Advice on Support for Mortgage Interest

Smudgeboy

Hi all

After being made redundant late last year, I'm approaching the stage where my money will have all but run out apart from my Job Seeker's allowance within the next month or two.

I thought I would soon be eligible for Support for Mortgage Interest (SMI) - especially after talking to the Citizens Advice Bureau a couple of weeks back.

However, after a quick and thoroughly confusing phone call with my local benefits centre, they've given me completely different information which, quite frankly, has scared the living daylights out of me.

Before I post the whole story on here, are there any SMI experts out there who would be able to give me some advice on exactly what I am and am not entitled to, and when?

Thanks

dmg24

Hi Smudgeboy,

There are several of us with experience of SMI, feel free to post away! It will help if you can give us details of any capital you have, if you live with someone, if they work etc. Also, if you have remortgaged at any time, and what you used the remortgage money for?

Smudgeboy

Thanks DMG . . . right, from the beginning:

I have a repayment mortgage of around £180,000 which I took out 3 years ago, when I moved to my current house, and it is due to run for 20 years from 2006 - to 2026. Monthly re-payments are around £1,280. I am single, no dependents and live alone. I have not re-mortgaged.

I was made redundant from a middle-management role at the end of 2008 with a minimal payout and signed on for JSA early January and, from January 12th, was put on contributions-based JSA. In early May I was offered a two-month contract role, which meant that from March 9th through May 26th I was working and not claiming.

When that contract ended, I signed back on, on contributions-based again, from May 27th and have been claiming ever since.

Obviously what little savings I had from the redundancy money and the contract have been dwindling, although Lloyds TSB (my mortgage provider) were very kind with offering me a payment holiday.

To cut a long story short, that payment holiday ended at the end of August, so at the end of September I will have to pay a £1,280 mortgage payment, and then I will go on to an interest-only scheme which means £824 per month from end-October onwards.

I spoke to the Citizens Advice Bureau a few weeks back and they said that, after 13 weeks, I would get a letter from the Job Centre about eligibility for SMI - which made me think that this would roughly co-incide with when I was due to start paying again - ie, now.

Having heard nothing from anyone, I've spent the last five working days trying to get through to my local Benefits Office - on my sixteenth call (I've been logging them!) I finally got through to someone, but in the Income Support team, not the Jobseeker's Allowance team.

She wouldn't put me through (they were too busy) but said she would get someone to call me back on Wednesday - but meanwhile, she told me that the 13-week eligibility period doesn't even start until I move from contributions-based JSA to income-based JSA (the CAB had said it was 13 weeks from when you actually sign on).

If the lady I spoke to today was correct, I won't be eligible for SMI until sometime around January next year - and I have about £2,000 left in the bank.

My questions are:

1. When exactly does my eligibility start - when I first signed on, the second time I signed on, or not until I switch to income-based JSA?
2. Why was I put on contributions-based JSA when that would preclude me from eligibility for SMI - it feels like I am being penalised for working and contributing NI for 25 years straight.
3. If I'm not eligible for any help before January next year, how do I pay my mortgage (or interest?)

Feel free to fire more questions if I've left anything un-answered - thanks in advance!

alwaysonthego_2

You will be eligible for MPI after 13 weeks of you being on IBJSA. You will not get it whilst you were on CBJSA. This is because anyone who has paid enough NICs can claim it no matter how much household income or savings are.

If the CAB have misadvised you, you should go and speak to the superviser of the bureau who will offer the adviser retraining.

If you are having problems with your mortgage you should contact your lender and try and negotiate with them.

Whilst on IBJSA they will only pay MIP for 2 years.

Smudgeboy

Thanks alwaysonthego.

That's the problem, I've been in almost constant contact with my lender - they've given me the payment holiday, and the best they can offer now is moving to interest only.

As you'll see from that, the sums just don't work out. From where I sit, it seems I will either have to go massively overdrawn or go into mortgage arrears - or put my house up for sale.

I have to say, the attitude of the government towards older, white-collar professionals (more and more of whom are finding themselves in this siutaion) seems to be "hey, you had 25 years working, what are you complaining about?". :mad:

dmg24

alwaysonthego wrote: »

You will not get it whilst you were on CBJSA.

I would disagree with this, as the OP will have an underlying entitlement to IB JSA as a result of the SMI.

I have found this that backs up my thinking, in particular the following:

Since 5 January 2009, new SMI measures were introduced which, among other changes, reduced the waiting period to 13 weeks. This has changed the position and made it possible for some claimants to both be in receipt of contribution based JSA and potentially eligible for SMI, having completed the waiting period.

After the 13 week stage, if the contribution-based JSA claimant meets the qualifying criteria for income-based JSA (and housing costs will now be taken into account in the assessment), they can be awarded SMI. If they are still entitled to contribution based JSA they will continue to receive this, with income-based JSA as a top up until their six month period is completed, at which point they would be transferred to income-based JSA. Note that income-based JSA, unlike its contributory variant, takes into account both savings, and the financial circumstances of any partner. A person on contribution based JSA with significant savings, or a working partner, may therefore not be eligible for income based JSA.

OP, it would be worth printing off the above linky. I would hope that the JCP would not argue with a statement from HM Treasury (but you never know)!

NASA_2

I think what alwaysonthego was saying is that if someone claims JSA(C) only then they will not get any help with mortgage costs.

The claim would have to be a JSA(IB) claim (I'm aware Dookar may correct my use of the terms here) for the 'top-up' to be payable.

Smudgeboy

Thanks dmg24, I'll certainly give it a try - not much else to lose at the moment.

NASA, the annoying thing is I don't get to 'choose' whether I get contribution-based or income-based - I was simply told that contribution-basedwas what I was getting.

Anyway, some informative answers and a ray of hope - much obliged to you all.

dmg24

NASA wrote: »

I think what alwaysonthego was saying is that if someone claims JSA(C) only then they will not get any help with mortgage costs.

The claim would have to be a JSA(IB) claim (I'm aware Dookar may correct my use of the terms here) for the 'top-up' to be payable.

No, she wasn't (sorry always, you know I love you ). This misinformation has been posted by several people - quite possibly because the JCP do not know the correct information themselves.

alwaysonthego_2

dmg24 wrote: »

No, she wasn't (sorry always, you know I love you ). This misinformation has been posted by several people - quite possibly because the JCP do not know the correct information themselves.

I lurve you too dmg!!

I did mean that they would not be entitled to MIP whilst being on CBJSA only.

They would only get it if they had receipt of IBJSA after 13 weeks.

Is this not correct?!

alwayshavingago

If you are in receipt of JSA (CB) and have elligable housing costs ie the mortgage you will become etitled to JSA (IB) afer the 13 week waiting period as the housing costs became part of your applicable amount for this benefit at this time. So you will receive JSA (CB) topped up by JSA (IB) you will have needed to make a claim for the housing costs though, I think the form is MI 12 but not sure and unable to check at the moment.