To ask the Secretary of State for Work and Pensions what criteria are used to determine whether Social Fund budgeting loans should be awarded. (106013)

Social Fund budgeting loans are awarded subject to consideration of the following criteria:

Whether the applicant has received a qualifying benefit¹ for at least 26 weeks;

Whether the application is for the intermittent expenses² within the scheme’s scope;

Whether the applicant is single, part of a couple, or either with children;

The amount of funding in the loans budget at the time;

The amount of existing budgeting loan debt owed by the applicant;

The amount by which the applicant's/partner’s savings exceed £1,000 (£2,000 if either is 60 or over);

Whether the award plus any existing budgeting and crisis loan debt exceeds £1,500;

Whether the amount applied for, or the award remaining after the adjustments above, is less than £100;

Whether the award, plus any other budgeting and crisis loan debt held, can be repaid in 104 weeks at a weekly rate affordable³ by the applicant.

¹ Income support, income-based jobseeker’s allowance and pension credit.

² Furniture and household equipment; clothing and footwear; rent in advance/removal expenses to secure fresh accommodation; improvement, maintenance and security of the home; travelling expenses; expenses associated with seeking or re-entering work; HP and other debts (for expenses associated with the preceding six categories only).

³ Administrative policy is that this rate will not be more than 20 per cent. of weekly available benefit income. Available benefit income is income support, income-based jobseeker’s allowance or pension credit plus any child tax credit and child benefit.

To ask the Secretary of State for Work and Pensions what assistance his Department offers to people who require immediate financial assistance but have been on benefits for less than 36 months. (106014)

The Social Fund provides for immediate financial assistance in the form of repayable crisis loans, which are available to any one whether or not they are in receipt of any benefit. A crisis loan is interest free and is paid to help meet an immediate short-term need in an emergency or a consequence of a disaster.

Repayable budgeting loans are available to help with routine lump sum expenses. They are interest free and to be eligible for consideration, applicants have to have been in receipt of a qualifying benefit, income support, income-based jobseeker’s allowance or pension credit, for at least 26 weeks.

Applicants are also eligible to be considered for a non-repayable community care grant, whose overall aim is to promote care in the community. However, a separate application would need to be made for such a grant. The majority of applicants have to be receiving a qualifying benefit on the date of the application but there is special provision for those applicants shortly due to be released from residential or institutional care.

To ask the Secretary of State for Work and Pensions what assessment he has made of the ability of families with children in receipt of benefits to make loan repayments to the Social Fund. (106015)

No specific assessment has been made of the ability of families with children in receipt of benefits to make loan repayments to the Social Fund.

Assessment of an individual applicant's ability to repay a discretionary Social Fund award is part of the statutory decision-making process followed by officers acting on behalf of the Secretary of State and takes into account the applicant’s family circumstances.

To ask the Secretary of State for Work and Pensions which criteria are used to determine whether Social Fund partial cash awards are made. (106017)

As part of the decision making process, considering the following criteria may result in a partial award on a qualifying discretionary social fund community care grant (CCG), crisis loan (CL) or budgeting loan (BL) application:

Whether a particular need is excluded (CCG, CL);

The budget position (all types);

Existing budgeting loan debt (BL);

Minimum award amounts (CCG, BL);

Maximum debt limits (BL, CL);

Capital resources over a certain limit (BL, CCG);

Any available resources (CL);

Possibility of third party help (CCG, CL);

Affordability (BL, CL).

Any award that is for less than the amount applied for is a “partial award”. Applicants can apply for any amount of money they choose—which is why “partial awards” are so common.

To ask the Secretary of State for Work and Pensions how benefits staff (a) interpret and (b) apply the inability to pay criterion in cases where applications for Social Fund loans are rejected on that criterion. (106019)

All benefits staff who are decision makers must follow the directions and have regard to the guidance issued by the Secretary of State.

