How to apply for a Government crisis loan

  • Debt Advice
  • >
  • How to apply for a Government crisis loan
On this page

In recent years, the cost of living in the UK has surged, leaving many households struggling to manage their finances. Consequently, more individuals are seeking additional support to alleviate their financial burdens.

In this guide, we take a look at the UK’s financial support systems, including the replacement of crisis loans with Social Fund budgeting loans and other available aid, designed to help households manage the rising cost of living and financial emergencies.

Understanding government emergency assistance

Formerly known as crisis loans, government emergency assistance provided an interest-free loan to individuals facing difficulties affording basic necessities. 

These loans aimed to aid those encountering a sudden financial crisis, such as a significant reduction in benefits, leaving them unable to cover essential expenses.

Can I still get a crisis loan?

The government no longer provides what were once known as ‘crisis loans’ or a ‘crisis grant’. Support does exist for people who are facing serious financial insecurity, but it’s now offered under a new name.

While crisis loans are no longer available, they’ve been replaced by Social Fund budgeting loans, which serve a similar purpose. Administered through the Social Fund, these loans assist individuals facing unexpected financial emergencies, typical for those on low incomes.

It’s important to note that, akin to traditional loans, the amount received must be repaid within a specified timeframe. Repayments are usually deducted automatically from future benefit payments, obviating the need to negotiate a repayment plan.

Do I qualify for a Social Fund budgeting loan?

Just like a crisis loan, there are certain eligibility criteria you must meet to qualify for a budgeting loan.

For example, you will only be eligible for a budgeting loan if you or a partner has been claiming certain benefits for at least six months, or 26 weeks, prior to your application. This period should occur either over consecutive days with no break, or with a break no longer than 28 days.

Qualifying benefits for a budgeting loan

To qualify for a budgeting loan, you must claim one of the following benefits:

  • Income Support
  • Pension Credit
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance

If you switched from Universal Credit to Pension Credit, the time you spent claiming Universal Credit will count towards the six months.

However, if you or a partner has more than £1,000 in savings up to the age of 62, or more than £2,000 in savings at age 63 and above, you will not qualify for a budgeting loan.

What are budgeting loans used for?

Financial emergencies happen to everyone, and they can be hard to recover from even if you have a reasonable amount of income coming in each month. It’s even harder to bounce back from a financial emergency if you’re already on low income. 

Budgeting loans help to address that problem. This form of financial support is primarily designed to cover essential or unexpected costs when you’re on a low income, including:

  • Rent in advance
  • Moving home
  • Maintenance or security improvements for your home
  • Energy bills
  • Furniture or household items
  • Clothing
  • Costs associated with getting a new job
  • Funeral costs
  • Maternity costs

Application process for Social Fund budgeting loan

When it comes to applying for a budgeting loan,  The process aims to be as inclusive as possible, so there are several ways you can go about it.

We’ve listed some of the most common below. 

Online application via the UK Government website

This method offers a seamless and efficient process. By visiting the UK government’s official website, applicants can complete their forms digitally, providing all necessary details and documentation to expedite their request.

Submission of form SF500

For those who prefer, or who lack access to online resources, form SF500 serves as a viable alternative. This document can be downloaded, printed, and completed manually before being sent to the designated address indicated on the form.

While it may take a bit longer than the online process, it ensures accessibility for all applicants.

Social Fund enquiry line assistance

Individuals requiring guidance or assistance with their application can reach out to the Social Fund enquiry line. Trained professionals are available to answer queries, provide support throughout the application process, and even dispatch paper application forms upon request. 

This avenue offers personalised assistance to individuals who may encounter difficulties navigating the process independently.

In-person application at the local Jobcentre Plus

If you’d rather a face-to-face interaction, or think you might require additional assistance, visiting the local Jobcentre Plus is an option. Here, individuals can obtain physical claim forms, receive guidance on completing them accurately, and address any concerns with staff members. 

This option ensures accessibility for individuals who may not have internet access or require personalised assistance with their application.

Repayment terms for Social Fund budgeting loans

Budgeting loans offer borrowers interest-free repayment terms, typically spanning a two-year period. Repayments are automatically deducted from future benefit payments, streamlining the process and alleviating the need for manual repayment arrangements.

However, in the event of benefit payment cessation or unforeseen financial hardship, alternative repayment arrangements can be negotiated. Individuals experiencing difficulties meeting their repayment obligations are encouraged to communicate promptly with the relevant authorities. 

By initiating an open dialogue, borrowers can explore alternative repayment options tailored to their current financial circumstances, mitigating the risk of defaulting on their loan obligations.

What other forms of financial help and support are available?

Depending on where you live, you may be eligible for additional financial help and support from the UK government or your local council to help you meet your essential payments, including:

1. Personal Independence Payment

Personal Independence Payment (PIP) can help you cover the cost of extra living costs if you have a long-term physical or mental health condition and struggle to complete everyday tasks due to your condition.

PIP is available even if you work, have savings, or are receiving most of the other benefits you’re entitled to.

2. Discretionary Housing Payment

Discretionary Housing Payment (DHP) can provide financial support to help with housing costs if you’re on a low income.

DHP is available to individuals that claim Housing Benefit or the housing element of Universal Credit but need extra help with housing costs.

3. Short-term benefit advance

Short-term benefit advances can help you cover immediate costs if you claim benefits and are in a situation where you need money quickly. These advances can be directed straight to your bank or credit union account as long as you provide your financial details.

However, it’s important to remember that the money will come from future payments so you will be paid less when you receive your next benefits payment. You should seek advice from the Benefits office or Citizens Advice if you’re unsure how this will impact you.

4. Scottish Welfare Fund

If you live in Scotland, you may qualify for support from the Scottish Welfare Fund. The Scottish Welfare Fund is managed by local authorities in Scotland, and individuals can apply directly to their local council for assistance. 

The fund aims to provide timely and targeted support to those most in need, helping to alleviate financial difficulties and prevent further hardship. It consists of two main components: Crisis Grants and Community Care Grants.

Maxine McCreadie

Maxine McCreadie

Author/Debt Expert

Maxine McCreadie, prominent personal finance writer featured in Vogue and Yahoo News, delivers practical guidance, simplifying money management and championing financial literacy.

How we reviewed this article:


Our debt experts continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

May 8 2024

Written by
Maxine McCreadie

Edited by
Ben McCormack

Latest Articles

Why choose
UK Debt Expert

Free debt advice

that won’t affect your credit rating

We are rated 5 star by

more than 93%

on Trustpilot

FCA authorised & regulated

to advise on all UK debt solutions

We’ve helped over


people with their debt

Trusted and ready to take you forward

We’ve helped over 250,000 people find a way to deal with their debt