DEPARTMENT FOR WORK
AND PENSIONS News Release (EMP-114) issued by COI News Distribution
Service. 1 December 2008
unions and other third sector partners direct access to Social
Fund money so they can better help those on low income who have
difficulty accessing financial services is one of the options
unveiled by Kitty Ussher today as part of a discussion on
reforming the Social Fund.
Allowing third sector partners, such as credit unions, to deliver
services to Social Fund customers directly, lets customers take
advantage of the broader financial services these local
organisations offer such as advice on money management and access
to saving schemes.
Minister for Social Fund Kitty Ussher said:
"The Social Fund already provides a vital service to those
on a low income, providing loans and grants for emergencies and
the other unexpected costs of everyday life to those in need. What
has struck me is in some parts of the country there is fantastic
expertise and enthusiasm from a variety of external organisations
including but not limited to charities, debt advice and credit
unions that we could in theory work with, to make our service even
better, making affordable credit available to more people and
providing greater financial advice and support in difficult
economic times. "
Organisations such as credit unions are experienced in helping
people on low incomes and have proved successful in giving them a
sound financial basis upon which to progress. The Government will
investigate how they might work more closely with credit unions
and other external providers to deliver the further financial
services that Social Fund customers need.
Notes to Editors:
- The discretionary Social Fund is a cash limited system of
one-off payments, mainly to people receiving Pension Credit,
Income Support, income related Employment and Support Allowance or
income-based Jobseeker's Allowance - although Crisis Loans
are available to anyone without the resources to meet their
immediate, urgent needs. In 2007-08 over 4 million applications
for a discretionary payment were received and almost 3 million
payments worth over £770 million were made.
There are three types of payment:
Community Care Grants To help vulnerable people live as
independent a life as possible in the community or to relieve
exceptional pressure on families. This is a flexible scheme where
decisions are based on individual circumstances and needs.
Generally, only the highest of priority needs are met. The main
users are disabled people and lone parents.
Interest free Budgeting Loans To help people who have been on a
qualifying benefit for at least 26 weeks to spread the cost of
routine lump sum expenses like replacing household items.
Interest free Crisis Loans Available to anyone suffering an
emergency or disaster where payment of a crisis loan is the only
means of avoiding a risk to health and safety. Payments can be
made for immediate living expenses or essential items.
* The Government is working to ensure that everyone has access to
the advice and support they need to manage their money well. It
commissioned the Thoresen Review in 2007 to propose how best to
offer high-quality, sales-free advice or 'money
guidance', which is tailored to people's individual
needs and circumstances. The Government, with the Financial
Services Authority, will launch a pilot Money Guidance service in
the North West and the North East of England in spring 2009.
* Improving access to advice for Social Fund customers will be an
important part of the Government's broader programmes to
support financial capability and inclusion. The Money Guidance
pilot service, and any future national service, will also be a
vital source of advice for Social Fund customers and will help
support money management skills and sound financial decision making.