APPENDIX 4
Memorandum submitted by the Citizens Advice
Bureaux—Scotland (SF 12)
EXECUTIVE SUMMARY
1. Scotland's Citizens Advice Bureaux dealt
with 7,899 new enquires and 2476 ongoing issues relating to the
Social Fund in 1999/2000. Our social policy feedback mechanism
allows bureaux to send in client cases which are indicative of
the problems in their areas. (Paras 14-19)
Purpose of Social Fund payments
2. The Social Fund can provide access to
affordable credit to those whose incomes will not stretch to one-off
or sudden large expenses. Without access to Social Fund payments,
those on low incomes can find themselves paying over the odds
to commercial lenders. (Paras 21-23)
3. Vulnerable clients can be turned down
for Community Care Grants. Specific problems occur in relation
to Scottish travellers, who can face difficulties establishing
that they come within the definition of those qualifying for Community
Care Grant payments. (Paras 24-26)
4. There is concern that Crisis Loans can
be used to plug the gaps in the standardised benefits system.
Clients can be denied access to Crisis Loans because of delays
in the decision-making process or because their need is not being
recognised within the current system. (Paras 27 & 28)
Problems with Social Fund Regulations
5. Because receipt of a limited set of benefits
is required to qualify for a Social Fund payment, clients in need
are being denied access. This may be because they have incomes
marginally above Income Support levels, because they have not
been in receipt of a benefit for the requisite period or because
they receive contribution-based rather than income-based Job Seekers'
Allowance. (Paras 29-35)
6. Because ability to repay a loan is a
legitimate consideration in making an award, clients without a
source of income can be refused payments. (Para 36)
7. Again, because ability to repay is a
legitimate consideration, clients with existing Social Fund commitments
are being refused payments in situations where there is a demonstrable
need. New Social Fund regulations, brought in in April 1999, can
exacerbate this situation. Particular problems include those who
are denied a Crisis Loan in emergency situations, couples whose
level of joint liability prevents them taking a further loan where
they would qualify individually and clients whose childcare responsibilities
are not reflected in calculations of their maximum loan level.
(Paras 37-43)
8. The 1999 regulations also introduced
a new system of application forms in relation to discretionary
payments. Citizens Advice Scotland is concerned that claimants
may be applying for Budgeting Loans rather than Community Care
Grants because they perceive an award to be more likely. We are
also concerned that, because neither a Community Care Grant nor
a Crisis Loan will be made where there has been an application
on either basis for the same items, the new system may further
prejudice their access to payments. (Paras 44-47)
9. There is evidence to suggest that some
clients are offered loans which are insufficient to cover their
needs. This problem has also been exacerbated by the April 1999
regulations. There is concern that clients may accept offers they
cannot afford in order to access higher levels of loan. (Paras
48-51)
Problems with the Administration of the Social
Fund
10. There is evidence that, despite efforts
to simplify the system, filling in Social Fund application forms
can pose problems for clients. This can be exacerbated in relation
to Funeral Payment forms as clients may be in a state of emotional
distress. (Paras 53 and 54)
11. Clients can also face problems getting
forms from the Benefits Agency. (Para 55)
12. Slow processing of applications, especially
at the review stage, can cause further hardship to clients in
need. (Para 56)
Conclusion
13. Clients with demonstrable need are still
falling through the current system as a result of regulatory or
administrative problems. (Para 58)
INTRODUCTION
14. Citizens Advice Scotland is the umbrella
organisation for Scotland's network of 57 Citizens Advice Bureaux.
These bureaux deliver frontline advice services throughout the
country, from the city centres of Glasgow and Edinburgh to the
Highlands, Islands and rural Borders communities.
15. The case studies contained in this submission
are directly based on client experience. Evidence of a client
problem with a social policy context is reported to Citizens Advice
Scotland through the Service's social policy feedback mechanism.
Bureaux throughout Scotland highlight the problems in their area
by sending in specific case examples which are indicative of the
wider issues. This information is collated and analysed by Citizens
Advice Scotland in conjunction with bureaux social policy statistics.
16. Citizens Advice Scotland welcomes the
opportunity to submit evidence to the Social Security Select Committee.
Scotland's bureaux dealt with 7,899 new enquiries in relation
to the Social Fund from April 1999 to March 2000, which represents
1 in 14 of all new enquiries received on benefits issues. In addition,
bureaux dealt with 2476 ongoing Social Fund issues. The case studies
which appear in this submission cover the period from April 1999,
when new regulations were introduced in relation to the discretionary
Social Fund, to December 2000.
17. This is the fourth report to be produced
by Citizens Advice Scotland dealing with the Social Fund in its
totality (there are many others which touch on aspects of the
regulations). The first, "Missing The Target" was produced
in May 1988 as a result of an extensive monitoring exercise of
the then new Social Fund system. "No Faith, No Hope, Try
Charity" was a follow-up, produced in 1992, and raises many
of the same issues which are covered in this submission. Also
of note is our 1994 publication, "No Help, No Home"
which looks at the failure of the Social Fund in relation to preventing
homelessness.
