State Benefits Support for mortgage interest

If you are claiming Income Support, income-based Jobseeker's Allowance or income-related Employment & Support Allowance and you are a homeowner, your benefit may include additional support for mortgage interest (SMI).

Payments can be made towards a customer's mortgage interest payments for loans taken out to purchase the property or for specific home improvement loans.

 No guarantee can be made that the Department will meet a loan prior to it being taken out. No help can be provided towards housing costs such as payments of capital owed on a loan, insurance premiums or mortgage arrears.

From 5 January 2009, a temporary package of measures was introduced to provide extra help to new customers in light of the economic downturn. These changes will be reviewed when the housing market recovers.

Rules that apply to new claims from 5 January 2009

For customers making a new claim to benefit from 5 January 2009:

There is a waiting period of 13 weeks before help is provided at 100% of eligible mortgage interest.
The capital limit up to which mortgage interest can be met is £200,000.

There is a two year time limit on payment of mortgage interest but only for new Jobseeker's Allowance claims.
The changes will also help those who are already receiving benefit, but are still in a waiting period (under the old rules) for help with their mortgage interest at 4 January 2009:

Customers who have served 13 weeks or more of their waiting period by 4 January 2009 will be entitled to help with mortgage interest from 5 January.
Those who have served a period of less than 13 weeks at 4 January will receive help at the point at which they will have served a full 13 weeks.

Vulnerable customers who fall into certain specific groups, and people with mortgages taken out before October 2 1995, receive help at the 50% rate on capital up to £100,000 after waiting 8 weeks, and then they will receive the full rate on capital up to £200,000 after 13 weeks from their date of claim.

The higher capital limit of £200,000 will apply to these groups as well as the two year time limit for those on Jobseeker's Allowance.

Customers in receipt of help with mortgages over £100,000 under the new rules will keep the higher capital limit when they move onto State Pension Credit from a working age benefit for as long as they remain entitled to State Pension Credit.

Rules that apply to customers in receipt of help prior to 5 January 2009

If you are already receiving help with your mortgage before 5 January 2009, the help you receive will not be changed, and you will be treated under the old rules. If you stop claiming and a future claim links to your previous claim under the department's linking rules, you will be treated under the old rules. The old rules are as follows:

Different rules apply depending on whether the loan was taken out before or after Oct 2 1995
For loans to purchase the property (& home improvement loans) taken out after 2 October 1995, there is a waiting period of 39 weeks before help is provided, and 100% of eligible mortgage interest is paid from week 40.

Vulnerable customers who fall into certain specific groups, and customers with a loan taken out prior to 2 October 1995, receive no help for the first 8 weeks of their claim, 50% of eligible interest for a further 18 weeks and 100% of their eligible mortgage interest from week 27.
The capital limit up to which mortgage interest can be met is £100,000.
Rate of interest

SMI assists people with the interest on their mortgage. The rate is currently based on a standard interest rate of 6.08 per cent for six months from November 2008.

Some people will experience a temporary drop below 6.08 per cent. This is because it takes time to adapt our IT systems, but we are taking urgent action to ensure that customers do not lose out.

A corrective adjustment will take place, for a period of five weeks, from 2 February to 8 March 2009. During this time, customers will receive an increase in their benefit to compensate them for the earlier reduction. Then, from 9 March, benefit will be readjusted to the correct level with the standard interest rate set at 6.08%.


 

How to get a quote for Pinnacle Insurance plc Helpucover unemployment insurance

To get a quote for Pinnacle Insurance plc Helpucover accident, sickness and unemployment insurance click the quote link above and fill in a few details about your age and level of cover you require. You can choose between accident and sickness cover or unemployment, accident and sickness cover, as well as the waiting period you require before the Helpucover benefit pays out.

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