Support for Mortgage Interest Money Advice Liaison Group (MALG) London Regional Meeting, 24 April 2018
Background OVERVIEW • Helps towards mortgage interest for homeowners receiving income-related benefits • Objective: to prevent repossession as far as is possible FISCAL CONSOLIDATION • No impact on available support FAIRNESS • Balance – individual need and taxpayer SUSTAINABILITY • Costs rise with interest rates • Help at point of need Department for Work & Pensions 2
The process Communications: Individual letters FAQ Booklet No loan Telephone calls (Serco) Take-up loan Sent loan agreement & No further communication charge form with completion guidance Benefit stops (6 weeks) Agreement & charge form returned • At least 6 weeks given to consider options Benefit becomes loan payment Department for Work & Pensions 3
How will SMI Loans work? Standard Applied Interest Same level to set Rate of support Claimant limit (SIR) as with benefit Bank of England Loans can AMR be 2.61% Introduced backdated Lender 6 April to 6 April 2018 Voluntary payments at any Current time Usually Gilt rate Payable secured [1.5%] only if Interest sufficient Repaid on as 2 nd equity bearing sale or charge on loan transfer property Department for Work & Pensions 4
How will LMI work? (continued) • Repayable only if equity available • Past payments as a benefit • DWP - Loan issue, management & recovery • Accepting or declining the SMI loan at any time • Can be backdated to 6 April 2018 Department for Work & Pensions 5
Vulnerable claimants PROCESS • Process in place to help claimants who may lack the mental capacity to make financial decisions • Referral to specially trained staff ATTORNEY/DEPUTY • Claimant will need representative (power of attorney/Deputy by the Court of Protection/Scottish equivalent) • DWP will appoint Financial Deputy/Intervener where one not in place CONTINUED BENEFIT • In such cases benefit may continue until at least November 2018 Department for Work & Pensions 6
Current status • All current claimants contacted by letter • Telephone contact • Take-up of loan and stated intention to take-up increasing • DWP Focus – Returned Forms – Seamless Transfer to loan for claimants and lenders • Factsheet available for stakeholder use Department for Work & Pensions 7
Further SMI Information • Stakeholder factsheet available from DWP – speak to me or DWP colleagues in today’s session • Visit: www.gov.uk/support-for-mortgage-interest for further information Department for Work & Pensions 8
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