**Benefit News** - Changes to Crisis Loans.

[ErikaPNP]

The Crisis Loan system is being altered again from April of this year.

 

Awards for Crisis Loans to meet immediate living expenses will be restricted to a maximum of three in any rolling 12 month period. The rate paid will also be reduced from 75% of benefit to 60% (correction - refer to edit note) to tie in with the hardship rate.

 

Crisis Loans for household items will no longer be available although there will be some support for those who require necessery items as the result of a disaster such as a flood. It's not yet clear how this will work.

 

Other changes to the Social Fund which are planned for 2013.

 

Full article available here

Edited March 17, 2011 by ErikaPNP
60% not 65% as pointed out in post number 7

[Nystagmite]

So, how would someone pay for a cooker with no social fund loan and no / low income?

[ErikaPNP]

There remains the option of a budgeting loan or community care grant - for now. For those not on means tested benefit, the crisis loan will no longer be available for such items from April though there will be provision for the need to be met if there has been a disaster.

 

Apparently the spending on these awards have become so high that if it isn't reformed now, the discretionary budget (which covers Crisis Loans, Community Care Grants and Budgeting loans) would run out by Christmas. This appears on the link in my initial post:

 

Crisis Loans were set up to meet immediate short-term needs in an emergency. Yet in the last seven years there have been over seven million claims from 400,000 regular users applying for 10 or more crisis loans. Since telephone claims were introduced in 2006 daily spend on the loans has tripled to £1million a day.

 

As someone who assists people to secure welfare, I have seen a lot paperwork provided for SARs and appeal submissions in my time for Social Fund records and in view of what I've seen, that the above doesn't surprise me in the slightest. I said three years ago that this would happen. Well, actually what I said was that there would be significant reform if the Social Fund wasn't scrapped altogether. The figures I've seen in recent years on people's records for repeat claims have been shocking, compared to what they used to be. Some of it is people deliberately taking advantage of the system, and some of it is people who are incapable of budgeting for varying reasons. The changes I understand are necessery and are taken in mind that the most vulnerable in society will still receive help. Sadly I think that it is the most vulnerable people in the most desperate need that will suffer. And that's because those who have been taking advantage of the system over the years will continue to do so. They know how to work the system. The vulnerable will continue to struggle, and with Welfare centres closing down in droves - also due to funding issues - they are even less likely to get the help they so desperately need to apply for what they need.

[flumps1976]

It would either be an application for a Community Care Grant or a Budgeting Loan.

The money made available to Crisis Loans has been reduced the same as everything else

[flumps1976]

We have been saying at work for years that unfortunately the Social Fund is abused by some people who do know how to work the system but also Crisis Loans can be detrimental as they do have to be repaid which leaves those on a low income on an even lower income which can result in them applying for a further crisis loan and so on and so forth. It's a vicious circle.

Rent in Advance is the latest thing to be abused.

[Guest jsa12]

i don't buy into the idea it has been,if people had the means they wouldn't use that payment method,its little more then tabloid sensationalism such as this typical extract.

 

http://www.express.co.uk/posts/view/228943/End-hole-in-wall-benefit-loansEnd-hole-in-wall-benefit-loansEnd-hole-in-wall-benefit-loans

 

poverty is sadly a by product of the mass unemployment that has developed over the past thirty years,its very sad that an economy that is basically in tatter and that the poorest and most vulnerable come under the spotlight for political mischief,this has gone even further with the trussel trust box of uncookable items that the poorest are likely to be on credit meters' and donated by dubious poster campaigns that fail to inform that the shopper is propping up the welfare system and the government is circumventing its responsibilities under the walfare state.

 

this is totally unacceptable behavior given the job market has collapsed,that there or has been no investment in skills leaving many facing a life on benefits' as a result of not even having basic skills',this on top of those with mental health problems' and those disabled that face equal barriers'.

[itsjustmal]

It has been reduced but not to 65%... its been reduced to 60% actually and the 'Rent in Advance' system has been changed drastically too.

[ErikaPNP]

It has been reduced but not to 65%... its been reduced to 60% actually and the 'Rent in Advance' system has been changed drastically too.

 

Woopsie! I made a mistook. Thank you for pointing that out, I've corrected it now so as not to mislead others.

[itsjustmal]

I forgive you... ERIC wouldnt though.. lol