The Social Fund


The Social Fund is a special form of welfare benefit provision that is payable for emergency or intermittent needs in addition to regular payments such as Jobseeker’s Allowance or Income Support. There are two categories of Social Fund:


• the discretionary social fund intended to respond flexibly to meet exceptional and intermittent needs; and


• the regulated fund intended to cover maternity, funeral, winter fuel and heating expenses.


In England and Wales, the Welfare Reform Act 2012 abolished certain elements of the discretionary Social Fund from April 2013. 


Community Care Grants and Crisis Loans for general living expenses (including rent in advance) were abolished from April 2013 and replaced with locally-based provision administered by local authorities in England and the devolved administrations in Scotland and Wales.


From April 2013, Crisis Loan Alignment Payments and other Crisis Loans paid to people facing problems with benefit were replaced by a new national scheme of Short Term Advances administered by the DWP.


Budgeting Loans


Budgeting Loans will continue to be available until Universal Credit is fully rolled out. As people migrate across to Universal Credit they will have access to a new system of Budgeting Advances that will replace Budgeting Loans.


Local Welfare Assistance


The government scrapped the Local Welfare Provision Grant, which provided councils with funding to provide crisis loans and community care grants from 2015-16. Funding of £172 million in local welfare assistance schemes (LWAS) was provided on a non-ring-fenced basis to 2015 but the government announced that, from April 2015, any support would have to come from within local authorities’ general funds.


Following a successful judicial review of the decision to end the funding for LWAS, brought by the Child Poverty Action Group (CPAG) as an “intervener”, the government agreed to review the schemes, consult on funding for 2015-16, and consider the equalities implications of its funding decision.


Following the review, it provided a further £74 million to upper-tier authorities “to recognise that councils have asked for additional support, including to help them respond to local welfare needs and to improve social care provision.” 


The amount allocated for the next five years is £800 million (or £160 million a year).