nevip
welfare rights adviser, sefton metropolitan borough council, liverpool.
Member since 22nd Jan 2004
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RE: Refusal to reduce BL repayments
Mon 12-Apr-10 12:46 PM |
From the SF guide:
Direction 11 - Ability to repay Direction 11 Ability to repay 74. The repayment terms of Budgeting Loans (BLs) are determined by officers acting on behalf of the Secretary of State. The award of a BL may depend on its repayment being completed within the recommended 104 weeks. 75. If an applicant has requested an amount that is more than they can afford to repay within 104 weeks, based on standard repayment rates as determined by officers acting on behalf of the Secretary of State, the applicant may be given alternative offers to maximise the award size and enable the applicant to make a choice according to their existing commitments and the weekly repayments available to them within 104 weeks - see paras 80 – 82 below. 76. The applicant may be given more than one offer on the same BL application which may affect the amount of the award. Alternative offers may be made to the applicant if the standard rate of repayment is insufficient to make a full award. 77. An applicant's ability to repay will depend on: • their total debt to the Social Fund (SF) • any other continuing commitments they may have 78. In calculating repayments, officers acting on behalf of the Secretary of State must have regard to: • the recommended maximum repayment period of 104 weeks • the likely various rates of repayment • the level of multiple debt 79. If an applicant plainly cannot afford a further loan, eg the applicant is already repaying his loans over a period of 104 weeks and has multiple other debts; it would be inadvisable to award a budgeting loan. 80. If an applicant has requested an amount that is more than they can afford based on repayment rates as set on behalf of the Secretary of State, the applicant will be given alternative offers to maximise the award size and enable the applicant to make a choice according to their existing commitments. Where the applicant has no current loan and his/her standard rate of repayment is insufficient to enable recovery within 104 weeks, the applicant will be offered a choice of: • a reduced amount, repayable at the standard rate; • the full amount requested, repayable at a higher rate (subject to a maximum of 20% of available income i.e. Income Support (IS), Pension Credit (PC) or Jobseekers Allowance (JSA) adult personal allowance/premia rates + Child Tax Credit and Child Benefit for any dependent children but excluding housing costs); or • an amount in between the two that is the maximum that can be repaid at the higher rate of repayment. 81. Where the applicant is repaying an existing SF loan with less than 104 weeks outstanding, the applicant will be offered a choice of either: • an amount that is equal to that which can be repaid at existing repayment rates, between the completion of repayment of the existing loan and the end of the 104 week period; or where this is less than the amount available to offer: • the amount available to offer subject to maximum repayment rate not exceeding 20% of the available income and the 104 week ceiling; • an amount between the two where it is the maximum that can be repaid subject to the 20% and 104 week ceiling; or • an amount equal to that which can be repaid within 104 weeks by combining the proposed loan and existing social fund debt and setting a higher rate of recovery with the 20% maximum 82. Where the applicant is repaying an existing social fund debt with a full 104 weeks still to run: • an amount equal to that which can be repaid with 104 weeks by combining the proposed loan and the existing social fund debt and setting a higher repayment rate subject to the 20% maximum (where this could not be done the BL would be refused. Total debt 83. Total debt means the total amount that an applicant owes to the social fund at any one time. Under no circumstances will a BL be awarded which takes the amount over £1,500. 84. Applicants' total debt at any one time will depend on whether they already have a loan from the social fund, and if so, how much of any outstanding loans they have repaid. Social Fund Computer System (SFCS) will show the total amount of debt outstanding. Before awarding any further loans consider any additional off-system debts. The total debt to the social fund will reduce as repayments are made. 85. In each case, any loan offer will be no more than the £1,500 total debt to the social fund.
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