Today in Parliament I challenged the UK Government over upcoming changes to Support for Mortgage Interest (SMI) which have not been properly communicated and will hit low-income households hard.
Support for Mortgage Interest is currently paid to 124,000 people and provides help towards interest payments on mortgages to those who are out of work or of pension age.
SMI is currently paid as a benefit, but from 6 April 2018 it will be paid as a loan secured on a person’s house which will attract interest charges. Labour has opposed this change, arguing that it significantly weakens the safety net for mortgage-payers who now have to wait longer for less support. Last year the Government also increased the waiting time between an initial benefit claim and first SMI payment up to 39 weeks – the waiting time had been reduced to 13 weeks by the last Labour Government.
In the Work and Pensions departmental question time I said “This change to support for mortgage interest will hit thousands of low-income households -; half of whom are pensioners -; and it will hit them very hard. Does the Minister acknowledge that this change has not been well publicised, and at the very least the Government should pause and communicate what the change will actually mean for people financially?”
I’ve spoken to pensioners who make up almost half of those receiving SMI and they are frustrated that Government funded support is available to others in the form of Housing Benefit, but this relatively small group of people will no longer get help. There are few options for people living in their own home but struggling with the mortgage, where social housing would be unable to pick them up and they are unlikely to be helped with housing benefit in the private rented sector.