Mortgage support changes risk causing ‘real hardship’, warn Labour

Low-income homeowners going without essentials to avoid accepting Government loan.

From today, 6th April 2018, financial support through the social security system for homeowners on low incomes to pay mortgage interest will come in the form of a repayable loan.

Labour has warned that these Government loans, which will be overseen and managed by the private company Serco, risk causing “real hardship” for homeowners on low-incomes.


Those eligible for Support for Mortgage Interest include people on very low incomes who are claiming a qualifying benefit because they are unemployed, there is a shortfall in their pension or they are ill or disabled, after a 39 week qualifying period.

The Government originally estimated just 5% of working age recipients, and 8% of pensioners would not take up the loan. However, as of 21st March, 30% of all claimants (27,000 people) had already declined the loan and only 14% (13,000) had accepted.

This has led to calls for the Government to rethink the changes, including Age UK who warn that pensioners may try to cut back on everyday essentials to avoid accepting a loan.

According to the latest government figures, 90,000 people receive SMI, of which just under 40% of are low income pensioners in receipt of Pension Credit.

The government’s own figures reveal that as of 21st March 5,000 people had not even received an initial letter from DWP informing them of the change. And Serco has failed to contact another 31,000 – over a third of claimants – by telephone to explain the change.

Under the Government’s plans, people who are elderly or disabled and need to move to specialist residential care would be forced to pay back the loan on selling their home, leaving them with less to cover the cost.

Margaret Greenwood MP, Labour’s Shadow Work and Pensions Secretary, said: “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.

“Even at this late stage the government could and should think again and halt this change.”

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