(2) what criteria he plans to use to determine whether an application for a Social Fund crisis loan will be granted in circumstances where the applicant has received three such loans in the preceding 12 months;
(3) what information his Department gathers to monitor the level of fraudulent applications for Social Fund crisis loans.
[holding answer 2 April 2009]: Proposed changes to the existing Crisis Loans scheme have been shared with DWP Customer Representative Groups and the Independent Review Service. Jobcentre Plus is committed to consulting on any changes before they are implemented.
Under planned changes due to be piloted this year, an award for a Crisis Loan will generally not be granted where an applicant has received three such loans in a 12-month period. There will be circumstances in which a further award may be made when need has arisen as a consequence of a disaster.
The Department does not gather specific information about the level of fraudulent applications for Social Fund Crisis Loans. However, any referrals of suspected fraudulent activity would be dealt with by the Fraud Investigation Service in the same way as any other referrals.
The social fund loans scheme was introduced in 1988. Loans from the social fund are repayable over a period of 104 weeks, which can in exceptional circumstances be extended to 130 weeks. Where a customer has more than one loan the oldest is repaid first.
Figures up to 31 March 2008 show that £1.225 billion has been awarded in crisis loans since 1988. Of this £0.947 billion, 77 per cent., has so far been repaid.