Welfare reforms continue

11th April 2018

 In the past homeowners who claimed a meanstested benefit such as Income Support; income-based Jobseeker’s Allowance; income-related Employmentand Support Allowance (ESA); Universal Credit or Pension Credit could have qualified for financial help towards their mortgage interest payments.However since 6th April 2018 Support for Mortgage interest (SMI) will no longer be paid as part of your benefit. Instead, you may be offered an SMI loan to help with your housing costs. These SMI loans offer the same level of support for paying mortgage interest but interest will be added on the loan. The interest charged can go up or down but won’t change more than twice a year.  You will need to repay the loan, with interest, when you sell or transfer ownership of your home.  If you receive SMI, you’ll have received a letter telling you about the options available.

Remember, if you claim Income Support, income-related ESA or Universal Credit or Jobseekers Allowance, it will be 39 weeks from the date you claim before you get an SMI loan.  If you claim Pension Credit you won’t have to wait to apply for an SMI loan.  There are also limits on the size of mortgage for which you can get assistance.  If you currently work, it is important to consider how you would cover your mortgage payments in the future should you lose your job or fall ill. Mortgage payment protection insurance or accumulating savings may be something to consider.  For further information on SMI please contact our welfare advisers at your local centres.