Applicants for budgeting loans are not offered more than can be repaid, together with any existing social fund loans, over a period of 104 weeks. Where appropriate, applicants for budgeting loans are given choices in the weekly repayment rate—so that they can decide what amount of loan they can afford to repay within the 104-week period.

Applicants for crisis loans who have no source of income at all and no foreseeable prospect of having an income from which to repay, may be refused a crisis loan. Such considerations are a question for the judgment of the decision maker based on all circumstances of the case.

To ask the Secretary of State for Work and Pensions when the Social Fund was set up; and when it began offering loans. (106021)

The Social Fund was set up under the Social Security Act 1986; it began offering loans and awarding community care grants from April 1988.

To ask the Secretary of State for Work and Pensions what assessment he has made of the effects on families in receipt of state benefits of (a) making loans and (b) awarding grants under the Social Fund. (106022)

The Social Fund plays an important role in providing interest free loans or grants to assist the most vulnerable people with one-off items of expenditure.

In 2005-6 almost 3 million grants, loans and other payments were awarded through the regulated and discretionary Social Fund, with a total value of over £900 million (this figure excludes winter fuel payments of £1.9 billion and cold weather payments of £8 million).

The discretionary Social Fund provides valuable support to help the poorest and most vulnerable people meet certain needs, making around 2.5 million payments a year. An independent review of the running of the Social Fund by the National Audit Office published in 2005 found that, in general, the Social Fund is reaching those people who are in most need.

We have undertaken a number of Social Fund research projects to inform our understanding of the impact of the discretionary schemes and our thinking on both short and long term ideas for reform and how best the needs of people on low incomes can be met.

Findings from the Department for Work and Pensions Research Reports 139 and 210 are available in the House of Commons Library.

To ask the Secretary of State for Work and Pensions what research his Department has commissioned on the effectiveness in meeting its objectives of the Social Fund in the last 10 years; and if he will make a statement. (106027)

The Department for Work and Pensions has published the following research on the Social Fund:

“Saving and Borrowing” research report 125 published 2000

“Social Fund Use Amongst Older People in Britain” Research report 172, July 2002

“Experiences and Consequences of being refused a Community Care Grant” Research report 210, May 2004

“The use of the Social Fund by Families with Children” Research report 139, July 2004

“Perspectives of Social Fund loans and third party deductions” Research report 240, April 2005

“The discretionary Social Fund and Money Management” Research report 241, April 2005

This research, which is available in the House of Commons Library, provides an evidence base used to develop longer term approaches to Social Fund reform. It helps us to assess the extent to which the Social Fund contributes to wider DWP and government objectives and to identify where improvements might be made.

To ask the Secretary of State for Work and Pensions how the repayment rate for Social Fund loans is calculated. (106031)

Standard repayment rates are calculated as a percentage of available weekly benefit income. Weekly benefit income includes income support, income-based jobseeker’s allowance or pension credit plus any child tax credit and child benefit.

There are three rates—5 per cent., 10 per cent. and 12 per cent.—depending on the extent of other financial commitments.

Depending on individual circumstances, other non-standard rates can be set up to the maximum rate of 20 per cent. of weekly income.

To ask the Secretary of State for Work and Pensions what the average percentage is of weekly income of families with one or more children in receipt of a Social Fund loan which is spent on repaying Social Fund loans. (106032)

For budgeting loans, the available information is based on the repayment amount agreed by an applicant when a loan is accepted. Easier repayment terms for loans were introduced for applications received on or after 3 April 2006. For budgeting loans agreed on these repayment terms, the average percentage of weekly income of families with one or more children which was to be spent on repaying the loan was 9.2 per cent.

The equivalent information for crisis loans is not available.

To ask the Secretary of State for Work and Pensions what assessment his Department has made of the Social Fund’s ability to help families on low incomes meet minimum income standards. (106115)

No such assessment has been made as the Social Fund is not intended to address minimum income standards. The Government do not use a minimum income standard to assess families’ needs.