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Support for mortgage interest

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Daphne
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In a written answer yesterday Kit Malthouse confirms that there is provision to extend SMI benefit where DWP have been unable to contact the claimant -

To date, the department has sent information to around 95% of SMI claimants at the address at which they are claiming SMI benefit. In some cases we have so far been unable to contact claimants for a variety of reasons such as where we need to obtain a telephone number for the claimant. On current plans, the last contacts should be made by 26 March. The Loans for Mortgage Interest Regulations 2017 contain provision to extend payment of SMI benefit in these cases.

     
Gareth Morgan
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Daphne - 07 March 2018 11:05 AM

The Loans for Mortgage Interest Regulations 2017 contain provision to extend payment of SMI benefit in these cases.

I read Reg. 19 as giving 6 weeks where no contact has been made.

     
stuart
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New regulations out today - SI.No.307/2018 - amend transitional provisions and make other amendments. For summary of main changes see rightsnet news.

     
hkrishna
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Been looking closely at the amended definitions of joint and single claimant and following that getting clarification from the civil servant named in the explanatory memorandum.

Not only are joint UC claimants no longer able to be ‘treated as’ entitled for both purposes of serving the waiting period and then qualifying for a SMI loan but neither are single UC claimants - the definition for the latter which can treat someone as entitled only covers those who would have been getting legacy benefits or pension credit if the SMI amount was included. On checking with the civil servant, apparently it was never the policy intent that UC claimants could be treated as entitled at all, although of course the regulations as made did. Means that UC claimants in these circumstances, ie with unearned income just in excess of their max UC amount, will not only be excluded from SMI loans but also from the amendment that allows legacy benefit and PC to be passported to SSMGs and funeral payments when treated as entitled for SMI loan purposes.

     
Gareth Morgan
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hkrishna - 12 March 2018 01:56 PM

... would have been getting legacy benefits or pension credit if the SMI amount was included. ... Means that UC claimants in these circumstances, ie with unearned income just in excess of their max UC amount, will not only be excluded from SMI loans

I’m not sure I follow this.  Wouldn’t someone with a little more income than their UC needs figure qualify for a loan if the SMI would have been more than the difference?

     
bigbill
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Have to say I am seriously concerned at the lack of enquiries we have had about this major change, suggesting that people do not understand that things are about to change with the first hint being an arrears letter from the lender.

It does not help that the new up-rating letters arriving now showing increases from April still have the mortgage interest shown.

     
Paul_Treloar_AgeUK
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bigbill - 12 March 2018 07:55 PM

It does not help that the new up-rating letters arriving now showing increases from April still have the mortgage interest shown.

Really!!! Any chance you could share a redacted version Bill? That would suggest very serious misinformation if so.

     
bigbill
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Next one I see I will copy and post

     
stuart
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Only 11 per cent of SMI claimants so far have said they intend to accept a loan ...

As of week commencing 5 March 2018, over 10,100 claimants (around 11 per cent of the live caseload) have stated their intention to take up the offer of an SMI loan.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2018-03-07/131473

     
hkrishna
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Gareth Morgan - 12 March 2018 05:09 PM
hkrishna - 12 March 2018 01:56 PM

... would have been getting legacy benefits or pension credit if the SMI amount was included. ... Means that UC claimants in these circumstances, ie with unearned income just in excess of their max UC amount, will not only be excluded from SMI loans

I’m not sure I follow this.  Wouldn’t someone with a little more income than their UC needs figure qualify for a loan if the SMI would have been more than the difference?

No longer following the amended definitions of joint and single claimant. ‘Actual’ UC entitlement is now required.

     
Paul_Treloar_AgeUK
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Also been looking at these and feeling confused.

Henri, with the amendments to insert people being treated as entitled to legacy benefits, does that mean that a PC claimant whose only entitlement to PC is because of housing costs would continue to have the relevant passporting applied in terms of christmas bonus, health benefits, free school meals, council tax reduction etc?

I can see the amendments for funeral payments but unsure about the others.

     
hkrishna
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They’re a pain Paul. The ‘treated as entitled’ definitions were in the original version of how single and joint claimants were defined in reg 2 but rather opaquely drafted. However, both in their original form and the new amended form even if you can get an SMI loan because you are treated as entitled, that treated as entitled does not give you passporting other than. post-amendments, to funeral payments, cold weather payments and maternity grants. Para 7.12 of the explanatory memorandum to the original regs indicated the ‘treated as entitled’ intent including exclusion from passporting.

So if you have no actual PC entitlement but can still get an SMI loan thanks to the ‘treated as entitled’ definitions for single and joint claimants, now you can still get a funeral payment, cold weather payment or maternity grant but not other entitlements requiring passporting. See para 7.18 of the explanatory memorandum to the amending regs.

     
Paul_Treloar_AgeUK
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Thanks Henri, appreciate that greatly.

     
Daphne
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stuart - 16 January 2018 11:29 AM

Since SMI loans are not benefits, but rather a financial product, is our advice whether to accept a loan (rather than general information about the loans scheme) crossing into realms of regulated financial advice (even where a client has no real choice but to take out a loan after April), so referral for independent financial advice is a requriement?

Citizens Advice considers this to be the case in its January Benefits Update newsletter. Not sure how claimants will be able to afford to pay for the advice though….

Written answer confirms that claimants are pointed to Money Advice Service, Shelter and Citizens Advice - none of which offer regulated advice.

     
Jeremy Barker
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Daphne - 14 March 2018 01:35 PM
stuart - 16 January 2018 11:29 AM

Since SMI loans are not benefits, but rather a financial product, is our advice whether to accept a loan (rather than general information about the loans scheme) crossing into realms of regulated financial advice (even where a client has no real choice but to take out a loan after April), so referral for independent financial advice is a requriement?

Citizens Advice considers this to be the case in its January Benefits Update newsletter. Not sure how claimants will be able to afford to pay for the advice though….

Written answer confirms that claimants are pointed to Money Advice Service, Shelter and Citizens Advice - none of which offer regulated advice.

The written answer does not impress. It says that the organisations mentioned “can support claimants to understand the options available to them”. Explaining the options is one thing but choosing which option is appropriate is where things fall into the arena of regulated financial advice. It appears that the minister thinks that once they understand the options a person can make a decision without assistance. That will often not be the case.