really stupid mental block here. Re Sch 3 about getting IS for mortgage interest etc, the bit about the exception to the general ineligibility when already getting IS- the one about when in the preceding week getting HB (para 8 b). This is where the claimant WILL be able to get ISMI in this case but only up to the same amount of HB as they were getting.
Just can I check- this restricted amount is only to do with the exception rule isn't it?
In other words if someone is getting HB but NOT IS, ibjSA or GPC in the week before their mortgage liability, then in this case any IS / ibJSA /GPC they are entitled to once they have mortgage costs is NOT restricted is it?

As I read para 8, the reference to the "relevant period" (ie entitlement to IS/IBJSA/GPC) only applies to the date on which the interest in the dwelling occupied as the home was acquired. I don't think it is possible to read into sub para 8b the requirement that the preceding week, in which housing benefit was in payment, must necessarily also fall into a period when income support (etc) was payable. The effect of this reading is that the restriction applies whatever income was being received in the previous week to the commencement of the liability to pay housing costs.

If you think about it this makes sense. Many people will only become entitled to income support(etc) by virtue of the extra applicable amount attributable to housing costs, say if they are getting incapacity benefit which is in excess of the personal allowance and any premiums.

This is thus an easement of the basic position that you can't get housing costs with these benefits if you incur the liability to pay while on the benefit.

thank you for this- i had completely misunderstood the concept of the relevant perid, thinking it only meant people currently in receipt of IS/ibJSA/GPC at the time liability was taken on, were excluded. i hadn't realised it covered those who would be eligible once housing costs were included, but i can see how that makes sense.
So- let me just check I've got this right- take someone with, say, sufficient pension income to take them over GPC limit while in rented accomm, getting partial HB, takes on a mortgage for a sheltered property- maybe buying their own place through social homebuy. The (mortgage interest) that can be taken into account as housing cost can only ever be up to the level of the HB they were getting in the week prior to their taking on the mortgage? So if say their income was £60 over their original applicable amount, and their HB had been £50, then they will only be able to have £50 housing costs added to their applicable amount. So their income is still above their applicable amount, so no GPC, so no help with the mortgage payments??
Also- supplementary question- if someone moved out of rented accomm for a few weeks before taking on their mortgage for some reason, such that they had no HB in the week prior to their new liability, would this also mean they wouold get no help with the mortgage because under the regs it could only be paid up to the level of HB in the week before, which in their case was nil???

Your calculation looks right: not much of an incentive to buy your own place, is it?

thanks for clearing that up for me.
as you say- not much of an incentive.
do you know the answerto my supplementary question about if there's a small gap between being on HB and taking on the mortgage? ie as the HB in the preceding week is nil does this mean the mortgage interest accountable as housing costs will also be nil??

I think you then fall into the general principle - which amounts to the same thing - no entitlement to help with housing costs if liability incurred while on benefit UNLESS getting housing benefit in the preceding week.

got it! thanks