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

A worried man and the DWP logo
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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...

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 

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