Support for Mortgage Interest Money Advice Liaison Group (MALG) - - PowerPoint PPT Presentation

Support for Mortgage Interest

Money Advice Liaison Group (MALG) London Regional Meeting, 24 April 2018

2 Department for Work & Pensions

• No impact on available support

Background

FISCAL CONSOLIDATION

• Costs rise with interest rates
• Help at point of need
• Balance – individual need and taxpayer

FAIRNESS SUSTAINABILITY

• Helps towards mortgage interest for homeowners receiving

income-related benefits

• Objective: to prevent repossession as far as is possible

OVERVIEW

3 Department for Work & Pensions

The process

Communications: Individual letters FAQ Booklet Telephone calls (Serco) Take-up loan No loan No further communication Benefit stops (6 weeks) Sent loan agreement & charge form with completion guidance Benefit becomes loan payment

• At least 6 weeks given to

consider options Agreement & charge form returned

4 Department for Work & Pensions

Loans can be backdated to 6 April Voluntary payments at any time Payable

• nly if

sufficient equity Current Gilt rate [1.5%] Bank of England AMR 2.61% Lender Claimant

How will SMI Loans work?

Same level

• f support

as with benefit

Applied to set limit

Standard Interest Rate (SIR) Interest bearing loan Usually secured as 2nd charge on property Repaid on sale or transfer Introduced 6 April 2018

5 Department for Work & Pensions

How will LMI work? (continued)

• Repayable only if equity available
• Past payments as a benefit
• DWP - Loan issue, management & recovery
• Accepting or declining the SMI loan at any time
• Can be backdated to 6 April 2018

6 Department for Work & Pensions

Vulnerable claimants

• Process in place to help claimants who may lack the mental capacity

to make financial decisions

• Referral to specially trained staff

PROCESS

• In such cases benefit may continue until at least November 2018
• Claimant will need representative (power of attorney/Deputy by the

Court of Protection/Scottish equivalent)

• DWP will appoint Financial Deputy/Intervener where one not in place

ATTORNEY/DEPUTY CONTINUED BENEFIT

7 Department for Work & Pensions

Current status

• All current claimants contacted by letter
• Telephone contact
• Take-up of loan and stated intention to take-up increasing
• DWP Focus

– Returned Forms – Seamless Transfer to loan for claimants and lenders

• Factsheet available for stakeholder use

8 Department for Work & Pensions

Further SMI Information

• Stakeholder factsheet available from DWP – speak to me or

DWP colleagues in today’s session

• Visit: www.gov.uk/support-for-mortgage-interest for further

information