18. Citizens Advice Scotland also uses bureaux
case evidence to raise awareness of debt issues. Along with church
groups and anti-poverty organisations, we are members of the "Debt
On Our Doorstep" campaign. The campaign calls for a number
of policy initiatives, including a review of the Social Fund to
ensure that it can provide access to affordable credit to those
who cannot afford to use commercial lenders.
19. This submission is divided into three
sections:
— Purpose of Social Fund Payments looks
at case evidence in relation to the stated aims of certain Social
Fund payments.
— Problems with Social Fund Regulations
looks at the regulatory problems faced by clients when trying
to access the Social Fund.
— Problems with the Administration
of the Social Fund looks at how administrative issues can block
clients' access to the fund.
Each section is further sub-divided in relation
to individual issues.
PURPOSE OF
SOCIAL FUND
PAYMENTS
20. One of the issues to be examined by
this inquiry is the role of the Social Fund. A statement of intent
issued by the Secretary of State for Social Security reads: "The
Social Fund is a scheme to help people with needs which are difficult
to meet from regular income".[3]
However, the different relationships between needs and benefits
can make the situation more complex than this suggests.
Affordable Credit
21. In 1999/2000 Scotland's Citizens Advice
Bureaux dealt with 53,961 new debt issues and 71,894 on-going
debt problems, making money advice one of the biggest areas of
work for the Service. From bureaux experience, the reasons for
debt are rarely straightforward, perhaps involving a change in
relationship status, unemployment, very low income or succumbing
to increasingly aggressive credit marketing. However, a particular
concern in relation to those on low incomes is access to affordable
credit.
22. People on benefits can be denied access
to mainstream financial products because of previous debt problems,
limited incomes or sometimes purely on the basis of their postcodes.
Because they are considered to be a high lending risk, they are
penalised with a high rate of interest, which means that even
more of their income is directed towards financing credit.
An East of Scotland CAB reports of a single
parent with two children who owed £1722 to a well-known,
home-collecting lending agency, repayable at £43.90 per week.
Her only income was Child Benefit and Income Support (net of a
Social Fund loan deduction, Council Tax arrears payment and Fuel
Direct payment). The debt was as a result of four loans, each
of which had been given before the previous commitment had been
paid off. The bureau includes a detailed breakdown of the loans
taken and amounts charged eg. her second loan, taken in October
1998 was for £600 with a credit charge of £354. This
makes the total repayable £954, or 164 per cent APR.
23. The Social Fund provides a vital source
of money to those on low incomes. Its effective operation is an
important counterweight to the unsustainable spiral of debt which
can engulf those with restricted finances when faced with one-off
or sudden expenses. Budgeting Loans in particular provide a source
of affordable credit for those who would be forced to pay extortionate
rates to commercial lenders. However, while access to the Social
Fund for items for which there is a demonstrable need remains
an issue—as the case evidence in this submission suggests
it is—clients will be forced to turn to the commercial sector.
Community Care Grants
24. The rules governing Community Care Grants
are complex, to be applied with discretion and with consideration
to local priorities. However, they are primarily designed to help
people live and function effectively in the community, perhaps
because they have previously been in the care of statutory services
or because their family situation puts them under undue stress.
25. Case evidence from Scotland's bureaux
suggests that, in some situations, the current system is not meeting
the needs of those in target groups.
A North of Scotland CAB reports of a client
recently released from prison who had had his application for
a Community Care Grant turned down. The client had received no
support or advice regarding his entitlement to benefits or his
re-integration into the community. The bureau also notes that
the client had no clothes apart from those he stood up in, which
were inappropriate for the time of year. The bureau offered assistance
in completing a request for a review of the Community Care Grant,
as well as putting the client in touch with local charities and
specialist prison services.
A West of Scotland CAB reports of a seventeen-year-old
female who approached them after her application for a Community
Care Grant had been turned down. The client left care less than
a year previously and had spent most of the intervening time in
a homelessness unit. She was eight months pregnant and had recently
moved into unfurnished private rented accommodation with her partner.
They had no furniture whatsoever and were currently sleeping on
the floor on a foam mattress. The client had requested a review
of the grant decision three weeks before, and had been informed
that it would take a further four to six weeks for a decision
to be reached.
A West of Scotland CAB reports of a young,
single, homeless male client who had had recently been allocated
housing. His request for a Community Care Grant had been turned
down and, without basic necessities, he felt unable to occupy
the accommodation. The adviser notes that this is a common problem
in relation to single, homeless males.
A West of Scotland CAB reports of a young
single mother who is in the process of escaping from a violent
ex-partner. She had recently got an interdict against him and
has a new, partially-furnished house. However, her application
for a Community Care Grant to purchase a fridge and carpets had
been turned down. The bureau notes that bare floors pose a safety
risk to her children.
