Benefits claimants struggling to pay for essentials may be able to tap into a loan from the Department of Work and Pensions (DWP) to spread the cost.
People claiming certain DWP benefits can apply for a loan of up to £812, but the name of the loan and the way you apply for it depends on which benefits you claim.
Those who have been claiming Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance or Pension Credit for at least six months may be eligible for a Budgeting Loan.
Budgeting Loans are not available to those claiming Universal Credit, however, they may be eligible for a Budgeting Allowance. If someone has moved from Universal Credit to Pension Credit, the DWP will add the time they were getting Universal Credit to the six months, according to the Daily Record.
But remember, because the money is a loan, it must be paid back and is done so through benefit payments. Even if you come off benefits, the loan will have to be repaid. Find out more about eligibility on GOV.UK here.
A Budgeting Loan of Allowance can be used to help pay for essential things or services, such as:
- Household white goods such as a washing machine, cooker, hoover or fridge
- Clothing or footwear
- Rent you have to pay in advance
- Any moving house costs such as a removal van
- Essential work needed on your home, including maintenance
- Costs due to pregnancy and childbirth
- Costs for a funeral
In both cases, the lowest amount you can borrow is £100, and you could get up to the amounts below, depending on your circumstances:
- £348 if you’re single
- £464 if you have a partner
- £812 if you or your partner claim Child Benefit
How much you could get depends on whether you:
- Can pay the loan back
- Have savings of more than £1,000 (£2,000 if you or your partner are 63 or over)
- Are paying back an existing Budgeting Loan or Crisis Loan
The money is paid back in full to the DWP at 0% interest within two years. When the DWP pays your benefit, it will take an amount off to help pay your loan off. The amount taken depends on your total income, which includes any benefits you get and what you can afford.
How to apply depends on the benefit you claim.
To apply for a Budgeting Loan: Check your eligibility here. You can apply for a Budgeting Loan online or by post, however, the DWP guidance states: “You will get a quicker decision on your Budgeting Loan by applying online.” The DWP will either send you an email, text or letter letting you know whether or not you can get a Budgeting Loan and you you need to ‘accept’ the decision before you get the money. Once you have accepted the loan offer, the DWP will pay your money into your account.
To be eligible, all of the following must apply:
- You’ve been getting Universal Credit, Employment and Support Allowance, Income Support, Jobseeker’s Allowance or State Pension Credit for 6 months or more, unless you need the money to help you start a new job or stay in work
- You’ve earned less than £2,600 (£3,600 together for couples) in the past 6 months
- You’ve paid off any previous Budgeting Advance loans.
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