What financial support is there for families in Scotland?

November 5, 2015

A wide range of help is available for families in Scotland, whatever their financial situation. If you are struggling to control your debt or are on a low income, various sources of support can make a huge difference to the quality of family life, whilst preventing your financial situation from worsening.

Here are some of the support schemes available from the Social Fund for low-income families in Scotland receiving welfare benefits:

Maternity Grant

This is a one-off payment from the Social Fund of £500, intended to help with the costs of a baby under the age of 12 months. You may be able to claim if you are in receipt of certain benefits, you or your partner is 29 weeks’ pregnant or more, the baby will be the only child in the household under 16 years of age, and you have received advice from a health professional. The Grant does not need to be repaid.

Cold weather payments

If your family includes a child under five years old and you receive certain welfare benefits, you should enquire about your eligibility to claim cold weather payments. These are made when temperatures fall below freezing for a period of seven consecutive days.

A weather station linked to your post code area records the temperatures, and payments of £25 for each spell of cold weather are automatically made to eligible families.

Budgeting loans

Budgeting loans range from £100 to £1,500, and are intended to help with large expenses that are difficult to afford for low income families. They need to be repaid to the Social Fund, but are provided on an interest-free basis so you only repay the amount borrowed.

Budgeting loans may be available if you need to furnish the family home, pay a lump sum of rent in advance, buy clothes for your family, or carry out general home maintenance/improvements. Applications are considered on a case-by-case basis, and you’ll need to specify the category of expense for which you need the loan.

If debt is becoming a problem and you need help to keep a roof over your head, there are schemes available in Scotland that could relieve some of the financial pressure:

Debt Management Plans (DMP)

A Debt Management Plan provides you with extra time to pay if debts are mounting up.

Pros

  • the Debt Management Plan will not be on public record
  • you can set up a DMP without the prior approval of your creditors

Cons

  • creditors are able to add charges and interest to the overall debt, meaning that you don’t know exactly when the arrangement will finish
  • creditors are still entitled to contact you directly
  • your home is not protected from creditor action

You’ll need to contact an approved Money Advisor or charity to arrange your DMP. You make one payment per month to them, which is divided between your creditors on the agreed basis.

Mortgage Rescue Schemes and the Home Owners’ Support Fund

These schemes are run by the Scottish Government, and include two elements:

Mortgage to Rent

This involves you selling your home to a social landlord such as a housing association. They pay off what you owe, and then rent the property back to you. The legal costs of transferring ownership to the landlord are met by the scheme, so you don’t have to cover these expenses.

Mortgage to Shared Equity

The Scottish Government buys a proportion of your home, allowing you to reduce the cost of your mortgage. You don’t pay anything back to the government on a monthly basis, but can buy back the proportion of your property at a later date should your financial position allow. With this scheme you are responsible for paying the associated legal fees.

If you are experiencing temporary financial difficulties, these schemes may not be appropriate. It is advisable to seek professional financial advice if you are worried about supporting your family and getting out of debt.

Scotland Debt Solutions helps people in Scotland to deal with debt effectively, and can advise on the best solution available, whether a formal or informal procedure. Call one of our expert team to arrange a free initial meeting.

 

 

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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