DWP Help with Mortgage Interest

Danday

WhenIam64 wrote: »

@Danday. The best place to go to understand what the intent was for such a change is the Impact Assessments that are given to the HoC.

Have a look here https://www.parliament.uk/documents/impact-assessments/IA15-006D.pdf

The legislation does not always match the IA but it will be close. Search for "repossessions".

A key phrase is "..the benefit will be financed in a more sustainable and equitable way". The word 'equitable' has a specific legal meaning. It is possible, they made this change under threat of a legal challenge.

Thank you for that valuable link. It is obvious that it was cost driven by the government. Overall, it does seem to be a fair proposal but what shouts out to me is that if you remove all mention of housing, mortgages etc and put in place costs of living, we do not appear to be far from having all benefits treated as loans. There is mention in that report more than once that the debt incurred through support will be recovered when the claimant enters the work place. This to me is nothing more than the Student Loans scheme where all awards of all benefits will become repayable.
No where in that report goes into the effect of what will happen if the loan is not taken up and there are no other resources (family, insurance policy etc) available to maintain the mortgage interest payments. Are we to accept that that category will suffer repossession proceedings even if the mortgage debt is say 10% of the value of the asset?

I will have a look at the legal definition of 'equitable' and 're-possessions' which may help.

thanks once again.

Danday

Additionally I do note that the government are assuming that there will be 13% overall of current recipients of mortgage interest help that will not sign up to the loan scheme. The current figure of 89% is way above what they anticipated if nothing changes.

This new scheme and what it offers is looking like what is happening with those of retirement age not claiming Pension Credit even where the DWP know full well that an award is due. The government is fully aware that in excess of £3.9bn is not being claimed every year. That is a national scandal and this new loan scheme appears to be going the same way.

Oblong1

You claim benefits DANDAY? After all your moaning about other people I'm surprised you allow yourself to stoop so low.......

Danday

Oblong1 wrote: »

You claim benefits DANDAY? After all your moaning about other people I'm surprised you allow yourself to stoop so low.......

Me moaning? When? I actually encourage people to get what they can off the government.
As for this thread it is about the new loan scheme for mortgage interest.
It just surprises me again that the government were expecting far more to join the system. Then I wonder if people really didn't need the previous help but used the system to their advantage. Now under the new scheme they will have to pay it back + interest it becomes a different story.

TOBRUK

Danday wrote: »

Me moaning? When? I actually encourage people to get what they can off the government.
As for this thread it is about the new loan scheme for mortgage interest.
It just surprises me again that the government were expecting far more to join the system. Then I wonder if people really didn't need the previous help but used the system to their advantage. Now under the new scheme they will have to pay it back + interest it becomes a different story.

I understand what you are saying, what you keep repeating - if people don't take up this 'loan' from government then they didn't need it to begin with. However, as someone who has turned it down at present (you can take it up at any time in future) and have all the paperwork (pages of it) they sent out 'offering this loan', plus three phonecalls from SERCO - the company they are using, asking if I wish to take it up!

They can't tell me how much exactly the interest per annum, which as I understand will be determined on the rate which they borrow to pay it, and what the rate of interest in future. In the paperwork it does state that the longer you have the loan, the more interest you will need to pay back. If I wanted to pay it off in the future, there would be a minimum 'voluntary' payment of £100 to pay at a time.

The DWP even asks you if you can ask family or friends to help pay the interest as an option! I think many (like me) will be wary of taking this up at the moment until they see how this works out.

You can say if I don't take it up then I didn't need it to begin with(as you continuously do it seems) but you do not know people's situation to comment. Personally, I live on a tight budget and my deciding not to take this 'offer' at the moment means that I will live on a tighter budget, as I would rather struggle than take this up at the moment. I am not in a position to work unfortunately, but I bought a house when I was working until my life changed completely. Luckily I have a very small mortgage, but that does not mean that managing isn't difficult.

So what I am saying is, all the paperwork on this loan and it's conditions isn't straightforward. You need to be a solicitor to understand all of it. Also 'serco' does not have a great reputation which is worrying. One paper said of Serco:

An offshore law firm regarded Serco, a company that runs sensitive government services in Australia and the UK, as a “high-risk” client, expressing concern about its “history of problems, failures, fatal errors and overcharging”, the Paradise Papers reveal.

Tommo1980

One only has to look at their history of providing custodial services in the UK to get a feel for the effectiveness of SERCO.

Danday

Thank you Tobruk. Your explanation and liking it to your own position has now resolved the issues that I could not understand.

Given everything what you have said, which seems sensible and straight forward, it still leaves the question as to where on earth did the government come up with the 87% take up. I will leave it at that accepting that like everything the government does and gives opinion on is probably no better or worse than you would hear in the local pub.

WhenIam64

where on earth did the government come up with the 87% take up.

Its a changing picture. Here are some ad-hoc stats on the matter. I'd point you to the following

Over half (51%) of claimants at 21st March who communicated their intention to the Department in a follow up telephone conversation have said they will decline the offer of an SMI loan.
One quarter (25%) are undecided. Just under one quarter (24%) indicated that they will accept the loan.

So most people have made up their minds on the issue and have changed their behaviours with regards to their financial arrangements. The scheme appears to come from the government's "nudge" department which of course does not exist now - nudge, nudge.

Stats : https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/694017/ad-hoc-statistics-release-conversion-of-support-for-mortgage-interest.pdf

Nudge department: https://www.gov.uk/government/organisations/behavioural-insights-team

Danday

WhenIam64 wrote: »

Its a changing picture. Here are some ad-hoc stats on the matter. I'd point you to the following



So most people have made up their minds on the issue and have changed their behaviours with regards to their financial arrangements. The scheme appears to come from the government's "nudge" department which of course does not exist now - nudge, nudge.

Stats : https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/694017/ad-hoc-statistics-release-conversion-of-support-for-mortgage-interest.pdf

Nudge department: https://www.gov.uk/government/organisations/behavioural-insights-team

The point I was trying to make is that when the government did their Impact Study prior to this scheme being rolled out they said that the vast majority would take up the offer.

extract of that study

We assume that 5% of working age claimants (those claiming through JSA, ESA or IS) and 8% of those of pension age will choose not to receive SMI when it is converted to an interest bearing loan (based on an analysis that indicates these are the proportions of each group who have access to funds from other sources, for example beneficiaries or parents).

It was clearly the government's worked analysis that approx. 87% would jump at the chance of getting on board. The recent FOI reply of a week ago states that so far there has been a 11% take up. The stats you have quoted are testament to the fact that the government got it wrong already. The stats that you quote show that 51% will not take it up ummm! A wee bit different from the ministers said in the study - I wonder why? NahThey wouldn't dare put a spin on that, would they??

John-K_3

Danday wrote: »

I would certainly hope so otherwise it is clear that they don't need the help now that is a loan but needed it when it was a benefit?

You know, for someone who!!!8217;s been happy to hold their hand out for state money for so long, you are awfully quick to cast aspersions on others who ask for help.

How about instead of criticising others who have decided not to ask for state assistance you put some effort into doing the same? You yourself were whining recently about having to have assessments to keep your claim going, it really is quite something that you get het up about anyone else getting help.

I genuinely cannot understand the bitterness and jealousy that some benefit claimants feel when other people also get some assistance.