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Nottingham Post

National

Karen Antcliff & Linda Howard

DWP loans worth up to £812 for people claiming certain benefits

DWP Universal Credit GovUK

With finance and money at the heart of many worries as well as many debates at the moment, knowing exactly what is available to help households get through the cost of living crisis is essential. People claiming certain benefits from the Department for Work and Pensions (DWP) may be eligible for a loan worth up to £812 to help pay for essential products or services which they would otherwise be unable to be afford due to their current circumstances.

The Government-backed loan can help pay for essential items ranging from such things as home maintenance to maternity costs. On the list are other items such as clothes or footwear, travelling costs... even funeral costs. Loans would have to be repaid over a two-year period.

Named a Budgeting Loan, the assistance may be available to 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. While this criteria may put you in line for eligibility for the loan, it should be remembered this doesn't guarantee you will receive the okay and you should remember it is a loan and will have to be repaid through deductions from your benefits.

According to a report by Nottinghamshire Live sister publication, Daily Record, 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. New easy-read online guidance, which could potentially help more people access the service, has been published and simplifies the process including eligibility, what it can be used for and how it is paid back to the DWP.

An easy-to-read breakdown of the Budgeting Loans is detailed below, however, more information and details of how to apply may be found on the Government website. Here's what you need to know.

A Budgeting Loan - what is it?

A Budgeting Loan is cash that people who have been claiming the above benefits for at least six months can apply. It is financial help from the DWP but it is important to be aware that because it is a loan, the money must be paid back and is done so through benefit payments.

Who cannot apply for a Budgeting Loan?

People claiming these benefits cannot apply:

New Style Jobseeker’s Allowance
New Style Employment and Support Allowance

If you have a job and are currently involved in a trade dispute, you cannot get a Budgeting Loan. You cannot get a loan if you owe more than £1,500 in total of Crisis Loans and Budgeting Loans. Find out more about eligibility on GOV.UK here.

What items can you use a Budgeting Loan for?

The loan is to help pay for essential things or services.

This might include:

Furniture in your home
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
Security for your home, such as new keys or locks
Some travelling costs in the UK
Things that will help you get a new job, such as a suit for interviews or taxi fares to get to an interview
Costs due to pregnancy and childbirth
Costs for a funeral

How much you could get

The lowest amount you can borrow is £100. What you can get will depend upon your circumstances.

You could get up to:

£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

Paying back a Budgeting 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. If you stop getting benefits, the rest of your Budgeting Loan must still be repaid. If you can get a loan, the DWP will also tell you how much your weekly repayments will be from your benefits and if you accept, your weekly repayments from your benefit will start straight away.

How to apply

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.”

What happens after an application is made?

The DWP will either send you an email, text or letter letting you know whether or not you can get a Budgeting Loan - you must request which method of notification when you apply. It is worth noting if you requested a decision by email or text message, you will get this within seven days. If you asked for a decision by letter, it will be sent within 21 days.

How to accept a loan

If you can get a Budgeting Loan, you need to ‘accept’ the decision before you get the money.

How you ‘accept’ your decision depends on how you applied:

If you applied online, you will get a text message or email telling you what to do
If you applied by post, you can accept the decision by letter

Once you have accepted the offer

Once you have accepted the loan offer, the DWP will pay your money into your account, but when you get your money depends on how you accepted your loan offer.

If you: