Number of people in receipt of DWP mortgage support falls substantially to 18,000
Only 18,000 claimants out of 103,000 have opted to continue to receive Support for Mortgage Interest (SMI) under a new loan arrangement.
SMI had previously been paid as a free benefit covering the interest on mortgages for those claiming benefits such as Pensions Credit, Income Support and Universal Credit.
However, in the 2014 Budget, it was announced that payments made after April 2018 would need to be repaid when the property was sold or transferred into new ownership.
Under the new system, the 103,000 recipients of the SMI benefit are being offered the option of taking up the SMI loan, but only 18,000 have so far opted to do so, leaving 85,000 who have either declined or not yet made a decision.
Claimants are free to change their mind at any time, the official Department for Work and Pensions (DWP) have said.
The figures issued by DWP show that successful phone contact had only been made with 72,000 claimants. Letters had been sent and telephone contact attempted for a further 27,000 claimants while no telephone contact had been attempted in the case of 4,000 claimants.
A DWP spokesperson said: “Over time, someone’s house is likely to increase in value, so it’s reasonable that anyone who has received financial help towards their mortgage should be asked to pay that back. People who sign up to the loan will continue to get help with their mortgage interest and it is only repayable if there is available equity when the property is sold.
“If people decide to decline the loan now but change their mind in future the loan can be backdated so in effect there would be no break in payments. We have already contacted everyone currently in receipt of SMI to explain the change but we are making sure people have time to review the documents, obtain advice and consider their options.”