People receiving certain benefits who are in need of extra financial support could claim hundreds of pounds from the Department for Work and Pensions (DWP). Known as a Budgeting Loan, this money can be granted to eligible people who are in need of some help paying for essential goods or services.
Around £812 is available to those receiving income-based Jobseeker's Allowance (JSA), Coventry Live reports, as well as income-based Employment and Support Allowance (ESA), Income Support and Pension Credit. To be eligible, you must have been receiving one of these benefits for at least six months.
It's also worth noting that it will all have to be repaid and this will be done via deductions to your future benefit payments.
Read more: Full DWP £1,350 cost of living payments - who is eligible and when they arrive
Budgeting Loans are not available to those claiming Universal Credit, however some Universal Credit claimants may actually be eligible for a Budgeting Allowance, the Daily Record reports. And for those who have moved from Universal Credit to Pension Credit, the DWP will add the time they were receiving Universal Credit to the six months.
Another rule is that those on New Style Jobseeker's Allowance and New Style Employment and Support Allowance are not able to apply. You also cannot receive a Budgeting Loan if you have a job and are currently involved in a trade dispute.
Fortunately, new and up to date guidance on Budgeting Loans and how it can impact your future benefits has been issued by the government:
Budgeting Loans and what they can be used 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
Budgeting Loans – how much you could receive
The lowest amount you can borrow is £100. 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 your Budgeting Loan
There is no rush, which is the first thing to note. 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.
Read next:
- DWP cost of living spring payment: Those not eligible and why
- DWP cost of living payments: 8 million families to receive first £301 this spring
- DWP list of 21 health conditions that PIP claimants could get up to £4,800 for
- DWP: Universal Credit threshold sees new rules which could affect working hours and benefit payments
- DWP urges millions of households to check for £600 cash payment
