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Short Term Advances Replace Crisis Loans

Written By On 24/04/2013

Many poverty stricken people receiving benefits are apparently entitled to a short term loan advance, but local councils are concerned they are not being given the correct information. These loans replaced what was previously known as 'crisis loans' the end of March.

Local authorities are saying that job centre staff are responsible for informing the claimants, but are refusing to let them know anything about them. They believe that the job centres are encouraging them to go to local authority crisis support schemes and ask for food parcels.

The amount advanced is between £100 to £1500 and is purely designed to help those on the bread line in dire need who can prove they have no savings. The no interest loan is to be paid back within three months. The intention is to help them in an emergency if they are waiting for their benefit payment to be processed.

Newcastle City council even sent mystery shoppers to the local job centre whom they believed to be genuine benefit claimants. They were making relative statements referring to the loan, but the staff were still not forthcoming.

Jane Henderson, corporate revenue and exchequer manager at the council, says that people are being sent to them by their local job centre. Apparently they are being told that the council will give them food and money to help pay their bills. She says

We do not have cash. What we have been doing is giving them food to last a couple of days, and signposted them to an advice worker who can sort out their payment.

Nick Forbes, council leader commented,

This feels like a classic example of a government agency passing the buck to local authorities. Short term loan benefit advances are not the responsibility of councils.

Councils all over the country are asking the Department of Work and Pensions why job centre officials are "passing the buck" and saying "they will not be externally advertised because they encourage dependency on the benefit system." The DWP however are saying that they have given the job centres the correct instructions.

A DWP representative said:

We're aware of a small number of complaints in the north east since the changes were made. Claimants who contact DWP and say they are in financial hardship whilst waiting for their first benefit payment will be considered for a short term benefit advance and if appropriate, DWP is paying them.