The DWP won’t budge an inch on a notorious policy

Amber Rudd and the DWP logo
Steve Topple

The Department for Work and Pensions (DWP) has said that it’s refusing to change its position on a controversial policy. Once again, it’s in relation to Universal Credit.

The DWP: cutting again

Support for Mortgage Interest (SMI) used to be a welfare entitlement. It covered the interest payments on people’s mortgages, up to £200,000, when they were unable to work. Former chancellor George Osborne announced in 2015 that it was going to be stopped. The DWP ended the benefit on 6 April 2018.

Now, people can take out an SMI loan from the government. But there are catches to this. It will only pay a person’s mortgage interest up to a rate of 2.61%. Also, it being a loan, the claimant has to pay it back – with interest set at the government borrowing rate, which goes up and down.

But a question from a Labour MP exposed that the DWP is unwilling to give way on another controversial aspect of SMI loans: the 39-week waiting time.

Asking questions

On 4 January, Labour’s Grahame Morris asked the DWP if it would:

reduce the number of weeks required for a claimant to be in receipt of universal credit in order to be eligible for support for mortgage interest payments.

Currently, someone has to wait 39 weeks from making the claim for an SMI loan to actually getting a payment. Responding to Morris, DWP parliamentary under-secretary Justin Tomlinson said:

Working age claimants will need to claim for a period 39 weeks before Support for Mortgage Interest (SMI) loans can be paid. It is reasonable to expect that homeowners should make arrangements by working together with their lenders to meet their housing costs during short terms of unemployment and sickness.

But sometimes it doesn’t work out like this. As the website Benefits and Work reported, one DWP claimant and homeowner faced repossession and had his credit score ruined. This was due to a catalogue of errors by the DWP. But also, as The Canary previously reported, since SMI changed to a loan, 58% of people entitled to it have refused one. It remains unclear just how these people have kept up with their mortgage payments.


Campaign group BENEFITS NEWS hit back. It told The Canary:

With little or zero income, a vulnerable person with a mortgage will find their lender less helpful than the DWP implies. It is likely that one full payment missed would lead to being passed to the collections department, who are often aggressive.

But as BENEFITS NEWS noted, the situation with the SMI loan is creating a perfect storm for people:


removal of SMI was a big mistake, leaving an estimated 60,000 to 80,000 with zero housing-related benefit help. It is wrong to remove a benefit and expect those claimants to now borrow it and with government interest on top of mortgage debt when incapacitated.

People with the loan are in a worse position as no lenders will re-lend, with growing debt.

The 39 week wait is ridiculous for people with no savings and who can’t simply sell and cope with the upheaval.

Perpetual chaos

Universal Credit is in constant chaos. So, this unwillingness to budge by the DWP is little surprise. But it surely sticks in the throat of people who, by buying their own home, thought they were safely investing for their future. Now, the DWP can’t even provide them with the most basic of support when life takes unexpected and often devastating turns.

Featured image via BBC Newsnight – YouTube and UK government – Wikimedia 

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