Departments Directions Social Fund GuidePart 4 - Budgeting Loans
General
6000 Budgeting Loans (BLs) are intended to help those in receipt of Income Support (IS), income-based Jobseekers Allowance (JSA(IB)), Income-related Employment and Support Allowance (ESA(IR)), State Pension Credit (SPC) or payment on account of such benefits to spread the cost of intermittent expense over a longer period. They represent an interest-free credit facility for those in need of financial assistance to cope with such expenses.
6001 Unlike Community Care Grants (CCGs) and Crisis Loans (CLs), they are not limited to people facing special difficulties arising from special circumstances. However, BL awards are still subject to an overall cash-limit.
6002 As with CLs and CCGs, decisions on whether to award BLs and, if so, how much to award will be based on relevant facts.
6003 For CLs and CCGs, primary legislation provides for 'all the circumstances of the case' including 'the nature, extent and urgency of the need' to be taken into account.
6004By contrast, for BLs, the Social Security Contributions and Benefits Act 1992 (as amended by the Social Security Order(NI) 1998) provides for the applicant's personal circumstances, as specified in Directions by the Department, to be taken into account.
6005-6019
The Department's Directions 6020 The Department has issued directions which qualify the power to make Budgeting Loans (BLs) by reference to:
- the eligibility of the applicant
- whether the item applied for falls within one of the specified categories
- the applicant’s personal circumstances
- the basis on which awards are made
- the effect of capital
- the maximum and minimum amount which can be awarded
- the budget allocation
These directions are binding
6021BL decisions are based on:
- eligibility criteria:
- whether the applicant meets the qualifying benefit conditions - Direction 8
- qualifying conditions:
- whether the application is in respect of an item of expense for which a BL may be awarded - Direction 2
- Direction 2 is broad enough to encompass most routine periodic expenses and it will be rare to refuse an application on this direction alone
- applicant's personal circumstances - Direction 50
- specified weightings for personal circumstances - Direction 52
- budget
- to have regard to the national loans budget (the relevant allocation) by applying the current budgeting loan baseline figure issued by the Department and notified by the ADM -Direction 40 and 41.
- amount of award
- how much should be awarded? - Directions 53
- whether the amount of the applicant's capital affects the amount of the award? -Direction 9
- repayability
- section135(4) repayment terms as determined by the Department and agreed with the applicant.
- consider the applicant's ability to repay - Directions 5 and 11
6022-6059
6060A BL should be applied for on the appropriate application form, though it can also be made in such other manner, in writing, as the Department accepts is sufficient in a particular case.
6061The BL application form asks for simple facts relevant only to the scope of the BL scheme. It is not therefore intended that a BL application can result in anything but a BL decision
6062 If an applicant asks on a BL application form for the application also to be considered as a CCG, or information on the form (or local knowledge) suggests a CCG application might succeed, the applicant should be invited to apply on the appropriate form.
6063The BL application should then be processed in the normal way.
6064On receiving a BL application, check that it has fully completed. If it has not you are advised to try to obtain the relevant information by phoning the applicant and if this is unsuccessful, to write to the applicant to obtain the relevant information. The application should not be refused at this stage.
6065When the relevant information is received, the application should be processed without delay.
6066An application may be refused without consideration of the applicant's personal circumstances where the applicant:
- is not in receipt of Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, State Pension Credit or payment on account of such benefits;
- has not been in receipt of Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, State Pension Credit or payment on account of such benefits for 26 weeks;
- is involved in a trade dispute as described in direction 8(i)(b);
- has applied for a category of items that is outside the scope of the scheme; or
- has sufficient capital over and above the amount allowable (£1000 or where the applicant or partner is 60 or over £2,000) to meet the full amount requested.
Determining an application - Establishing the facts to be taken into account6067Facts which relate to the applicant's specified personal circumstances and position under section 136 (1)(b)-(e) must be taken into account. It will be the applicant's responsibility to provide such information on the application form as may be required.
6068In practice, relevant circumstances relating to qualifying benefit records will be retrieved automatically by SFCS when the application is processed. However you should bear in mind that benefit can be administered clerically.
6069Since BL decisions will be based on a limited number of personal circumstances, the processing of decisions will, in practice, be largely automated on SFCS. Check that the applicant's circumstances are reflected correctly and then record the decision accordingly.
6070-6089
Joint Claims for Jobseeker's Allowance6090Certain childless couples making new or repeat claims for JSA are required to make their claim jointly. The group of claimants who are affected by this requirement are defined by age: at least one of the couple (“joint claim couple”) must be over 18 and born on or after 28th October 1957.
6091Under the Jobseeker's Order and associated Regulations both members of a joint claim couple will be required to meet the JSA entitlement conditions and will each have equal rights and responsibilities. In effect, they will both be claimants.
6092Where one member of the couple does not meet the JSA conditions the "innocent" member of the couple will be able to get JSA at the single person's rate. If the entitlement conditions are met, the couple will receive joint claim JSA (which is JSA(IB)).
6093The couple will have to nominate which of them will receive benefit for them both. In the event of the nominated person being sanctioned, then payment of joint claim JSA will be automatically paid to the member of the couple who is not subject to sanction.
6094In order to ensure that only the person who is being paid JSA(IB) is eligible for a BL a provision has been introduced which defined how "in receipt of" should be interpreted in directions. This provision can be found at the beginning of the Department's directions in Part 8. This means that the member of a joint claim couple who is being paid joint claim JSA on behalf of the couple is the only member who can be eligible to apply for a BL.
6095Direction 8(1)(c) will apply to joint claim couples and therefore the total period of any joint claim will benefit both members equally for BL eligibility.
6096DMs must therefore ensure that when dealing with applications from a member of a joint claim couple, they identify that the applicant is the member of the couple who is being paid joint claim JSA.
6097-6149
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