DWP loans of up to £812 are being offered to households to cover urgent financial needs. And to relieve cost of living pressures, repayment periods are to be extended later this year making it less of a burden on hard-hit families.

While old-style 'crisis loans' are no longer available, the Department for Work and Pensions says it can give budgeting advances to those claiming Universal Credit and similar budgeting loans to people on Income Support, income-based Jobseeker's Allowance (JSA), income-related Employment and Support Allowance (ESA) and Pension Credit. These are interest-free and repaid in instalments from your benefits.

You must have been on one of the above benefits for the past six months. For a budgeting loan, you won't qualify if you're on New Style Jobseeker's Allowance or New Style Employment and Support Allowance, are involved in industrial action, or already owe more than £1,500 in total for similar loans. To be considered for a budgeting advance, you will need to have repaid any outstanding balance on a previous one, or your request will be denied to prevent you ending up in a spiral of mounting debt.

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Amounts that can be borrowed are based on affordability checks and must be repaid within a period specified by benefits staff at the time. You normally have to repay a budgeting loan within two years (104 weeks) and a budgeting advance within one year. But the maximum period for Universal Credit recipients to pay back their budgeting advance is being increased from the end of this year.

In the Spring Budget 2024, Chancellor Jeremy Hunt announced he would double the time allowed to pay back the cash. Documents released after the budget confirmed: "The Government is increasing the repayment period on budgeting advance loans taken out by claimants on Universal Credit from 12 months to 24 months. This will apply to new budgeting advances taken out from December 2024 and will reduce the monthly repayments on these loans, relieving financial pressure on low-income households on Universal Credit."

According to GOV. UK, a budgeting loan can be requested for expenses such as furniture or white goods, clothes or footwear, advance rent payments, moving costs and travel costs. It can also be used for home maintenance, improvement and security work, maternity costs, funeral costs, repaying hire purchase loans or any job-related expenses.

The minimum amount you can borrow is £100. If you're single, you can get up to £348, £464 if you have a partner, or £812 if you or your partner claim Child Benefit. The DWP will determine the approved amount based on your ability to repay, whether you have savings of more than £1,000 (or up to £2,000 if you or your partner are 63 or over), or if you're already repaying a similar loan.

You can apply for a budgeting loan online - the fastest method - or by calling the Social Fund Enquiry Line on 0800 169 0140. If your application is successful, you'll receive an email, text or letter detailing your weekly repayments.

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For those receiving Universal Credit, a budgeting advance is an alternative option. These are usually provided for emergency household costs (like replacing a broken cooker or washing machine), funeral bills or work-related expenses such as clothing or equipment needed for a new job. The borrowing amounts are the same as for a budgeting loan.

Benefits advisors caution that the DWP may occasionally request receipts to verify that the cash was spent as claimed and warn claimants that the cash is not available to cover other costs such as energy bills, food, children's birthdays or car repairs. The advance is repaid in instalments deducted from your regular monthly Universal Credit payments so if you later come off benefits, you'll need to arrange an alternative repayment method.

To qualify for a budgeting advance, your earnings must have been less than £2,600 (£3,600 jointly for couples) over the past six months, and any previous advances must be fully repaid. You can apply by phoning the Universal Credit helpline on 0800 328 5644, sending a message through your Universal Credit account journal, or contacting or visiting your local jobcentre.

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