Welfare Reform Act 2009

16 External provider social loans

(1) After Part 8 of the Social Security Contributions and Benefits Act 1992 (c. 4) insert—

“Part 8ZA External Provider Social Loans

140ZA   Arrangements for external provider social loans

(1) The Secretary of State may with the consent of the Treasury make such arrangements as the Secretary of State thinks fit with any person for the purpose of securing the making by that person (“the lender”) of loans to eligible persons.

(2) In subsection (1) “eligible person” means an individual who—

(a) is in receipt of a prescribed benefit, or

(b) has needs of a prescribed description.

(3) Arrangements under this section may relate to particular areas in Great Britain or to the whole of Great Britain.

(4) Arrangements under this section may provide for the making of payments by the Secretary of State to the lender—

(a) in respect of sums required for making loans, and

(b) in respect of other expenses of the lender.

(5) Arrangements under this section may in particular—

(a) specify categories of eligible person to whom a loan may not be made,

(b) make provision as to the criteria to be applied by the lender in determining whether to make a particular loan;

(c) specify circumstances in which a loan may or may not be made;

(d) make provision as to the manner in which the terms and conditions relating to repayment of the loan are to be determined by the lender;

(e) make provision as to the keeping of accounts by the lender;

(f) require the provision of information by the lender to the Secretary of State;

(g) require the provision to prospective borrowers of information or guidance about budgeting.

(6) Arrangements under this section may also—

(a) make provision as to the duration of the arrangements and as to the circumstances in which they may be terminated;

(b) provide for the making of payments by the lender to the Secretary of State if the arrangements cease to be in force.

(7) Any payments by virtue of subsection (4)(a) are to be made out of the social fund.

(8) Any sums received by virtue of subsection (6)(b) are to be paid into the social fund.

(9) In this Part a loan made by virtue of arrangements under this section is referred to as an “external provider social loan”.

140ZB   Transfer of loans

(1) Arrangements under section 140ZA may provide—

(a) for the right to repayment of a loan made under section 138(1)(b) before the arrangements come into force to be transferred to the person with whom the arrangements are made, and

(b) for the right to repayment of an external provider social loan to be transferred to the Secretary of State on the arrangements ceasing to be in force.

(2) Regulations may make provision modifying any provision of this Act, the Administration Act or the Social Security Act 1998 in its application to loans in relation to which provision made by virtue of subsection (1)(a) or (b) has effect.

140ZC   Annual report on operation of arrangements

(1) The Secretary of State shall prepare an annual report on the operation of arrangements under section 140ZA.

(2) A copy of every such report shall be laid before each House of Parliament.”

(2) After section 78 of the Social Security Administration Act 1992 (c. 5) insert—

“Repayments of external provider social loans

78A Repayments of external provider social loans

(1) Regulations may provide for the collection by the Secretary of State of repayments of a qualifying loan—

(a) by deduction in accordance with the regulations from prescribed benefits payable to—

(i) the borrower, or

(ii) where the borrower is a member of a couple, the other member of the couple, or

(b) in any other way.

(2) In subsection (1) “qualifying loan” means—

(a) an external provider social loan, as defined by subsection (9) of section 140ZA of the Contributions and Benefits Act, or

(b) a loan made by virtue of arrangements made under any provision having effect in Northern Ireland and corresponding to that section.

(3) The Secretary of State must pay any amounts collected to the person to whom the loan is repayable, except to the extent that the regulations otherwise provide.

(4) In this section “couple” has the meaning given by section 137(1) of the Contributions and Benefits Act.”