Low-income Britons forced to repay £28m of DWP crisis loans that ended 7 years ago

EXCLUSIVE: The department is still looking for people who took out crisis loans between 2004 and 2013, intended to help low-income people facing serious emergencies

The government has clawed back £28million in emergency loans to low-income people over the past two years, despite stopping loans in 2013.

The Crisis Loans were a quick cash fund that the public could access from the Department for Work and Pensions (DWP) to help in an emergency for them and their families.

The government introduced the scheme in 2004 and ended it in 2013.

But he is still getting those loans seven years later, according to a Freedom of Information request from the Mirror.

The DWP said it recovered £28million in loans between April 2019 and April 2021.

If you are asked to repay DWP crisis or budgeting loans that you never took out, send a message to sam.barker@reachplc.com

Loans are repaid by the DWP fixing your benefits or by asking you for money.

DWP recouped £18m in the 2019-20 financial year and £10m in 2020-21.

A statement from the DWP says it “seeks to collect all debts as quickly as possible, while ensuring that no undue financial hardship is created for the claimant”.

If you cannot afford to repay the loan in the manner suggested by DWP, you should contact its debt management team to provide details of your income and expenses.

The team’s telephone number is 0800 916 0647.

A DWP spokesperson said: ‘We understand that people will need extra support during a time of crisis and we are ready to support them.

“When it comes time to repay a crisis loan, the amount can be negotiated and in April this year we further reduced the repayment cap to support families with their essential expenses.”

It can then allow you to repay smaller amounts over a longer period.

In the first seven years of the crisis loan program, there were seven million applications from 400,000 regular applicants, some of whom applied for more than 10 loans.

When DWP let people make claims over the phone in 2006, crisis borrowing tripled to £1million a day.

To limit claims, in April 2011 the DWP banned claimants from spending crisis loans on things like stoves and beds. It also capped the amount of crisis loans a person could have per year at three.

The goal was to get people to use budget loans Instead.

These still exist and are intended to help applicants purchase essential items like furniture and household equipment.

To get a budget loan, you must have low income or benefits.

You are only eligible if you have received certain benefits for six months, such as Income Support, Income-Based Jobseeker’s Allowance, Income-Related Employment and Support Allowance and the pension credit.

If you’ve been plugged into Universal Credit pension credit, any time spent claiming it will count towards the six months.

However, you can’t get a budget loan if you’re currently applying for Universal Credit – but you can get a down payment.

You are also not allowed if you are involved in a strike or already owe more than £1,500 in total for Crisis Loans and Budget Loans.