Travellers
26. A North of Scotland CAB notes a more
specific problem in relation to access to Community Care Grants
for this particular section of the population. The area is home
to over 15,000 people of Scottish traveller descent, most of whom
are unable to follow a traditional way of life due to changes
in employment patterns. Many now live in static caravans or unsuitable
accommodation but can face difficulties establishing that they
are within the definitions of the groups Community Care Grants
are designed to help.
The bureau reports of three cases relating
to travellers. In the first, a single mother and her child had
experienced harassment and physical assault from neighbours to
the extent that the local authority considered them to be homeless.
With the help of the adviser, she was able to obtain a limited
Community Care Grant payment. Two other cases related to travelling
families resettling locally, one from a caravan and the other
from a house in another area. In one case, an application for
a Community Care Grant had been refused, but a review had been
requested on the basis that since the family have lived their
lives in caravans, they have no furnishings to take with them
to a house and can therefore be considered to be leading an "unsettled"
way of life.
Crisis Loans
27. Crisis Loans have a specific role in
alleviating immediate hardship as a result of a disaster or emergency
where there is a serious risk to health or safety. However, the
evidence presented to Citizens Advice Scotland demonstrates that
there are cases where it is being used to plug gaps in the standardised
benefits system.
A North of Scotland CAB reports of a single,
female client who had just left a rehabilitation centre after
treatment for alcoholism. She was in receipt of Income Support
and living in supported accommodation when she received a demand
from the Benefits Agency for the return of her Income Support
book. Their doctor had assessed her as fit for work despite the
fact that her own GP had signed her off until the next month.
The client had just finished repaying a Crisis Loan from the last
time she came out of the rehabilitation centre: however, the bureau
advised that her best option was to appeal the decision and to
apply for a Crisis Loan to tide her over until some sort of income
was forthcoming.
An Islands CAB reports of a client with a
young son who had recently separated from her partner. She had
received an initial Social Fund payment while her claim for Income
Support was processed. In due course, the Benefits Agency discovered
that she was registered on a Training for Work scheme and was
therefore not entitled to Income Support. She was informed that
she should go to the Job Centre instead. The bureau advised her
to attend the Job Centre and apply for an immediate payment of
Job Seekers Allowance. If that was not forthcoming, she should
apply for a Crisis Loan.
An East of Scotland CAB reports of a female
client who had recently started a job. When she signed off, she
was informed that she would be able to get a Social Fund loan
to tide her over until her first pay cheque came through and that
they would send her a form. When no form arrived she called back,
only to be told that she did not qualify for a Housing Benefit
or Council Tax Benefit extension because she was three days short
of the qualifying period of 26 weeks unemployed. She was also
told that, as she was no longer on benefits, she did not qualify
for a Crisis Loan. The bureau advised her that she could apply
for a Crisis Loan.
28. There is also evidence that Crisis Loans
are failing to support those in emergency situations.
A North of Scotland CAB reports of a female
client who had recently fled her home and job in Fife with her
son due to a personal situation which threatened to put his safety
and mental wellbeing at risk. She had been unable to secure suitable
private rented accommodation so had stopped telling agents that
she would be in receipt of Housing Benefit. When she eventually
found a suitable house, she used her savings to pay the first
month's rent and deposit and applied for Housing Benefit. However,
it became clear that payment would not be made before her next
rent date. After exhausting the possibilities with the Housing
Benefit Department, the bureau spoke to the Benefits Agency, who
informed them that a Crisis Loan would not be issued in these
circumstances. However, had the client "planned" her
flight from Fife and organised a Community Care Grant, the chances
are that she would have qualified for a Crisis Loan to pay her
rent.
A West of Scotland CAB reports of a single
male client who had had his application for a Crisis Loan refused.
When he enquired about an appeal, he was told that a decision
may take three months, by which point a payment would be too late
to be useful.
A West of Scotland CAB reports of a client
whose parents lived in a nursing home in Glasgow. She had previously
been turned down for a Community Care Grant for travelling expenses
to visit them. When she visited the bureau, she had just heard
that her father had been rushed into hospital in a critical condition.
She had no money to get into Glasgow as, although she was in receipt
of Income Support, she had used it to pay off rent arrears. The
client was advised to apply for a Crisis Loan; however, the local
Benefits Agency stated that no payment would be forthcoming in
such circumstances.
PROBLEMS WITH
SOCIAL FUND
REGULATIONS
29. The issue of access to Social Fund payments
accounts for the majority of Social Fund cases fed back to Citizens
Advice Scotland through our social policy monitoring procedures.
Issues raised include problems with the qualifying criteria which
prevent access to those with need, problems with over-indebtedness
to the Social Fund and problems for people who receive payments
which do not meet the costs of the items detailed.
30. Many of these also interact with the
April 1999 changes to the Budgeting Loan regulations, which shifted
the emphasis of the system to nationally-set criteria for determining
priority rather than an assessment of need. The effects of this
new system are considered along with general issues of over-indebtedness.
The April 1999 regulations also affected the way discretionary
Social Fund payments are applied for. This issue is addressed
under its own heading.
