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DWP
We queried this after receiving conflicting information and received the following from Housing Benefit Strategy Division, DWP.
Support for Mortgage Interest – Contribution based benefits
Support for Mortgage Interest (SMI) is an integral part of the income-related benefits, and is targeted at those who are on low incomes and have capital/savings under £16,000. However, when the new SMI measures were introduced, DWP included provision to ensure that those awarded contribution-based JSA or Employment and Support Allowance (ESA) would be considered for the income-related benefits to enable them to receive housing costs after the 13 week waiting period if they have title to those income-based benefits (but see section below on Excess Income Over Requirements).
In the Regulations (Regulation 1(4)) introducing the SMI measures , the ‘relevant benefit’ which the measures apply to is defined as:
‘an employment and support allowance;
income support;
a jobseeker’s allowance’
This is deliberately described in that way to ensure that any period the customer spends on contribution-based ESA or JSA does count towards the waiting period for SMI.
So, if a customer has worked and paid National Insurance, and is awarded a contributory-based award of JSA or ESA, that does not prevent them from benefiting from the new SMI measures (including the £200,000 capital limit) after 13 weeks, so long as title to the income-based benefits is established.
Excess Income Over Requirements
Where a customer claims ESA or JSA, but does not satisfy the contribution-based element, and the income-related element is disallowed at the beginning of their claim because of Excess Income Over Requirements (EIOR), they cannot benefit from the housing costs changes. They fall to be considered under the old rules, that is, a 26 or 39 week waiting period before SMI becomes payable, and a capital limit of £100,000.
This is because the regulations specify that a customer has actually to receive payment of a ‘relevant benefit’ (i.e. contribution-based ESA or JSA) at the start of the claim to benefit from an award of income-related ESA or JSA after the 13 week waiting period.
The Social Security Advisory Committee have consulted on the regulations that brought in these changes, and DWP Ministers will consider the EIOR matter further at the same time as they consider their formal report, which is expected imminently.
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