Budgeting Loans from the Social Fund

Applies to: England, Wales, Scotland and Northern Ireland

Who does it help?

Budgeting Loans help people on a low income to pay for essential items like furniture, household equipment or clothing, travel costs, home repairs or improvements, rent upfront or removal costs to a new place, costs of looking for or starting work and hire purchase or other debts you may have in relation to the items above.

The money comes from the Social Fund. They decide whether you can have a loan by looking at:

Your circumstances, and
Any existing Budgeting Loan you owe, and
Your savings, and
Your ability to pay back the loan.

It also depends on how much money they have in their local budget.

If you are given a Budgeting Loan, it has to be paid back but you do not have to pay interest on the loan. They will tell you what the repayment rates will be. A loan should normally be repaid within two years.

A Budgeting Loan does not count as income and will not affect other benefits you get.

Is it means-tested?

You can only get a budgeting loan if, on the day you apply, you are getting:

You must have been receiving one of these benefits, or have been the partner of someone receiving one of these benefits, for at least 26 weeks (breaks of not more than 28 days are disregarded).

You cannot get a full Budgeting Loan if you or your partner have more than £1,000 in savings. This amount is £2,000 if you or your partner is over state pension age. This used to be 60 for a woman and 65 for a man but this is changing for a lot of people. You can work out the exact date of your state pension age by using the state pension age calculator (link opens in a new window) on the Government's Directgov website.

What help does the benefit provide?

A Budgeting Loan is only for certain essential items or services. You can apply for help with the following categories of expenses:

Furniture and household equipment, clothing and footwear
Rent in advance or removal expenses to new accommodation
The costs of improvement, maintenance and security of your home
Essential travelling expenses and expenses due to you getting or starting a job
Hire purchase payments and other debts, but only if the money was borrowed for expenses in any of the other categories.

Before you apply for a Budgeting Loan, check whether you can apply for a Community Care Grant, a Sure Start Maternity Grant or a Funeral Payment, as these grants do not have to be paid back.

In Northern Ireland, see the NI Direct website for an online claim form and other information about claiming (link opens in a new window).

How much does it pay?

The minimum amount of budgeting loan that you can get is £100 and the maximum amount is £1,500. You cannot get more than they think you can pay back.

The money will be paid into your bank or building society account. In some cases it can be paid at a post office.

Is this a taxable benefit?

A budgeting loan is not a taxable benefit.

How to claim

Apply for a budgeting loan on form SF500, which is available from local benefit offices. In England, Wales and Scotland, you can download the claim form SF500 (PDF file size 216kb) (link opens in a new window) from the Department of Work and Pensions website.

In Northern Ireland, you can download a copy of the Budgeting Loan form for Northern Ireland (link opens in a new window) from the NI Direct website

You do not have to say exactly what you need or why. However, you must say the category of the expenses for which you want a loan and the amount of money you need.