Clients not in receipt of a qualifying benefit
31. All Social Fund payments, apart from
Crisis Loans, require receipt of a restricted list of benefits
before payments can be made. Budgeting Loans and Community Care
Grants are only available to those who are entitled to Income
Support or income-based Job Seekers' Allowance. With Budgeting
Loans, clients must have received one of these benefits for at
least 26 weeks. As the cases below demonstrate, this can result
in hardship for many with a demonstrable need.
Those with incomes only marginally above Income
Support levels
32. Clients in receipt of benefits, such
as Incapacity Benefit, which may put them slightly above Income
Support levels, do not qualify for most Social Fund payments.
This is despite the fact that the extra money they receive may
be expected to be absorbed by their special needs.
A West of Scotland CAB reports of a man in
his 30s with mental health problems who had been offered local
authority accommodation for medical reasons. He was refused a
Community Care Grant for furnishings because he was in receipt
of Incapacity Benefit. The bureau calculated that he was only
50p better off than the Income Support requirement. The bureau
therefore investigated the possibility of accessing charitable
help for the client.
A West of Scotland CAB reports of a single
parent with three children who worked and received Family Credit
(now Working Families Tax Credit). Because she did not receive
Income Support, she was not able to apply for a Budgeting Loan.
The client felt she was being penalised for being in employment
despite the fact that she had to juggle work and caring for her
children.
A West of Scotland CAB reports of a male
client in his 50s in poor health who recently buried his brother.
His claim for a Funeral Payment has been turned down on the basis
that he receives Incapacity Benefit and so is 70p better off than
an Income Support claimant. The man is homeless and therefore
cannot claim Housing Benefit or Council Tax either.
33. A more specific issue is under 25s who
are in receipt of low rate Incapacity Benefit and, because of
their age, are not entitled to an Income Support top up.
A West of Scotland CAB reports of a pregnant
single woman, aged 18, who was in receipt of Incapacity Benefit.
Because she could not claim an Income Support top up, she did
not qualify for a Maternity Payment (now Grant). The bureau advised
the client that, if she waited for the child to be born, her applicable
amount in relation to Income Support would rise and she would
be able to claim the payment. However, the client stated that
she would have preferred to be able to prepare for the new arrival
before the birth, when she would be less tired and pre-occupied.
A West of Scotland CAB reports of a teenage
man who had been thrown out of the family home. He was rehoused
by the local authority but could not access the Social Fund for
help with the cost of furnishings as he was in receipt of Incapacity
Benefit. The bureau confirmed that he was unable to apply to the
Social Fund and put him in touch with a local charity.
Those who have not been in receipt of a qualifying
benefit for 26 weeks
34. Clients can also be denied access to
the Social Fund on the basis that they have not been in receipt
of a qualifying benefit for the required period. In such cases,
clients' limited incomes often mean that they are no more able
to meet the costs of one-off expenses than those who have been
on benefits for longer. A particular concern is for clients who
are able to take up work before the end of the 26-week qualifying
period and are therefore left without support during this critical
transition.
A North of Scotland CAB reports of a client
with partner and child who was refused a Budgeting Loan for removal
expenses in relation to a new job in South Wales because he had
not been in receipt of a qualifying benefit for 26 weeks. The
bureau recorded that the probable result of this decision was
that he would have to sell his furniture to pay for travel to
Wales and would therefore have no furnishings for their new house
there, which had already been allocated.
An Islands CAB reports of a single male client
who had recently been allocated a council house. He was unable
to apply for Social Fund payments to help with furnishings because
he had not been in receipt of a qualifying benefit for long enough.
The bureau referred him to the Social Work department, who ran
a depository for second-hand furniture.
Those in receipt of contribution-based Job Seekers'
Allowance
35. Clients who are in receipt of contribution-based
Job Seekers' Allowance as a result of previous employment are
also prevented from accessing Social Fund payments, despite the
fact that their financial situation may be no different from those
on income-based payments.
A West of Scotland CAB reports of a single
female client receiving contribution-based Job Seekers Allowance
who had recently moved into a new flat. She lacked basic household
items such as a bed, cooker and carpets. She was denied a Budgeting
Loan because she was not in receipt of a qualifying benefit and
her application for a Crisis Loan was turned down because the
situation was not deemed to be an emergency or disaster. The adviser
dealing with this case commented that "maybe access should
be dependent on level of income as opposed to the name and origin
of the benefit."
A South of Scotland CAB reports of a client
who had received contribution-based Job Seekers Allowance for
six months after leaving low paid employment. He then moved to
income-based payments for two months. At this stage, he was refused
a Budgeting Loan because he had not received a qualifying benefit
for 26 weeks.
Clients refused access to Social Fund due to inability
to repay loans
36. Since ability to repay is a legitimate
consideration for decision-makers awarding Budgeting and Crisis
Loans, lack of a current source of income can be a reason for
turning down an application. This rule is of particular concern
as it seems to exclude those in the greatest financial need from
access to the Social Fund.
