A DWP minister just poured salt on thousands of people’s wounds

A worried man and the DWP logo
Support us and go ad-free

A Department for Work and Pensions (DWP) minister has just poured salt onto the wounds of tens of thousands of people, having already injured them twice before.

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 this was going to stop. 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.

Currently, someone has to wait 39 weeks from making the claim for an SMI loan to actually getting a payment. But on 9 January, parliamentary under-secretary Justin Tomlinson told Labour MP Grahame Morris the DWP wouldn’t budge on this waiting time. Now, it appears to have dealt another blow to homeowner claimants.

More questions, more answers

Morris asked the DWP on 10 January if it:

will ensure the rules in relation to support for mortgage interest loans mean that the 39 week waiting period is not reset when a claimant receives any income.

Tomlinson again answered:

Read on...

Support us and go ad-free

We operate a zero earnings rule for Universal Credit in Support for Mortgage Interest (SMI). Receiving any earned income during the wait period or during receipt of SMI loan payments will mean that the claimant will not receive loan payments. The zero earnings rule requires claimants to satisfy a waiting period of nine consecutive Universal Credit assessment periods with no earned income before the claimants can receive loan payments.

A triple whammy

So, people ‘do the right thing’ investing in property. But the DWP has hit them three times if they’ve fallen into difficulty. Firstly, it scrapped their benefit, replacing it with a loan; another one on top of their mortgage. Secondly, it makes them wait up to nine months before giving them any support. Thirdly, if you earn even the smallest amount under Universal Credit, the DWP cancels your payments. You then have to go back to the drawing board.

“Icy disregard”

The DWP’s attitude has incensed campaign group BENEFITS NEWS. It told The Canary:

The old SMI benefit was critical towards keeping a sole roof over vulnerable persons’ heads.

But even that didn’t pay actual repayment mortgages or capital. It paid a pittance towards interest payments. So to remove that benefit and replace it with a loan was a hit below the belt.

 

Now we hear under Universal Credit any income will render a claimant stuck. So, they won’t even get the sordid DWP loan payments. It just leaves us shuddering at the icy disregard of this rotten government.

We remind the DWP  just who is worst affected by its policy. It’s very sick and disabled people, pensioners and low income groups.

The ongoing chaos with Universal Credit shows no signs of abating. So it’s easy to miss what seem like small details such as Morris’s question and Tomlinson’s answer. But this kind of pernicious stubbornness by the DWP underscores its attitude generally. Moreover, with around 58% of people entitled to an SMI loan refusing one, that’s 61,000 more people the DWP has left in a state of precarity and worry.

Featured image via Bhernandez – Wikimedia and UK government – Wikimedia 

Support us and go ad-free

Get involved

  • Follow BENEFITS NEWS on Twitter.

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us