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UC and Mortgage payments

Roberttogiannii

Hello community,

I lost my work three months ago and I am paying mortgage. I checked that I am eligible to UC only given that my capital is below £6000.

My monthly mortgage is about £900 / month. If I claim UC and if successful, who pays the lender, DWP or myself.

A friend told me that DWP directly pays his rent to the landlord, will it be the same when it comes to mortgage payments?

will my lender knows that I am on UC now?

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Comments

poppy123456

You can't claim for help with your mortgage through UC, your friend claims for help with their rent, that's different.

Any help with your mortgage would be for the interest payments only and this is just a loan, which needs to be repaid back if you sell your home in the future. It's call Support For Mortgage Interest. (SMI) See link.

You also need to be entitled to payments of UC for 3 months in row before payments start. Details in link.

https://www.gov.uk/support-for-mortgage-interest/what-youll-get

This would be paid straight to your lender.

Roberttogiannii

Thanks for the reply poppy123456

Is it optional not to claim for Support for Mortgage Interest. Can I decline it? Will I get any housing allowance which I will end up using to partly pay my monthly mortgage payments?

Kimi87

As you have a mortgage then no housing allowance is available to you, that is only for people who rent.

Applying for SMI is optional. If you are not interested then you simply don't apply or fill in the extra form (as detailed in the link).

Roberttogiannii

In such circumstances, do I need to submit my mortgage statements or proof of the amount I pay monthly in the assessment interview?

Roberttogiannii

In such circumstances, do I need to submit my mortgage statements or proof of the amount I pay monthly in the assessment interview (in which they establish weather or not I am eligible at all for any UC payment)?

poppy123456

https://forum.scope.org.uk/discussion/comment/967565#Comment_967565

No, you will not need to do that. As I advised you will not be able to claim housing costs for help with the mortgage.

If you’re a single person then your maximum UC entitlement will be £393.45/month.

Your entitlement to UC is not based on the bills you have to pay such as energy, mortgage, water, phone etc etc.

Roberttogiannii

@poppy123456

Thanks could not be clearer.

One more question, what documents typically required in the first eligibility assessment interview after I make my first claim?

poppy123456

If your ID can't be verified online you will need to take it with you to your first appointment. See link.

https://www.gov.uk/guidance/how-to-verify-your-identity-for-universal-credit

If you have capital of more than £6,000 you'll likely need to take bank statements with you.

Roberttogiannii

The application asks how many current accounts and savings accounts I have and the amount in each account. Will the total in all accounts be considered the capital I have?

Do I need to collect the statements for the interview, or will UC check directly with the bank or other credit agency?

poppy123456

All the money you have, regardless of where it is, unless it's in a Pension pot, as well as any other capital you have will all count towards the capital limit.

If it's less than £6,000 you will not need to provide bank statements. If it's more than yes you maybe asked to provide them. They will not check bank accounts directly, at least not for this reason.

Roberttogiannii

I have been waiting for a tax refund from HMRC for a few months till date and have not submitted my UC claim pending the tax refund/credit from my previous employment.

It may take an additional five months for HMRC to determine my tax refund.

Will the refund count toward my capital? Can I file UC now, and when I receive the refund, update my capital if it counts?

I hoped HMRC would pay me timely and that I could survive a few extra months without applying for UC, but it is not happening...

OverlyAnxious

https://forum.scope.org.uk/discussion/comment/990936#Comment_990936

Hi,

A tax rebate usually counts as income during the assessment period in which it's paid, and then becomes capital at the end of the next assessment period.

Depending on your circumstances, you may have a work allowance of £673 for each period. Any extra income above that creates a 55% deduction from your UC. So for example, if you got £873 tax rebate, only £200 of that would be above your work allowance. 55% of £200 is £110. So your UC payment for that month would be reduced by £110.

If you don't use the money by the end of the next assessment period, and it puts you above £6000 in total, then you would have to update your capital online through the journal at that point. There would be a deduction of £4.35 per month for every £250 you have above £6000.

Regarding starting the UC claim while waiting, I would recommend that you do start the claim as soon as possible and then deal with the tax rebate in the future.

Roberttogiannii

@OverlyAnxious

Thanks for your thorough explanation…

Roberttogiannii

@OverlyAnxious

Is the £673 in an assessment period net profit (after I pay my mortgage and service charge) as I work some irregular hours of self-employment, or is it gross revenue?

I started the claim and was asked to provide my income for the last 12 months I was employed. Is that a typical question for all applicants who lost their jobs before they applied?

OverlyAnxious

https://forum.scope.org.uk/discussion/comment/992075#Comment_992075

It's gross revenue. UC don't pay for mortgages or deduct mortgage payments from income calculations.

If you had variable earnings before, including irregular self-employment, that might be why UC have asked for 12 months of statements in this case. I don't think they usually go back that far but it does depend on each persons circumstances.

Roberttogiannii

@OverlyAnxious

Thanks again. I applied for UC last week and had my first interview. When will I receive a letter/journal update confirming my monthly payment?

Kimi87

Your payment statement will be available 4-6 days before your payment date.

Roberttogiannii

Dear Forum,

My ex-employer five years ago in 2020 paid my end-of-employment fund in 2024, which he taxed at 45%. I wrote to HMRC claiming a refund as I was unemployed for some years afterwards whilst being on UC.

Do I have to repay the UC I received in the past from my end-of-employment/compensation payment?