Short Term Benefit Advances and Budgeting Advances

Under provisions in the Welfare reform Act 2012, from 1 April 2013 Social Fund Community Care Grants and Crisis Loans (other than “alignment loans” to tide people over pending their first payment of benefit) were abolished and funding has been made available to local authorities in England and to the devolved administrations in Scotland and in Wales to provide such assistance in their areas as they see fit.

Other elements formerly covered by the discretionary Social Fund remain however the responsibility of DWP.

Social Fund Budgeting Loans and alignment loans are being replaced by a new nationally administered advance of benefit facility. From April 2013, interim payments and alignment loans were replaced by “Short Term Advances”. “Budgeting Advances” will replace Budgeting Loans for Universal Credit claimants, but Budgeting Loans will continue to be available to people claiming “legacy benefits” (the benefits UC is replacing) until all such claims have been closed or the claimants moved onto Universal Credit. For claimants of Pension Credit – who are not affected by the introduction of Universal Credit – “Benefit Advances” will replace Budgeting Loans.

This note provides a very brief overview of the changes and gives links to further information on the elements which remain the responsibility of DWP.