Crisis Loans
- If you have recently applied for a Crisis Loan or a Community Care Grant
- Who can apply for a Crisis Loan
- If you have any other means of help
- Needs which are not covered by a Crisis Loan
- What Crisis Loans cover
- Priorities for Crisis Loans
- Crisis Loans - How much?
- Repaying the Crisis loan
- How to apply for a Crisis Loan
- How you will be paid
- If your application for a Crisis Loan is refused
- Further Loans
A Crisis Loan is an interest-free loan made from the Social Fund to help you meet an immediate short-term need in an emergency or as a consequence of a disaster. A decision maker will decide if you should get a Crisis Loan. You have to show that a Crisis Loan is the only way that serious damage or risk to health or safety of you or your family can be avoided. You do not have to be getting Income Support, Jobseeker’s Allowance, Pension Credit or any other benefit or entitlement to apply.
In certain circumstances, you may be able to get a Crisis Loan if you need help with paying rent in advance to a landlord (not the local authority). But to qualify for this help you must be moving out of residential or institutional accommodation and have been awarded a Community Care Grant to establish you in the community.
If you have recently applied for a Crisis Loan or a Community Care Grant
If you have applied for a Crisis Loan or grant from the Social Fund for the same item or service within the previous 26 weeks, and there has not been a relevant change of circumstances, then you will not get a Crisis Loan. But we will consider a Crisis Loan if there has been a relevant change of circumstances or if you did not take up a previous offer of payment.
Who can apply for a Crisis Loan
You do not have to be getting any kind of benefit or entitlement in order to apply for a Crisis Loan, but you must be aged 16 or over to get one. The conditions for a Crisis Loan are strict. By law, an award of a Crisis Loan must be to help meet expenses in an emergency or because of a disaster. And must be the only way of preventing serious damage or serious risk to the health or safety of a person or their family. For every application, we will look at all the circumstances and decide whether those conditions are met.
The only time we do not apply those conditions is when an applicant gets a community care grant on leaving care and has an immediate need for rent in advance.
Some people in certain circumstances cannot have a Crisis Loan . These are:
- residents in care homes (within the meaning of specific Acts) with no plans for discharge within 2 weeks
- hospital in patients with no plans for discharge within 2 weeks
- people lawfully detained or on release on temporary licence
- members of a religious order who are being fully maintained by it
- people treated as in full-time relevant education
There are also limits to the kind of Crisis Loan expenses some people in certain circumstances can get:
- certain students and people from abroad can only get an award because of a disaster
- certain people whose benefit claim is disqualified, disallowed or sanctioned can only get an award because of a disaster; outside of this, they can only get expenses for cooking or space heating (including fireguards).
If you have any other means of help
When deciding your application for a Crisis Loan, we will want to know whether you have any other possible sources of help to cover the costs of the crisis. If you do, then the amount of money you get will be affected. You may either get a reduced amount, or you may not get any at all. You will be asked, as part of your application, about such sources of money, for instance:
- any savings
- any earnings
- any other income
- cash in hand
- readily available funds in bank or building society accounts
- any sources of credit such as cash cards, store cards, credit cards, cheque cards, cheque accounts, overdraft facilities, loan arrangements (if you are getting Income Support, income-based Jobseeker’s Allowance or Pension Credit, then you will not be expected to use these sources of credit)
- any help which is likely to be available quickly from other people such as employers, relatives, close friends, charities and benevolent funds (but such help will only be considered if it looks certain that it will be available – sources of help such as employers or relatives will not automatically be suggested as alternatives to a Crisis Loan).
Housing Benefit, your home and personal possessions will not normally be counted. We may also decide it is reasonable not to count other money or assets in the circumstances of a particular case.
Help from the local council
If your local council is responsible for dealing with disasters in its area, from those which affect only a single house (for example, a gas explosion) to those which could cover a large area (for example, floods or leaks of chemicals in the atmosphere), you are unlikely to get a Crisis Loan if the local council can give immediate help.
Needs which are not covered by a Crisis Loan
You will not get a Crisis Loan for the following:
- a need which occurs outside the United Kingdom
- or an educational or training need including clothing and tools
- or distinctive school uniform or sports clothes for use at school or equipment to be used at school
- or travelling expenses to or from school
- or school meals taken during school holidays by children who are entitled to free school meals
- or expenses in connection with court (legal) proceedings such as legal fees, court fees, fines, costs, damages, subsistence or travelling expenses (other than emergency travelling expenses when stranded away from home)
- or removal or storage charges if you are being rehoused following a compulsory purchase order, a redevelopment or closing order, a compulsory exchange of tenancies, or under a housing authority’s statutory duty to the homeless
- or domestic assistance and respite care
- or any repair to council property and, in the case of Scotland, any repair to property of certain housing trusts
- or a medical, surgical, optical, aural or dental item or service (these needs can be provided free of charge by the National Health Service, if you are getting Income Support, income-based Jobseeker’s Allowance or Pension Credit (which includes the guarantee credit))
- or work related expenses
- or debts to Government departments
- or investments
- or purchase, installation, rental and call charges for a telephone
- or mobility needs
- or holidays
- or a television or a radio, or a licence, aerial or rental charges for a television or a radio
- or garaging, parking, purchase, and running costs of any motor vehicle except where the payment is being considered for emergency travel expenses
- or housing costs, (other than intermittent costs not met by Housing Benefit, Income Support, income-based Jobseeker’s Allowance or Pension Credit, certain rent in advance payments, certain boarding charges, and minor repairs and improvements)
- or council tax, council water charges, arrears of community charge, collective community charge contributions or community water charges.
What Crisis Loans cover
Because a Crisis Loan is intended to cover immediate short-term needs arising in an emergency or because of a disaster, an award may be for a specific item or service or meet immediate living expenses for a short period, usually up to 14 days.
The following are examples of what might be considered to be a crisis, and for which a Crisis Loan may be awarded:
- a disaster, causing damage, loss or destruction to possessions or your property
- or loss of money, for example through a robbery or burglary
- or waiting for the first payment of Income Support, income-based Jobseeker’s Allowance, Pension Credit or payment on account of one of these benefits or entitlements, with no money at all to live on
- or emergency travel expenses for someone who is stranded away from home.
Please remember that these are just examples and a Crisis Loan may not necessarily be appropriate. Similarly, if a situation is not mentioned, it does not mean you would not get help. We will look at the individual circumstances of an application. We will consider if a Crisis Loan is the only means by which serious damage or serious risk to you or your family may be prevented in an emergency or because of a disaster.
Priorities for Crisis Loans
Crisis Loans are paid from the same budget as Budgeting Loans. However, if we decide that you qualify for a Crisis Loan to prevent serious damage or serious risk, your application will always be given a higher priority than all other loan applications which have not been decided using these conditions.
How much?
We will decide the size of the loan you need.
A Crisis Loan is intended to help you over a period of crisis, it may not necessarily solve the crisis altogether. We will decide how much money you need to get you through the crisis, which may not mean replacing all the losses and repairing all the damage.
There is no minimum amount that you can be paid as a Crisis Loan.
Maximum amount for living expenses
For you and your partner, the maximum amount that you can get as a Crisis Loan for living expenses is an amount equivalent to 75 per cent of the Income Support or income-based Jobseeker’s Allowance personal amount appropriate in your circumstances.
This maximum amount may also be reduced if you have been awarded the hardship rate of Jobseeker’s Allowance. The amount of the reduction will depend on the amount of Jobseeker’s Allowance you would get.
The amount you can get for any child is the same amount as the Income Support allowance payable for children up to the first Monday in September following their 16th birthday.
Maximum amount for services or items
The maximum amount you can get as a Crisis Loan for items or services will be the lower of:
- the full cost of the repair, if the item can be repaired (unless the cost of replacement is lower)
- or the full cost of purchasing the item or service, including delivery and installation.
If you are not getting Income Support, income-based Jobseeker’s Allowance or Pension Credit, we may also consider a loan for the minimum amount necessary to obtain the item or service for you on deferred repayment terms (for example, hire purchase).
In any of these cases, the maximum amount you can get depends on what you can afford to repay. There is an overall maximum of £1,500 and we will also take into account any sums you may still owe to the Social Fund. So if, for example, you already owe £400 from a previous loan, the most that you could be paid as a Crisis Loan would be £1,100.
Deciding the amount
We may query the amount of money you are applying for if, in our opinion, it seems too much for your needs.
Repaying the Crisis Loan
You should not have to start repaying the loan until the crisis is over. You will be expected to repay it over an agreed period of time. Repayments will be made by deductions from your Income Support, income-based Jobseeker’s Allowance or Pension Credit, as long as you get Income Support, income-based Jobseeker’s Allowance or Pension Credit. If you or your partner do not get or stop getting Income Support, income-based Jobseeker’s Allowance or Pension Credit, then deductions can be made from other benefits or entitlements (for a full list of these).
If the benefits or entitlements you get are not enough for deductions to be made to repay the Crisis Loan, or if you are not getting any form of benefit or entitlement, then repayment may be made by cash, cheque or postal order.
Even if you are not getting any form of benefit or entitlement, you will still be expected to pay back the loan at the same rate which you agreed when the loan was taken out. If you become able to pay off all the loan in a lump sum, you can do so.
Repayment rates
We will decide at what rate you should repay the Crisis Loan and how long the repayment will take. There are 3 standard rates of repayment which normally apply. The rate in your case will depend on financial commitments.
The rates are equivalent to 12 per cent, 10 per cent and 5 per cent of your weekly
- Income Support available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Jobseeker’s Allowance available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Pension Credit (and including Child Benefit and Child Tax Credit where appropriate)
excluding any housing costs.
Repayment at 12 per cent rate
If you have no other debts to repay, you will be expected to pay an amount equal to 12 per cent of your weekly
- Income Support available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Jobseeker’s Allowance available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Pension Credit (and including Child Benefit and Child Tax Credit where appropriate)
excluding any housing costs.
Repayment at 10 per cent rate
If you have some other payments to make from your benefit, such as rent or fuel arrears, the repayment rate may be lowered to 10 per cent of your weekly
- Income Support available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Jobseeker’s Allowance available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Pension Credit (and including Child Benefit and Child Tax Credit where appropriate)
excluding any housing costs.
Repayment at 5 per cent rate
If your commitments are larger (for example, you have higher payments to make from your benefit or are repaying several personal debts) the repayment rate will normally be 5 per cent of your weekly
- Income Support available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Jobseeker’s Allowance available income (and including Child Benefit and Child Tax Credit where appropriate)
- or Pension Credit (and including Child Benefit and Child Tax Credit where appropriate)
excluding any housing costs.
Repayment periods
The total debt should normally be paid back within 104 weeks (2 years).
If you are having difficulty making the repayments
If you cannot make the repayments at the rate originally agreed we may be able to help, for example by extending the repayment period to reduce your payments. You should contact your Jobcentre Plus office for advice. If you are repaying your Crisis Loan to the Department’s Debt Management organisation, you should contact them.
How to apply
You should contact your Jobcentre Plus office about making an application.
You may be able to make your application by telephone.
We will deal with your application as soon as possible, and you will be given a letter telling you about the decision. If you are offered a loan, the letter will tell you the amount of money you will get and the rate at which you will repay it. You will be asked to sign this letter, showing that you understand the repayment terms and that you have to repay the loan.
If you are away from home
Normally you should apply to your local Jobcentre Plus office for a Crisis Loan. But if you are stranded away from home and you need a Crisis Loan, you should apply to the nearest Jobcentre Plus office.
For details of the nearest Jobcentre Plus office look for the display advert in the business numbers section of the local phone book
How you will be paid
Crisis Loans will usually be paid by cheque, made out in your name, which you can cash at a post office or pay into your bank or building society account.
Payment to someone else
If you have applied for a Crisis Loan, but would like this to be paid to someone else, this can be done. The loan can be made out to someone else if there is a good reason to do so – for example, if you need someone to look after your money for you.
If your application is refused
There are several reasons why your application may be refused. We may decide that there are other ways in which you can meet your need or that the item or service which you want a loan for may not be covered by Crisis Loans.
If you are dissatisfied with the decision
If you are unhappy about a decision, you can ask for a review.
Further Loans
If you already owe money to the Social Fund from a previous loan, you may get another one if we agree you need one and are satisfied that you can afford the repayments.