Its report on the Social Fund says that the rate of repayment to the government-supplied loans hurts larger families the most and requires “radical reform”.
“In its current form, the Social Fund is making only a limited contribution to meeting the government’s objectives of combating poverty and social exclusion,” said lead author, Kate Legge of Nottingham University.
“The repayment of these loans from benefits just serves to further reduce the income of some of the poorest members of society.”
Crisis loans, budgeting loans and community care grants are provided by the Social Fund, offering loans at interest-free rates designed to help low-income people cope with problems.
However, the JRF claimed that decisions often took too long to be made, sometimes only partially awarding a grant, leading to confusion and financial hardship.
Unless the Social Fund is reformed, the JRF said, people are going to continue to turn to other means of obtaining loans or selling items, pushing them further in to debt.