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Mortgage Interest : To Be A Loan Under UC !!! - Page 2 - Carers UK Forum

Mortgage Interest : To Be A Loan Under UC !!!

All about money
You may as well sell your house to one of those cash buyers, blow it all on a cruise then go to the local council and say you’re homeless!

You’d get free care, free housing, free dfg if needed, free everything!!
Unfortunately Wayne that wouldn't work as there is something called 'deprivation of assets' where councils don't have to provide care if they can prove that assets were sold when care is looming. There is no set time limit to this
https://www.ageuk.org.uk/information-ad ... of-assets/

This is different to, but often confused with, the 7 year inheritance tax rules that mean any gifts made 7 years or more before death are excluded from inheritnace tax. If the giver doesn't last the 7 years then those gifts are taxed. Luckily this only applies above certain threshold which is certainly over £325000 and rising , I believe

Whether to own properly or not is an individual decision. In care terms , those with assets have more choice and freedom where and to spend their money. Those without assets may have easier access to benefits and support but have no say if, how and where that care is provided

Hope this helps
The penny has finally dropped ... or has it ?

https://www.theguardian.com/money/2018/ ... erest-loan

Anger as thousands unaware they face a ‘second mortgage.’

Calls for the delay of a new loan set to replace a state-backed benefit in just 10 weeks’ time

The government has been called on to delay a new “second mortgage” scheme, which replaces a benefit for homeowners on low incomes, after just one in 20 affected households have signed up for it.

From April, the government is axing “support for mortgage interest” (SMI) which helps financially constrained homeowners with their mortgage. It will be replaced with a controversial system where the government offers to loan people the money, which will be repaid later with interest.

However, new figures have shown that just 6,850 households have signed up for the scheme out of the 124,000 currently receiving the SMI benefit, prompting calls for the changeover to be delayed.

The replacement of SMI, which has been around since 1948, will result in tens of thousands of people, many of whom are pensioners, being saddled with what amounts to a second mortgage, according to critics.

It was originally introduced after the second world war as a short-term lifeline to those who had lost their job, or become ill, in order to help them get back on their feet. Many of those who claim at present are of pension age and retired, and can continue to do so as long as their mortgage is outstanding. The government says it costs the state £205m a year and is unsustainable. It announced in 2015 that the SMI would be replaced by the state-backed loan, which comes into effect in April.

A Freedom of Information request from mutual insurer Royal London to the Department of Work and Pensions (DWP) revealed the take-up figures. It has called for the government to delay the changes to allow for more information to be issued.

“It is truly shocking that many thousands of low-income families are yet to receive the information they need on the fact that their mortgage interest help could be switched off in just 10 weeks. If thousands of people fail to complete the process in time, they could face real hardship, and even potential repossession, if they can no longer afford to meet their mortgage interest bills,” says Helen Morrissey of Royal London.

“The DWP should pause the implementation of this policy until it is confident that everyone has had full information about the changes, and the time and support to make an informed decision.”

Of the 124,000 people who claim SMI, 57,000 are pensioners. Information about the changes started to be sent out last July, but not all claimants have been contacted as yet, according to the DWP.

Under the new system, the DWP will continue to make regular payments to the recipients’ mortgage lender, but interest will be added every month to the total owed. The longer the loan is in place, the more the recipient will have to pay back. However, the mortgage holder does not have to pay it back until the property is sold, or transferred to someone else, although they can make voluntary repayments.

Those in favour of the scheme have argued that it is not the role of the UK taxpayer to subsidise mortgage payments for an asset that can be passed on to children after their death.

The DWP did not respond to a call seeking comment on the new figures.

No great surprise to any regular readers of the NEWS section ?

The COMMENTS section following the above article is HIGHLY recommended !!!

Times they are a changing ... for the worst ?
First real article following the change in Government policy :

http://www.bbc.co.uk/news/education-432 ... ting-story

'We fear benefit changes could lose our disabled sister her home.'

Life began at 40 for severely learning-disabled Colleen say her sisters, when she moved into her own home.

She is living happily in her Coventry house, 11 years after leaving unsuitable residential care, thanks to a carefully-crafted network of 24-hour care and a range of state benefits.

But due to the impending removal of the housing part of her support, known as Support for Mortgage Interest (SMI), that security has been mired in uncertainty and anxiety.

Colleen is one of 124,000 households in England who receive this particular benefit.

It helps them repay the interest on their mortgages and nearly half the recipients are pensioners.

However, within weeks the benefit will be axed and a loan offered instead.

Those who have not signed up to the new government scheme face losing their mortgage support.

Security at risk?

