I have searched and searched in vain through CPAG handbook for this scenario. However harking back to my days as a Social Fund Officer , she would still be entitled to the loan , as she was entitled at the date of claim , but we would ask her to arrange an alternative repayment method , but keep the debt on file until such time as she becomes entitled to a suitable benefit again from which deductions can be made, in case she doesn't make any repayments whilst not entitled to benefits. If I was you I would phone the SF dept locally and ask their advice not mentioning any names.In case there have been changes in the last 10 years!!!
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