Change to mortgage support represents homelessness risk, say Liberal Democrats

Photo: Ken Bennett

Councillor John McCann

The Shadow Cabinet Member for Finance and Deputy Leader of the Liberal Democrat Group, Councillor John McCann, is proposing a motion to the next meeting of Oldham Council (8 November 2017) that condemns the government for withdrawing a financial support scheme for older benefit claimants who are homeowners.

Councillor John McCann explained: “The current Support for Mortgage Interest or SMI scheme administered by the Department of Work and Pensions is being scrapped on 5 April 2018. It will be replaced by a repayable loan.”

“Until now, homeowners on a qualifying benefit, such as income support, income-based Job Seekers’ Allowance or Pension Credit, have been able to get some help towards the interest charges levied on a mortgage or home improvement loan, and this help has not had to be paid back.”

“From April, such claimants will be asked to sign up for a loan scheme where they will continue to qualify for support, but this support will be in the form of loan payments that have to be repaid when the home is sold or if ownership is transferred.”

“The Oldham Liberal Democrats do not feel that this is right. Such homeowners may be deterred from signing up for the loan scheme and this may mean that they start to get in arrears with payments and their home could eventually be repossessed. However if they sign up for the scheme they will be building more debt that will eventually be recovered from them when they give up their house.”

Councillor McCann is backed by his colleague, Liberal Democrat Group Leader Councillor Howard Sykes MBE.

Councillor Sykes said: “These changes are being brought in for both new and existing recipients. There is no proposal to offer existing claimants transitional support which is grossly unfair.

“The Department for Work and Pensions has estimated that of the 140,000 households currently receiving SMI around 50% are of pension age.

“We are keen to champion their cause to fight for the continued existence of the current SMI scheme and the abandonment of a proposal that could make older people homeless. In our motion, we also call on Council officers to bring forward a report identifying the impact these changes will have.”