Though small, the current funding arrangement makes enough difference to enable Colleen to live on her own, and not in a care home.

With no capacity to make her own decisions, her sisters, Felicity Banbury and Fiona Garrigan, look after her interests.

They fought hard for 13 years to find her somewhere comfortable, safe and suitable to live.

Felicity says the impending changes put that security at risk.

"The biggest worry was that we have been given six weeks to make what are really serious financial decisions affecting Colleen's future," she said.

"If we don't make the right decision, she [Colleen] could get into arrears and even lose her house."

Fears of arrears

A lack of timely communication about the new rules, by the Department for Work and Pensions (DWP), has stoked up fears of arrears, and ultimately evictions, for some vulnerable and elderly people who receive SMI.

Beatrice Barleon, the policy manager at the learning disability charity Mencap, said: "Many rely on this benefit to pay for their accommodation, and poor communication around these changes has led to people fearing that they will lose their homes as a result."

By late January fewer than 7,000 of the 124,000 affected households had signed up for the new loan scheme.

And the latest statistics from the government reveal that 5,500 people have still not been contacted about the options ahead.

With just four weeks to go until the current benefit is withdrawn, neither Colleen nor her sisters have received the full information they need from the DWP (via private firm Serco) to be able to make a judgement on the options ahead.

In fact they were contacted for the first time about the forthcoming changes only three weeks ago.

Shadow housing minister Melanie Onn said: "It is shocking that with just weeks to go people are still yet to be contacted about the end of support for mortgage interest."

Extra time

Since the BBC contacted the DWP with these concerns, new rules have been attached to the new regulations

This should give the most vulnerable SMI recipients - those with someone appointed to act for them - extra time to make their decision.

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 if there is available equity when the property is sold.

"We have been contacting people to explain the change and signpost them to independent advice giving them plenty of time to make a decision.

"But we understand that there are vulnerable people including those with severe learning disabilities or dementia, many of whom have someone acting on their behalf, who need extra support and time," said the DWP spokesperson.

The DWP also said anyone who had not yet been contacted about the changes would now remain on SMI until they had been reached and guided through the options.

Mrs Barleon from Mencap said this was not the end of her concerns.

"The worry is now that innovative schemes such as homeownership for disabled people, will no longer be available in the future," she said.

Before moving into her own home, Colleen spent 26 years in residential care, which her sisters say did not meet her needs.

"When she was part of statutory services, she lived with others and we saw a deterioration in her condition," said Felicity.

Felicity welcomed the late decision to give the most vulnerable SMI recipients more time to consider their options.

But she said she was still very concerned about those without the sort of support she offers to Colleen, and possibly without a voice to argue their case.

Fairly under the radar as I type ... next month onwards should see more articles being posted.
Better late than never ?


Labour has warned that vulnerable people may struggle to pay their mortgages because of benefit changes.

About 90,000 people on certain benefits claim support for mortgage interest (SMI) but from Friday the benefit will be replaced by government loans.

Figures suggest 27,000 SMI recipients - 51% of those contacted - say they will not take up the loan.

Labour says there is a risk elderly people may cut back on essentials like heating rather than take the loan.

The new state-backed loan, secured against the mortgaged property with interest added each month, would not have to be repaid until the property is sold or transferred to someone else.

'Halt this change'

The government says it is reasonable to ask someone who has received help towards their mortgage to repay it, as their home is likely to increase in value.

But shadow work and pensions secretary Margaret Greenwood said: "Even at this late stage, the government could and should think again and halt this change."

She added: "It is worrying that the government seems determined to push ahead with this change despite the risk of it causing real hardship for people on low incomes.

"Many of the people who claim SMI are elderly or disabled, and it is extremely concerning that pensioners might try to cope without the loan by cutting back on essentials like heating."

The government is set to spend about £161m on SMI in the year 2017-18. As of 21 March, they had successfully contacted 54,000 people by telephone and tried to contact a further 31,000, as a follow-up to a letter explaining the change.

Of those contacted, 51% - about 27,000 people - had said they intended to decline the offer of a loan, 13,000 said they would accept it and 14,000 said they were undecided.

A Department for Work and Pensions spokesman said: "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."

Having capital is one thing , even if that capital is a roof over one's head.

Having income to meet all expenditure is another ?

In essence , now just like any other citizen facing the same problem.

One snag , if that citizen is unable to work , said income is controlled by Government policy !
It's a very interesting and complicated topic. The prices are keep rising, and the government is doing strange things. I have taken a loan and now it's hard for me to pay it back.

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I am locking this thread as it is attracting spam.

Melly1 moderator