Changes to (abolition of) the Social Fund

welfarechangesThe social fund, administered by the Department of Work and Pensions (DWP), is intended to meet essential living expenses that aren’t covered by benefits.

It is divided into 2 parts: a ‘regulated’ part, and a ‘discretionary’ part.

The regulated part consists of non-repayable grants for the following, and is not changing: Funeral Expenses Payment, Maternity Grant, Cold Weather Payment, and Winter Fuel Payment.

The discretionary part consists of three sections:

  • Budgeting loans – loans for larger items such as furniture, clothing (intermittent expenses).
  • Community care grants – these are costs to enable people who may otherwise have to be in residential care
  • Crisis loans – this is a loan to help with emergency costs to cover immediate short term need/day to day living expenses in emergency circumstances, eg travel fares, food or extra nappies when a child is unwell. It is also used for ‘benefit alignment’, where people are waiting to receive benefits due to them.

In April 2012 the amount of crisis loan payable to claimants was limited to a maximum of 30% of the benefit rate of nonhouseholders, and 60% for householders. Loans for living expenses (not benefit alignment) were limited to 3 times per year).

Changes April 2013

Community care grants and crisis loans (aside from benefit alignment) will be abolished, and the responsibility handed to Local Authorities (LAs).

Crisis loans for benefit alignment only will be available through the DWP, and will become known as ‘short term advances’. Budgeting loans will still be available until the introduction of Universal Credit in 2017.

The budget for Community Care Grants and Crisis Loans will be disbursed to LAs. There is no requirement for LAs to provide support, nor will the grant be ring-fenced, and there is no duty for councils to report how they have spent the money. Each authority can decide whether it sets up an assistance scheme, and what it would look like. Charities are expecting that many councils will only offer ‘in kind’ schemes, and that no cash payments would be available, rather LAs would set up arrangements with local voluntary organisations such as food banks to provide assistance.

These changes are part of a package of reforms to the tax and benefit system this government is making - dismantling entitlements to social security and welfare support and attacking some of the poorest people in our society. Many more people are being pushed into poverty because of what this government is doing.

More information, and any further changes to the details documented here, can be found at: