Can anyone help?

We have been looking into getting interest payments for loans taken out for home improvements, but we have had a number of conflicting views.

Does anyone know if the works need to be carried out before the DWP can review if the interest can be paid, or can it be done when the loan is drawn down with an agreement that the works will be carried out?

If would be very helpful if anyone has the regulations for this, but any insight around this matter will be useful.

Thanks.

Fri 01-Aug-08 11:50 AM by BrianSmith

IS regs sch 3 para 16 says that the loan must be used for the repairs or improvements within 6 months of receipt. the 6 months can be extended in reasonable circumstances. Presumably if the loan was not used for the intended purpose within the time limit, there would have been a recoverable overpayment of IS. Not sure if the same applies to Pension Credit, but I would guess so.

PC regs schedule 2 para 12 says exactly the same: the actual words are "the loan was used for that purpose, or is used for that purpose within 6 months of the date of receipt or such further period as may in all the circumstances be reasonable".

The loan can be secured or unsecured. However there are exactly the same problems with pension credit as with IS in taking out a loan when you are already on the benefit - the circumstances in which housing costs can be met in these circumstances are extremely restricted, and on the whole exclude loans for repairs and improvements.