In 2024, the Department for Work and Pensions (DWP) updated its Budgeting Loan program to provide better support for individuals receiving certain benefits.
This article will cover the key details about the DWP £812 Budgeting Loan, including eligibility, application process, acceptable uses, and recent changes to the program.
Recent Changes to the Budgeting Loan
The DWP has extended the repayment period for Budgeting Loans from 12 months to 24 months. This means borrowers can now pay back their loans over a longer period, which helps make repayments more manageable and less stressful.
Eligibility Criteria
To be eligible for a Budgeting Loan, you need to have been receiving one of the following benefits for at least six months:
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Pension Credit
If you are an older claimant who has moved from Universal Credit to Pension Credit, your time on Universal Credit can count towards the six-month requirement.
Who Cannot Apply?
You cannot apply for a Budgeting Loan if:
- You are receiving Universal Credit (apply for a Budgeting Advance instead).
- You receive New Style Jobseeker’s Allowance or New Style Employment and Support Allowance.
- You are involved in industrial action (like a strike).
- You owe more than £1,500 in Crisis Loans or Budgeting Loans.
Acceptable Uses of the Loan
You can use a Budgeting Loan for various essential needs, such as:
- Furniture and household appliances (e.g., washing machine, cooker)
- Clothing and footwear
- Rent in advance
- Moving house costs (e.g., removal van)
- Essential home maintenance
- Home security (e.g., new keys or locks)
- Travel costs within the UK
- Expenses related to securing a new job (e.g., interview attire)
- Pregnancy and childbirth costs
- Funeral expenses
Loan Amounts and Repayment
The amount you can borrow depends on your situation:
- Single person: £348
- With a partner: £464
- Claiming Child Benefit: £812
The loan amount is based on your financial situation, including your ability to repay, savings, and any existing loans.
Repayment Terms
The Budgeting Loan is interest-free and must be repaid within 24 months. Repayments are automatically deducted from your benefits. The weekly deduction amount depends on your income and affordability. If you stop receiving benefits, you still need to repay the remaining balance.
Application Process
You can apply for a Budgeting Loan online or by post. Applying online is recommended for a faster decision. You’ll need to complete a form with your personal and financial details and choose how you want to be notified of the decision (email, text, or letter).
Post-Application
After submitting your application:
- If you chose email or text, you’ll receive the decision within seven days.
- If you chose a letter, you’ll receive the decision within 21 days.
Accepting the Loan
If approved, you must accept the loan before receiving the funds. The process varies by application method:
- Online applicants will get instructions via text or email.
- Postal applicants will need to return a letter to accept the loan.
The DWP Budgeting Loan is a valuable resource for individuals on certain benefits to manage essential expenses. With the recent extension of the repayment period to 24 months,
the loan aims to reduce financial strain. By understanding eligibility, application procedures, and acceptable uses, you can make the most of this support. For further information, visit the official GOV.UK website.
What is the DWP Budgeting Loan?
The DWP Budgeting Loan helps people on certain benefits cover essential expenses.
How has the repayment period changed?
The repayment period has been extended from 12 months to 24 months.
Who is eligible for a Budgeting Loan?
You must have received Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, or Pension Credit for at least six months.
Can I apply if I’m on Universal Credit?
No, you should apply for a Budgeting Advance instead.
What can I use the Budgeting Loan for?
You can use it for essential items like furniture, rent, moving costs, and more.
