BARNSLEY east MP Stephanie Peacock has warned that ‘chaotic’ changes to mortgage support will put low income households at risk of debt.
She has criticised a government move to change mortgage support for those on low income from a benefit to a loan and said it could cause hardship for homeowners on low income, and create problems for people who want to downsize or move to a care or nursing home.
Support for Mortgage Interest (SMI) changed from a benefit payment to a loan on April 6. Only 14 per cent of claimants had agreed to take out the loan and 30 per cent had already declined the loan. As many as 5,000 people had not received an initial letter from the Department for Work and Pensions just two weeks before the change was due to take place. The DWP had also not managed to contact more than a third of claimants by telephone to explain the change.
Opponents of the change claim there is a danger people who don’t take out a loan could try to manage by cutting back on essentials like heating instead. There are concerns too that many could be at risk of going into arrears.
According to the government’s latest figures, 90,000 people receive SMI, a large number being pensioners or people of working-age who receiving benefits for disabled people.
People will have to pay back the loan if the property is sold which could make it harder for people to downsize in later life and may also be a problem for people who need to move because they need specialist residential care.
Stephanie pressured the government on the issue by tabling a number of parliamentary questions. She forced the government to admit that despite six-weeks being deemed a necessary notice period to instruct SMI recipients of changes, five per cent of recipients had still not been contacted by this time.
Stephanie said: “Support for Mortgage Interest is an essential lifeline that helps to keep a roof over people’s heads, and this shows our out-of-touch government isn’t thinking about the impact on homeownership this will have.
“I forced the government to admit that they had fallen well below their own standards that they set themselves when making these changes, and this is unacceptable.”