A West of Scotland CAB reports of a client
with two children, currently living in a hostel after fleeing
domestic violence. She had been resident in France for eight years
and, on her return to Britain, was refused Income Support because
it was deemed she had lost her entitlement. Since she therefore
had no income to support her children, she applied for a Crisis
Loan but was turned down on the basis that she had no ability
to repay it. The bureau assisted the client in appealing against
the decision that she was not entitled to Income Support.
A West of Scotland CAB reports of a client
who had lost her entitlement to Incapacity Benefit because she
had failed to attend a medical assessment. The bureau was involved
in the case already as the reason she had missed the appointment
was because the Benefits Agency had sent notification to her previous
address despite being told of the change. In the meantime, the
client was advised to apply for a Crisis Loan to tide her over.
This was refused on the grounds that, without benefits entitlement,
she had no ability to pay the loan back.
A West of Scotland CAB reports of a male
client in his 50s who had been in receipt of Incapacity Benefit
for many years. The client was required to hand in his payment
book as he had lost a social security appeal. He left it until
his payment date to visit the Benefits Agency for advice on what
other benefits he could claim and was therefore left without a
means of support. His application for a Crisis Loan was refused
on the basis that he had no ability to repay it. Furthermore,
the bureau was advised that, even if he made a claim for Job Seekers'
Allowance, a Crisis Loan would not be forthcoming until he had
had his initial interview and been given a signing schedule—which
could take a number of days. This was a local area decision on
the basis that it prevented multiple Crisis Loan applications
from claimants who had failed to attend such interviews.
Clients refused access due to existing Social
Fund loans
37. Again, since ability to repay is a legitimate
consideration in relation to the award of Budgeting and Crisis
Loans, the extent of existing Social Fund loans can be another
reason for turning down an application. While it is recognised
that such regulations protect those on low incomes from unsustainable
levels of debt to the Social Fund, Citizens Advice Scotland is
concerned that clients with genuine need may be forced to turn
to commercial lenders, leading to even greater indebtedness. Department
of Social Security statistics for 1999-2000 state that 22 per
cent of applications for Budgeting Loans were turned down due
to existing Social Fund debt.[4]
3
38. This problem has been further exacerbated
by the introduction of new regulations for Budgeting Loans in
1999. The new system lays down stringent criteria in relation
to permitted levels of individual debt to the Social Fund, calculated
on the basis of personal circumstances. Clients are also prevented
from taking out a further loan where an existing loan accounts
for more than half the amount of their maximum level of debt.
39. Citizens Advice Scotland recognises
that this system was introduced to encourage a level of equality
throughout the country in assessing the priority of a Budgeting
Loan. However, since local social security budgets still affect
the number and extent of loans allocated, there remains disparity
between regions.[5]
4 There is also concern that, by replacing an assessment of need
with an inflexible calculation, those with urgent requirements
are being excluded.
A West of Scotland CAB reports of a single
male client who applied for a Budgeting Loan of £1000 to
buy household items, including a new cooker as his previous one
had been condemned. He was offered £46.86 under the new scheme,
which does not meet his needs. The bureau explained that calculations
were now made on the basis of a mathematical formula relating
to personal circumstances and overall debt to the Social Fund.
However, the client could not understand why demonstrated need
did not secure the level of loan he required. The bureau requested
a review on behalf of the client, who insisted that a detailed
account of his need was included in the letter.
A West of Scotland CAB reports of a young,
single woman who applied for a Budgeting Loan to furnish her new
council house. She had previously been a tenant in a furnished
flat in the private rented sector and therefore owned no essential
household items. Her application was turned down on the basis
of outstanding Social Fund loans. On review, the loan was again
turned down. The bureau expressed concerns about the woman's health
as she was living in an empty house with only a used mattress
to sleep on and had suffered drastic weight loss.
A West of Scotland CAB reports of a young
mother with two children who applied for both a Budgeting Loan
and a Crisis Loan in relation to a cooker she had bought on hire
purchase. She was unable to keep up the payments and had been
informed that the cooker was to be repossessed. Both applications
were refused on the grounds of an outstanding loan, leaving the
woman with no facilities to feed her children and no means to
raise money for a new cooker.
Those who are refused Crisis Loans due to existing
Social Fund debts
40. The new regulations also set an absolute
ceiling of indebtedness which affects both Budgeting and Crisis
Loans. Clients who find themselves above this ceiling are refused
Crisis Loans as well as Budgeting Loans regardless of the nature
of the circumstances.
A West of Scotland CAB reports of a male
client on Incapacity Benefit who had recently experienced a house
fire. The bureau notes that this was clearly causing him great
personal upset and exacerbating his health problems. However,
his application for a Crisis Loan was turned down because he had
reached the maximum level of indebtedness.
A South of Scotland CAB reports of a female
client with three children who had recently returned to the area
from the city. Her social security payment had been sent to her
previous address, and the Benefits Agency refused to issue a new
giro until the original was returned. As a result she had no money
for food or power for her family yet, because she owed in excess
of £1000 to the Social Fund, she could not apply for a Crisis
Loan. The bureau referred the client to the social work department:
however, she had to visit the local branch before she could even
raise the bus fare to attend an interview at the main office.
