The current lack of preparedness about the forthcoming changes to the Support for Mortgage Interest (SMI) rules is a “horror” that shows both the meanness and lack of foresight of the government, commented Stephen Lloyd MP, Liberal Democrat spokesman for Work and Pensions. It has emerged that around 100,000 mortgage holders could be plunged into hardship and, in some instances, lose their homes due to changes soon to be made to the Support for Mortgage Interest (SMI) rules. Previously, SMI was a benefit paid to people to help with their mortgage interest costs if unemployed or disabled. Last summer it was announced this is to be scrapped and replaced with a system of loans, on which interest will be charged. The Department for Work and Pensions announced the changes in the summer of 2017 and they are due to come into force this coming April. The changes affect 124,000 people, but so far only around 10,000 have registered for the loans, meaning well over 100,000 vulnerable people could be left high and dry without their mortgage payments being made. He said: “Every month we seem to be hearing yet more examples of this Conservative government being both mean-spirited and unintelligent; this mortgage interest benefit change is a classic example. It will force some homeowners into even more debt, and will force others to sell their homes putting themselves at the mercy (and cost) of their local council’s housing department. Which, naturally, will cost the taxpayer more in housing benefit than keeping them in their own house by paying mortgage interest payments. An absolutely ridiculous decision. “Furthermore, the government have extended the waiting time for the SMI payments to begin by an astonishing 23 weeks – on top of the original 16 week wait – so struggling claimants will now have to wait most of the year before even getting the new support. I wonder what their mortgage holders will have to say about that? “The Tories reputation for economic competence is being entirely shredded by this incompetent and, frankly, dim government. These changes must be delayed until more people are, at least, acknowledged by the DWP to have taken the necessary steps to adjust their mortgage re-payments. Otherwise we are heading for yet another policy car-crash.” SMI is a benefit given to people claiming Universal Credit or certain other income-related benefits who have a mortgage or who have taken out loans to make repairs to their home. It pays for the cost of interest on up to £200,000 of a person’s mortgage in order to prevent claimants from defaulting on their mortgage. However, the Government announced in the summer 2015 Budget that, in April 2018, SMI will be replaced by a loan of the same value, which is repaid (with interest) when they the loan is sold. SMI is a relatively inexpensive benefit, costing the Government around £300 million a year. According to homelessness charity Shelter, it provides support to around 200,000 families. It is considerably cheaper (at around £1,800 a year) than letting someone’s home be repossessed and then having to pay housing benefit to put that household in the rented sector (around £5,000 a year). In addition, the Government is extending the waiting period for SMI payments to begin from 16 weeks to 39 weeks. People struggling with mortgage payments may have to wait most of the year before they can get support.

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