Receiving income related benefits? You could get a £812 budgeting loan from the state

Budgeting loans can be provided by the government so long as the claimant meets certain criteria. To receive a budgeting loan, the claimant must have been getting at least one of the following benefits for the previous six months:

Income Support
Income-based Jobseeker’s Allowance
Income-related Employment and Support Allowance
Pension Credit

For those who have moved onto universal credit from a previous benefit, any time spent claiming universal credit will count towards the six months time frame.

However, new claimants of universal credit will not be able to receive a budgeting loan, they must apply for a budgeting advance instead.

It is also impossible to receive a budgeting loan if the claimant is involved in industrial action such as strikes, walkouts or lockouts.

If the claimant owes more than £1,500 in total for crisis loans (which are no longer available) and budgeting loans than it will not be possible to receive further help.

The amount received will vary on the individual claimant’s circumstances.

The lowest amount that can be borrowed is £100. However, it is possible to receive up to £348 for single people, £464 for claimants in a partnership or £812 if the claimant or their partner receives child benefit.

Aside from these parameters, the amount given could also depend on certain financial factors.

The government detail that the amount lent could vary due to the claimant’s ability to pay the loan back, if they have savings of more than £1,000 or if they are paying back an existing budgeting loan or crisis loan.

The rules concerning repayments appear to be relatively relaxed.

Any budgeting loan is always interest free, meaning that only what is borrowed is paid back.

The repayments themselves will be taken automatically from whatever benefits the claimant is receiving. The actual amount repaid is based on the claimant’s income and what they can afford.

The repayments occur weekly and will be explained in a letter provided after the initial application. The loan is usually repaid within two years and if the claimant comes off benefits, they will be expected to arrange alternative repayment options.

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