Extra financial support could be available for those claiming certain benefits, thanks to the Budgeting Loan provided by the Department for Work and Pensions (DWP). This loan is exclusively for individuals who have been on specific benefits for the past six months.

However, it’s important to note that not all benefits qualify you for this loan – for example, Universal Credit claimants are ineligible. The only exception is if you’ve transitioned from Universal Credit to Pension Credit, in which case the time spent claiming the latter counts towards the six-month requirement.

Your eligibility may also be impacted if you’re already repaying a Budgeting Loan or Crisis Loan. It’s crucial to remember that any funds received from a Budgeting Loan must be paid back.

According to official guidelines, the minimum amount you can borrow with a Budgeting Loan is £100. If you or your partner are claiming Child Benefit, you could potentially receive up to £812.

For single individuals not claiming Child Benefit, the maximum amount is £348, which increases to £464 if you have a partner. The amount you’re eligible for will depend on your ability to repay the loan and your savings balance.

One significant benefit of a Budgeting Loan is that it’s interest-free, so you only need to repay the amount borrowed.

Full list of benefits eligible for the Budgeting Loan

Here’s the complete list of benefits that qualify for a Budgeting Loan. To be eligible, you must have been receiving one of the following benefits for at least six months:.

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

Those who are ineligible for Budgeting Loans

However, not everyone is eligible for a Budgeting Loan. If you’re on New Style Jobseeker’s Allowance or New Style Employment and Support Allowance, you won’t be able to apply.

Similarly, if you’re involved in a trade dispute while employed, or if your total debt from Crisis Loans and Budgeting Loans exceeds £1,500, you won’t qualify.

When you pay back the loan

Repaying the loan is different from typical bank loans. The Budgeting Loan is interest-free, meaning you only repay what you borrowed.

Repayments are deducted from your benefit payments, with the amount based on your income and what you can afford.

When you apply for a Budgeting Loan, you’ll receive a text, letter, or email informing you of the loan offer and detailing how much will be deducted each week if you accept. Typically, the loan is fully repaid within two years.

However, should you cease to receive benefits whilst still having outstanding repayments on a Budgeting Loan, the DWP Debt Management will issue a letter detailing how to manage and repay your debt. It’s important to note that claimants always have the initial choice to either repay the loan in regular monthly instalments or settle it in full.