Govt replaces unemployment mortgage-interest benefit with loans

One of numerous things the Tories are doing that have received little media attention is a hard kick aimed at mortgage-payers who lose their job.

Up to this month, people with a mortgage who become unemployed receive SMI – ‘Support for Mortgage Interest’ to help them not to fall behind on mortgage payments. It’s a limited benefit, paid on up to £200,000 of mortgage debt (£100k for pension credit recipients), only covers the interest portion of mortgage repayments – and doesn’t begin until 39 weeks after a claimant applies for unemployment benefit, so managing for almost the first ten months of unemployment is left to the person who has lost their job.

But now the government is piling even more of a burden on people already hit hard by losing their job:.

Labour MP Kate Green asked a written question about the government’s plans for SMI, which was answered by DWP minister Caroline Dinenage:


As Dinenage’s answer and the government’s summary page show, any new claimants applying now will not receive SMI. Instead they will receive a loan to cover their interest payments. That loan will accrue to the value of their home and will have to be repaid when the home is sold.

And it will be interest-bearing, so they will have to pay interest on a loan to pay interest – currently set at a significant 2.6%.

The change also applies to claimants of income-related ESA (Employment and Support Allowance) = people with a disability or long-term illness.

For the moment, only new claimants are affected by this change – but as Dinenage confirms, from 6 April next year it will be imposed on all claimants.

The Tories are set on removing any actual support from vulnerable people and turning it into loans. The UK is becoming a country where compassion and humanity are replaced by usury – all so that corporations and the rich can enjoy lower taxes.

It’s not only dementia and old age the government want to tax. They’re now going to tax you for scraping to buy a home and daring to lose your job.

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  1. Years ago, I remember the ‘Gnat West’ (Play on Nat West) T-shirts, which read:

    No money?
    No Job?
    Then f**k off.

    Time to change ‘Gnat west’ to ‘DWP’…

  2. And no doubt by this time next year (Call it August 2018 – IF they’re still clinging on then) the tory DWP will ‘outsource’ the loaning dept, for the reason that: ‘It exempts the taxpayer from the RISK’…Or some such shabbite.

    Like they did with the old ‘Crisis loan’ that used to be available until seconds after they got in in 2010.

    Instead of getting every penny back as they used to from crisis loans, the rat IDS decided of his own (what would the daily heil think?) volition that people were: ‘abusing the system’ (They got back every penny through deducted benefit payments) and the loans were ‘funding a party lifestyle’ (Or words to that effect).

    Thereby throwing the already broke into the clutches of the ‘payday parasites’ who exploited them to the maximum.

  3. It’s a shame WE can’t lend the government our taxes. And charge a suitable interest rate.

  4. This is absolutely, Disgusting. I had a accident in, 1991. Fortunately for me the interest on my mortgage was paid until I got back on my feet. I am horrified, that people who, through no fault of their own, will not get the help they deserve with their Morgage. This Heartless Government must go.

  5. Isn’t it discriminatory to pay Housing Benefit to renters but make a loan to those with mortgages?

  6. SMI does not cover all the mortgage interest either. This government has steadily been dropping the percentage of mortgage interest that they pay, so even if you are in receipt of pension credit, you still have to find a considerable amount per month just to keep up with the interest payments on your mortgage.

  7. The government would save more money by reviving the Fair Rent Tribunal system in order to lower Housing Benefits paid direct to other landlords. It seems that providing your own house and becoming mentally ill or disabled or unemployed is now legally unacceptable. Through years of mental illness my interest payments have always been lower than H.B. so the government has actually saved money. Of course, those M.P.’s who purchase houses in Hampstead before losing their employment have done better than honest folk and scammed the system, but why should honest mental patients have to repay this benefit when renting claimants do not? This discrimination should be tested in court if it is not rejected by neo-liberal Labour Party somehow!

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