Couples who are refused Social Fund loans due
to the level of joint liability
41. The new regulations can operate against
new couples whose change in circumstances results in a joint liability
to the Social Fund above the level set for their personal situation.
This is especially worrying as the start of a new relationship
can be a stressful time for young or vulnerable clients.
A West of Scotland CAB reports of a client
in her twenties with two children. She had recently entered into
a new relationship and, as a result of benefit payment rules (lone
parents are paid in the middle of the two week period while couples
are paid at the end), found herself without money for essentials.
She applied for a Crisis Loan but was turned down on the basis
that, together with her partner, they owed over £1000. However,
had she been single, she would have been able to make an application.
The bureau notes that because the client had herself been in care,
she did not want to contact the social work department. She was
therefore directed towards local church charities.
42. Problems can also occur at the end of
a relationship, when clients may find that they have been held
liable for their partner's debt.
A West of Scotland CAB reports of a single
parent who had recently separated from her partner. She applied
for a Budgeting Loan and was rejected on the basis that she still
owed too much from a previous loan. The client approached the
bureau as she did not understand how this could have happened
when she had been paying off her previous loan at the agreed rate.
When the bureau contacted the Benefits Agency, they discovered
that the client's payments had been used to pay off a loan taken
out by her partner many years ago. The client was outraged that
she had been paying for her partner's debt, incurred before they
met, without being notified and that this situation had resulted
in her request for a loan being rejected. The bureau put her in
touch with a law centre for help in pursuing the issue of joint
debts and notification.
Clients whose childcare responsibilities are not
reflected in Social Fund calculations
43. A similar problem can occur in relation
to parents with part-time childcare responsibilities. They can
be treated, for the purposes of calculating their maximum Social
Fund debt, on the basis that they have no dependants yet may find
themselves in need in relation to the requirements of their children.
A West of Scotland CAB reports of a divorced
man with access to his children for two to three days a week.
He applied for a Budgeting Loan to purchase a washing machine
and bedding in relation to his children. The request was rejected
because the client had reached the maximum level of Social Fund
debt for a single person. Had he been considered to have dependants
then he would have had a much higher upper limit for Social Fund
purposes.
Problems with the new system of application forms
44. The April 1999 regulations also changed
the way discretionary Social Fund payments were applied for. Instead
of filling out one form which was considered by Benefits Agency
decision-makers in relation to Budgeting Loans, Crisis Loans and
Community Care Grants, applicants now choose between three forms
which deal with each payment separately. The Secretary of State
for Social Security suggests that this process has simplified
and speeded up the process both for applicants and Benefits Agency
staff. He states "The evidence so far suggests that the revised
leaflets and application forms have been successful in helping
people to identify which type of payment fits their circumstances."[6]
5
45. However, the same report contains statistics
which show that applications for Community Care Grants dropped
by almost 45 per cent last year, from 1,166,000 in 1998-1999 to
643,000 in 1999-2000.[7]
Citizens Advice Scotland is concerned that applicants may be
opting for Budgeting Loans rather than Community Care Grants because
they perceive an award is more likely in the form of a loan.
26 week rule in relation to reapplying for Community
Care Grants and Crisis Loans
46. Another problem relates to the rule
that clients who have been refused a Community Care Grant or Crisis
Loan cannot apply again for either form of payment for the same
items within a 26-week period. This may put clients in a "double
jeopardy" situation when making their initial application.
A West of Scotland CAB reports of a young,
vulnerable couple who were expecting a baby and had been homeless.
They had recently been re-housed and had applied for a Community
Care Grant. When this was refused, they visited the bureau for
help in obtaining a review. The bureau notes that they have no
essential items, including furniture, cooker or carpets and comments
that, if the review is unsuccessful then the couple will be blocked
from applying for a Crisis Loan for the same items even though
their situation may, by then, constitute an emergency.
A West of Scotland CAB reports of an unemployed,
married woman with six children. Her husband earns £70 a
week, with Family Credit (now Working Families Tax Credit) topping
up their income. Her son disappeared with her payment book. The
matter was reported to both the police and the Benefits Agency
and the client was awarded a Crisis Loan to tide her over for
the week. However, when a new payment book failed to arrive within
this period, the client was told that she could not receive another
Crisis Loan on the same grounds. In this particular case, the
Family Credit Office also refused to issue an interim payment,
leaving the entire family without a means of support.
47. The Secretary of State's annual report
demonstrates that there are still occasions when applications
for Crisis Loans are awarded Community Care Grants and vice versa
(last year, 321 Crisis Loan applicants were awarded Community
Care Grants and 11,000 Community Care Grant applicants were awarded
Crisis Loans[8]).
However, Citizens Advice Scotland remains concerned that the new
system of separate forms further prejudices an applicant's chances
of receiving a payment for which they are in need. It should also
be noted that these statistics display the same trend of approving
more loan applications than grants.
Clients who are offered insufficient money from
the Social Fund
48. A further problem for clients accessing
the Social Fund is when they receive a loan or grant, but are
awarded insufficient sums. In some situations, the amount offered
is not enough to be useful to the client.
