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Major changes to simplify and speed-up the social fund budgeting loan scheme have been announced by social security...
Major changes to simplify and speed-up the social fund budgeting loan scheme have been announced by social security minister Angela Eagle.

The improvements will make it easier for people to apply for a loan, and make decisions quicker, fairer and clearer to understand.

In answer to a parliamentary question Ms Eagle said:

'The changes to the social fund budgeting loan scheme will be introduced on 5 April 1999. Applications for social fund budgeting loans will be decided according to a few simple set factual criteria, rather than the discretion of the officer deciding the application. This will mean that those on the lowest incomes who apply for a loan

will no longer be asked detailed questions on what they intend to do with the money before a decision can be made.

'In keeping with the government's aims for an active modern social security service, these changes will make the applications process much simpler, and the decisions process quicker, fairer, less intrusive and easier to understand, while administration of the scheme will be more cost-effective. In connection with these changes, I am, today, placing in the house library copies of the updated Social Fund Guide containing the revised secretary of state directions and guidance to social fund officers on the new scheme.

'We can also announce that the total discretionary social fund budget for 1999/2000 will be£535.2m, representing an increase of£34m over the corresponding budget for 1998/99. Of this total,£98m will be allocated to community care grants,£436.7m to loans and£0.5m will be set aside as a contingency reserve. To further improve

the fairness of the social fund scheme we shall be allocating the loans budget to each Benefits Agency district with a view to achieving greater consistency in the level of successful applications across districts.

'Full details of budget allocations to individual Benefits Agency districts will be placed in the house library on 24 March.'


1. The social fund helps people with expenses which are difficult to meet from their regular income. Help is given in the form of a grant or interest-free loans.

2. Interest-free budgeting loans provide flexible help for items or services that are difficult to budget for. They are available to people on income support or income-based jobseeker's allowance for at least 26 weeks.

3. Interest-free crisis loans are available to help people facing an emergency or disaster, where there is a serious risk to health or safety, whether they are in receipt of benefit or not.

4. Community care grants from the social fund are intended to help people in particular circumstances to live independently in the community.

They are available for people in receipt of income support or income-based jobseeker's allowance, or be likely to receive it when they come out of institutional or residential care.

5. When considering an application for a loan or grant, social fund officers must determine it in accordance with thesecretary of state's directions and guidance.

6. The discretionary social fund expenditure on budgeting loans (BLs), crisis loans (CLs) and community care grants (CCGs) for the last three years:


£m £m £m

1995/96 250 55 96

1996/97 284 52 96

1997/98 311 54 97

The discretionary social fund awards on budgeting loans (BLs), crisis loans (CLs) and community care grants (CCGs) for the last three years:


1995/96 921,000 832,000 275,000

1996/97 923,000 765,000 251,000

1997/98 916,000 803,000 234,000

7. Funeral payments provide help with funeral expenses where someone has been awarded a qualifying benefit and has good reason for taking responsibility, but they have insufficient funds to meet such a large expenses. The allowable amount covers the reasonable cost of specified items, including necessary burial or cremation charges, plus up to£600 for other funeral expenses.

8. Maternity payments are paid to people awarded a qualifying benefit. A payment, up to£100, is made for each child expected, born, adopted, or subject to a parental order, towards the additional expenses associated with a new baby.

9. Cold weather payments of£8.50 are paid to people awarded income support or income-based jobseeker's allowance whose benefit includes a pensioner or disability premium, or if they have a child under the age of five, when either the recorded, or forecast, temperature criteria is met for their postcode.

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