Budgeting loans

This content applies to Scotland only.

Housing laws vary between Scotland and England. This page applies to Scotland only. Get advice relating to England

A budgeting loan can help you spread the cost of essential items over a more manageable period. You may be eligible for a loan if you are claiming income support, jobseeker's allowance or pension credit.

What is it?

A budgeting loan is an interest-free loan from the social fund, which you can apply for if you need help paying for:

• furniture or household equipment
• clothing or footwear
• rent in advance for a new home
• removal expenses
• travel expenses
• things to help you look for or start work (for example, a suit)
• essential home improvements, maintenance or security
• repaying hire purchase (HP) or other debts you took out to pay for any of the above.

You can apply for any amount from £100 to £1,500. You must state how much you need when you apply.

Can I apply?

You can apply for a budgeting loan if you or your partner has been on income support or income based jobseeker's allowance or pension credit for at least 26 weeks. Short breaks can be ignored - seek advice if you have had any breaks in the 26 week period.

How do I apply?

Budgeting loans are given out by the social fund. You can make an application at your local Jobcentre Plus office. Claim forms are also available online at the Jobcentre Plus website.

What are my chances of getting a loan?

Your chances of getting a loan and how much you might get will depend on several things, including:

• how much money the council has in its budget (ask your council about the maximum amounts they can lend you)
• whether you are single, in couple, or have children
• whether you have more than £1,000 in savings, or £2,000 if you or your partner are over 60 (the amount you get will be reduced if this is the case)
• whether you already owe money to the social fund because of a previous loan (in this case, the money you owe will be deducted from the amount you can borrow)
• how much you're likely to be able to repay.

If you want to apply, get advice first - use the Advice Services Directory to find a local advice centre. An adviser may be able to:

• help you convince the social fund that you should be a priority (the rules about who gets priority are very complicated)
• check whether you can apply for a community care grant instead (if so, you would not have to pay this back)
• explain the forms and help you work out how much you need to ask for
• help you to appeal if your claim is refused.

How is the loan paid back?

You will have to pay back what you borrow within 104 weeks. If you are still getting benefit, a fixed amount will be taken out of your income support, jobseeker's allowance or pension credit until the loan has been repaid. You won't get a loan if you will not be able to repay it.

What if my application is refused?

If your application for a budgeting loan is refused, you can ask the social fund to review its decision. To do this, you must:

• apply in writing
• apply within 28 days of the date the decision was given
• explain clearly the reasons why you think the decision was unfair.

If the social fund does not change its mind when it reviews the decision, you can then ask the Independent Review Service (IRS) to look at your application again. The IRS can change the decision if it was wrong. Visit the IRS website for more information.

If you are not happy with any decision made on your application and want to ask for a review, get advice immediately. It is often difficult to get decisions about the social fund changed, but the help of an adviser could help you increase your chances of getting a loan.