A North of Scotland CAB reports of a client
with three children who had recently left her violent husband.
She was currently sharing a sofa bed with her two youngest children
while her eldest slept on the floor. She applied for a Community
Care Grant of £2030 to cover the costs of a new cooker, carpets
and beds as well as removal expenses. She was awarded £60.
When the Benefits Agency was contacted to explain this decision,
they stated that the award was for removal expenses. In relation
to the client's need for additional furniture, they advised that
she should have prepared for a move to unfurnished accommodation
before she left her previous house.
A West of Scotland CAB reports of a client
on Incapacity Benefit who had recently buried his brother. He
had requested a basic funeral, but the bill still came to £1200.
He applied to the Social Fund for a Funeral Payment but there
was a shortfall of over £400. While the client is able to
meet these costs in instalments, he and his wife will be paying
for many years.
A West of Scotland CAB reports of a single
female client who had applied for, and been offered, a council
house with the help of her probation officer. She then applied
for both a Community Care Grant and a Budgeting Loan for furnishings.
Her grant application was turned down and she was offered only
£500 as a loan. The bureau comments that this is a common
problem: many clients starting new tenancies receive inadequate
help to allow them to furnish them to a minimum standard.
49. The 1999 Budgeting Loan regulations
have also impacted on this area as clients can be offered loans
much smaller than those they initially applied for as a result
of existing Social Fund commitments. They may also be offered
several repayment schedules, which can add to the confusion.
A West of Scotland CAB reports of a single
parent who applied for a Budgeting Loan of £450 to repair
her cooker and washing machine. She received two offers, one for
£91 to be paid back at £18 per week and one for £43
to be paid back at £8 per week. The bureau contacted the
Benefits Agency and, after it was explained to the client that
these figures were calculated on the basis of her existing loans
combined with a pay-back period of 78 weeks, she decided to reject
the loan offer as it was of no use to her.
50. One of the repayment options is likely
to be worked out at the maximum clients are deemed to be able
to pay back (25 per cent of their Income Support applicable amount).
It should also be noted that clients cannot have a Social Fund
loan offer reviewed on the basis of unsuitable repayment options,
they can only complain or accept the loan and renegotiate when
they have problems meeting the payments.
A West of Scotland CAB reports of a single
parent who had recently applied for a Budgeting Loan. She received
two loan offers: one of £630.30 to be paid back at £21
per week or £165 to be paid back at £5.60 per week.
The client could not afford the first option and the second offer
was too low to meet her needs. The bureau explained that her only
recourse was to complain.
A West of Scotland CAB reports of a mother
who had applied for a Budgeting Loan to purchase furniture. She
was offered a loan of £580.42 to be repaid at £20.02
per week or a loan of £126.73 to be repaid at £4.37
per week. She wished to accept the first option but did not think
she could afford the repayments. Again, the bureau advised that
there was no review of the repayment schedule.
51. There is also anecdotal evidence from
Scotland's bureaux to suggest that clients may be accepting loan
offers which they cannot afford in order to access higher Budgeting
Loan payments.
A West of Scotland CAB reports of a woman
on Income Support who sought advice on a Budgeting Loan offer
to be repaid at £34.04 per week.
A North of Scotland CAB reports of a client
on Incapacity Benefit who was left with £40 per fortnight
after deductions. The bureau phoned the Benefits Agency to find
out the extent of his Social Fund debt and advised him to write
a letter of appeal including an income and expenditure calculation.
PROBLEMS WITH
THE ADMINISTRATION
OF THE
SOCIAL FUND
52. Another category of problem faced by
clients is administrative difficulties. These can occur in relation
to over-complicated forms, delayed payments or errors in the way
the Social Fund operates. This is of particular concern in the
case of vulnerable clients who may have difficulty understanding
the system without assistance.
Problems with Social Fund application forms
53. The cases below illustrate that, despite
efforts to simplify the system, Social Fund application forms
can still pose problems for clients.
A West of Scotland CAB reports of a married
couple with mental health problems who visited for assistance
in filling out forms for a Social Fund grant. The bureau notes
that they were having some problems coping in the community and
found the form very difficult to understand, yet had received
no advice from statutory services. The bureau explained the questions
and completed the forms on the clients' behalf.
A West of Scotland CAB reports of a single
man in his 30s with literacy problems, who asked for assistance
in completing a Budgeting Loan form. Despite the fact that he
could not read or write, his local Benefits Agency had refused
to complete the form with him.
Funeral Payments
54. Specific problems can occur in relation
to applications for Funeral Payments as clients may be suffering
emotional distress due to the loss of a loved one.
A West of Scotland CAB reports of a recently
widowed woman who required help to fill in her application for
a Funeral Payment. As her husband had received a work pension,
the application was complex. The bureau notes that the client
was distraught and unable to take in details. She did not understand
why she needed to fill in forms at a time like this.
A West of Scotland CAB reports of a woman
on Income Support whose mother had recently died. Her father,
who was aged 90 and registered blind, was rendered incapable of
doing or signing anything due to the shock of his wife's death.
