ESA, JSA or SPC. Further enquiries will be needed only if:

there is a significant difference; and
the decision on the application might be affected

6604For the purposes of the Social Fund, the definition of what constitutes capital is the same as that for IS, income-related ESA, income-based JSA, or SPC except that any payments from the Family Fund and integration loans under The Immigration Loans for Refugees and Others regulations 2007 should also be disregarded. Any payment of Back to Work Bonus should be treated as capital.

6605The main types of capital are:

current accounts
savings accounts
national savings certificates
fixed term investments
life insurance or endowment policies
friendly societies personal deposit accounts
trust funds
property other than the applicant's home

6606This list is not exhaustive. Refer to the DMG for:

a complete list of types of capital
the procedures for assessing the capital available to the applicant

6607The IS ,ESA(IR), JSA (IB) or SPC rules for disregarding capital apply to BLs, except that any payments from the Family Fund and integration loans under The Immigration Loans for Refugees and Others Regulations 2007 should also be disregarded. Disregard arrears of, and concessionary payments made to compensate for arrears due to the non-payment of, the following benefits, payments and allowances:

mobility allowance,
mobility supplement,
the mobility component of DLA,AA,
the care component of DLA,
IncomeSupport,
income-related ESA
Working Families Tax Credit,
Child Tax Credit at a higher rate than the appropriate maximum family element, and/or Working tax credit where a disabled worker is included in the assessment,
Disabled Person’s Tax Credit,
Housing Benefit,
Council Tax Benefit,
income-based JSA (and, where a claimant is receiving JSA, contribution- based JSA),
State Pension Credit
any allowance paid under the Earnings Top-Up Scheme 1996
any discretionary housing payment paid pursuant to regulation 2(1) of the Discretionary Financial Assistance Regulations Northern Ireland 2001, and, where a claimant is receiving income support,
supplementary benefit,
family income supplement under the Family Income Supplements (Northern Ireland) Act 1971 and housing benefit under The Housing Benefits (Northern Ireland) Order 1983, but only for 52 weeks from the date of receipt of the arrears, subject to para 6608 below.

6608From 14 October 2002 the disregard that applies to arrears and concessionary payments referred to in para 6607 above will be extended from 52 weeks to the remainder of the benefit award of IS income-related ESA or income -based JSA if that is a longer period, in cases where there has been an official error and the total of arrears plus any concessionary payment is £5000 or more. This will apply to payments received in full on or after 14 October 2001.The extended disregard can be continued across benefit awards where a claimant transfers from claiming IS, income-related ESA or income- based JSA to the other benefit, or there is a change of claimant from one partner to another, but only where the new benefit award follows on immediately after the previous one.

6609-6649