The Government has clawed back £28million in emergency crisis loans to low-income people in the past two years, despite stopping the loans in 2013.
Crisis loans were a quick stop-gap cash fund that the public could access from the Department for Work and Pensions (DWP) to help in emergencies for them and their families.
The Government set the scheme up in 2004 and ended it in 2013.
But it is still reclaiming these loans seven years on, according to a Freedom of Information request by the Mirror.
The DWP said it has reclaimed £28million in the loans between April 2019 and April 2021.
If you are being asked to repay crisis or budgeting loans to the DWP you never took out, message sam.barker@reachplc.com
Loans are paid back by DWP docking your benefits, or by asking you for money.
DWP took back £18million in the 2019-20 financial year and £10million in 2020-2021.
A DWP statement says it "seeks to recover all debts as quickly as possible, whilst ensuring no undue financial hardship is created for the claimant".
If you cannot afford to pay the loan back in the way DWP suggests, you should contact its debt management team to provide details of your earnings and spending.
The telephone number for the team is 0800 916 0647.
A DWP spokesperson said: “We understand that people will need additional support during a period of crisis and stand ready to support them.
“When the time comes to repay a crisis loan, the amount can be negotiated and in April this year we reduced the repayment cap even further to support families with their essential costs.”
It may then let you pay back smaller amounts over a longer period.
In the first seven years of the crisis loan scheme there were seven million claims from 400,000 regular claimants, some of who applied for more than 10 loans.
When DWP let people make claims over the telephone in 2006, crisis loan borrowing tripled to £1million a day.
To limit the claims, in April 2011 the DWP banned claimants from spending crisis loans on things like cookers and beds. It also capped the amount of crisis loans one person could have a year at three.
The aim was to nudge people towards using budgeting loans instead.
These still exist, and are meant to help claimants buy essential items like furniture and household equipment.
To get a budgeting loan you need to be on a low income or benefits.
You’re only eligible if you've been on certain benefits for six months - such as Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance and Pension Credit.
If you've been switched onto Universal Credit from Pension Credit, any time spent claiming for it will count towards the six months.
However, you cannot get a budgeting loan if you are currently claiming Universal Credit - but you can get an advance payment from this.
You’re also not allowed one if you're involved in a strike or you already owe more than £1,500 in total for crisis loans and budgeting loans.
