Social fund loans

Who qualifies and what for - advice from Working Families

The Social Fund makes two types of payment, regulated and discretionary.

The Sure Start Maternity Grant is an example of a regulated social fund payment, others are funeral expenses payments, cold weather payments and winter fuel payments. Regulated payments have rules about who is eligible, and if you meet these conditions then you will always get the payment. You don't have to pay regulated payments back.

Discretionary payments are different to most other benefits in that there is no legal entitlement or right to appeal, they depend on the priority of your needs. This is decided by an officer at your local Jobcentre Plus. In addition they are budget limited, so if your local office has used up its budget you will not get anything.

Discretionary payments include Community Care Grants, Budgeting Loans and Crisis Loans. As the names suggest, Budgeting and Crisis Loans have to be paid back. They are paid back by deducting an amount from your weekly benefit.

Community Care Grants are grants to help people live independently in the community, but they can only be paid in certain circumstances. These include helping someone who has left residential or institutional care to set up home in the community, or helping prevent them going into care, or in some cases helping people who have been homeless.

They can also be paid to 'ease exceptional pressures' on you and/or your family. This is a very wide category. You should think about what would happen if you did not get the help, for example, would there be a risk to health?

Community Care Grants can also be paid for certain travel expenses, for example to visit someone who is ill or attend a relative's funeral. You can get more information about when you can apply for a Community Care Grant from other advice agencies like the Citizens Advice Bureaux. Community Care Grants do not have to be paid back, so it always a good idea to ask for one of these first if you can.

Budgeting Loans are to help people who have been on Income Support, income based Jobseeker's Allowance or Pension Credit for more than a few months. They can only be paid for certain types of one-off expenses; categories include furniture, clothes, rent in advance to secure accommodation and expenses you might have with looking for or going back into work. You must be able to repay the loan.

Crisis Loans are to help you if you do not have the resources to meet your family's immediate short term needs. You do not have to be on benefit. They can usually only be paid if you have expenses because of an emergency or a disaster, and the Crisis Loan is the only way to prevent serious damage or serious risk to health.

The only other time you can apply for a Crisis Loan is if you are getting a Community Care Grant when you leave care and you need rent in advance for a landlord. You must be able to pay the loan back.

You cannot borrow more than £1500 from the social fund at any one time. The main advantage of social fund loans over commercial loans is that they are interest free.

There are many rules about who can get payments from the social fund and what they can be spent on. These rules are complicated; you should see a specialist benefits adviser, such as at a Citizen's Advice Bureau to find out more.