The client therefore filled in the form for him and signed as
his appointee. The claim was turned down as she had not filled
in form AP1, necessary in such circumstances. Her father died
before arrangements could be made for this form to be signed.
The bureau states that pleas to the Benefits Agency to consider
the circumstances in which the claim was made were ignored.
Difficulties Getting an Application Form from
the Benefits Agency
55. There have also been cases where clients
have reported that they have been unable to get a Social Fund
application form from their local Benefits Agency.
A West of Scotland CAB reports of a client
with a partner and two children who had had her Incapacity Benefit
claim stopped due to problems with her sick lines. She informed
the adviser that she had asked at the Benefits Agency for a Social
Fund loan but her request was refused. She had not been given
an application form. The bureau advised the client to return again
to the Benefits Agency and ask for a form to submit: if her application
was turned down, she could appeal or approach the social work
department for help in feeding her family. The bureau also notes
that they raised this problem directly with the Benefits Agency
as it was not the first time clients had reported similar circumstances.
A West of Scotland CAB reports of a single
parent who was moving into unfurnished council accommodation.
She had very little money and no furniture. The client visited
her local Benefits Agency office to pick up a Crisis Loan application
form but was told that there were none available. This was confirmed
by a telephone call from the bureau. The client was therefore
advised to visit a less local Benefits Agency office to pick up
the form. It was noted that she had very little money to cover
the bus fare.
Slow processing of Social Fund applications
56. Clients can face further hardship while
waiting for an application to be processed or, more usually, a
review to be arranged. The issue of delays in reviewing Crisis
Loan applications has been dealt with under the "Purpose
Of The Social Fund" section.
A North of Scotland CAB reports of a client,
recently released from an institution who, along with his pregnant
partner, had been allocated a council tenancy. They were struggling
to cope financially. An application for a Crisis Loan for essentials
had resulted in a £15 award. Their application for a Social
Fund payment to enable them to purchase furnishings was still
being processed. The couple were currently sleeping on the floor
and living on prepared food, which was exacerbating their financial
problems. The bureau phoned the Benefits Agency, which intimated
that a decision on the application would take at least another
week. In the meantime, they advised the purchase of a cooker on
a "pay later" arrangement. It was also noted that the
partner had contacted the bureau the week before to get food because
she had not eaten for two days.
A North of Scotland CAB reports of a male
client with a partner and child. He had recently been released
from a Young Offenders Institute. He had been allocated a council
house and applied for a Community Care Grant to furnish it. When
the application was turned down, he requested a review, which
would not be heard until several weeks hence. The family was currently
living at his partner's parents' house, but will have to leave
soon. The bureau states that reviews in these circumstances should
be dealt with promptly to avoid accommodation being left unoccupied
for prolonged periods of time.
A West of Scotland CAB reports of a middle-aged
female client who was going into hospital the next week. She had
applied to the Social Fund for a loan to purchase nightwear but
this had been turned down. As time was too short to appeal the
Social Fund decision, she was advised to get in touch with her
local bureau, who would contact a charity on her behalf.
Problems with cashing Social Fund payments
57. One bureau reported a case where a client
had faced problems encashing the payment he had received from
the Social Fund.
A West of Scotland CAB reports of a client
who had received a cheque for £599 as a result of a Social
Fund loan application. His Post Office refused to cash giros for
amounts greater than £300 and advised him to visit his local
Benefits Agency office. The Benefits Agency said that they could
not deal with the enquiry and that he would have to visit a different
Benefits Agency office. He needed the money urgently as the items
he had bought at auction were being delivered that afternoon.
The bureau could only confirm that he would have to visit the
second Benefits Agency office as that was where Social Fund payments
were administered.
CONCLUSION
58. The case evidence suggests that, while
Social Fund payments are increasing, there are clients in demonstrable
need who fall through the net. This may be as a result of the
regulatory regime which governs access to the fund and/or as a
result of administrative problems within the Benefits Agency.
It would also appear that the regulatory changes made to the discretionary
fund in April 1999, designed to create a standard assessment of
priority across the country, have created access problems of their
own.
59. Citizens Advice Scotland would like
to re-emphasise the importance of an accessible Social Fund to
those whose incomes cannot stretch to one-off or sudden large
expenses and would otherwise be forced to pay above the odds to
commercial lenders.
Abigail Bremner
Public Affairs Assistant
January 2001
3 Secretary of State's Direction and Guidance,
Department of Social Security, May 1999 Back
4
Para 7.7, Annual Report by the Secretary of State for Social
Security on the Social Fund, Department of Social Security,
2000 Back
5
Para 5.8, ibid, states "Due to these peaks in demand the
differences between the highest and lowest maximum amounts available
across Districts fluctuated during the year. The in-year allocations
and the small budget re-distribution were therefore used to restore
a reasonable gap . . ." Back
6
Para 7.2, ibid Back
7
Para 3.2, ibid Back
8
Para 3.7, ibid Back
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