If you are struggling to make ends meet and you receive certain benefits, you may be able to get some extra cash from the Department for Work and Pensions.
People on some DWP benefits may be eligible for a budgeting loan. These loans can help you cover costs of essentials such as rent, clothing and home maintenance.
So, how can you get this cash support and who is eligible? This guide provides all the information you need as well as details of how you can apply, reports Birmingham Live.
Read More: Child maintenance payments and if they affect your DWP Universal Credit benefit
What is a DWP budgeting loan?
A budgeting loan is a type of loan that can help households receiving some DWP benefits to pay for essentials. The cash must be repaid over two years, but with no interest added - recipients are only required to pay back the same amount they’ve borrowed, via deductions from their benefit payments.
What can you use a budgeting loan for?
It can help you pay for a range of essential purchases and costs. These include the following, according to the government’s website :
- Furniture or household items (including white goods such as washing machines)
- Clothes and footwear
- Rent in advance
- Costs associated with moving house
- Home maintenance, improvement and security costs
- Travelling expenses within the UK
- Costs associated with getting a new job
- Maternity costs
- Funeral expenses
- Repaying hire purchase loans
- Repaying loans taken to cover the costs listed above
How much can you get as a budgeting loan?
If you’re eligible, you can get up to £348 as a budgeting loan if you’re single, £464 if you’ve got a partner or £812 if you and your partner claim Child Benefit. The minimum amount you could borrow is £100.
However, how much you can borrow as a budgeting loan will depend on other factors, including your ability to repay it, whether you’re repaying an earlier budgeting loan or crisis loan, and whether you have savings of more than £1,000 (or £2,000 if you or your partner are aged 63 or over).
Who can apply for a budgeting loan?
You can apply for a budgeting loan if you’ve been on some DWP benefits for the last six months. These benefits are as follows:
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Pension Credit
For claimants who’ve been moved from Universal Credit to Pension Credit, any time you spent on Universal Credit will count towards the six-month period required for a budgeting loan. Those on Universal Credit cannot get a budgeting loan but a similar payment called a budgeting advance is available instead. It has to be paid back within a shorter period of 12 months.
How to apply for a budgeting loan
If you meet the eligibility criteria, you can apply for a budgeting loan online here. Alternatively, you can fill out a paper form.
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