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SIM changes due April 2018

BrokenBroken Member Posts: 40 Courageous
As from April 2018 the government are proposing(?) that SIM (the proportion of mortgage payments currently @ 2.61% of the INTEREST only) will become a LOAN with added interest. This is to be repaid either when the home is sold or when a claimant can afford to do so. Does anyone have any thoughts on this?

Replies

  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    @Broken

    So the government are proposing that mortgage interest payments will become loans not benefit payments?

    Has legislation for this proposal already been passed?
  • BrokenBroken Member Posts: 40 Courageous
    If it hasn't, it probably will. I am wondering if the government will also class rent payments as loans and as such those who have either a proportion or the full amount of their rent paid for from benefits (ENTITLEMENTS would in my opinion be the prefered terminology!), be obliged to repay with interest in the same way????
  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    This is worrying. Wouldn't affect me personally but would affect many people.
  • BrokenBroken Member Posts: 40 Courageous

    ### Found this online today #### 

    SCRAP THE PROPOSAL and consultations TO MAKE SUPPORT FOR MORTGAGE INTEREST FOR SICK / DISABLED AND UNEMPLOYED RECIPIENTS INTO A LOAN, WHEREBY IT IS REPAYABLE AND YOU INTEND TO PLACE A CHARGE ON PERSON'S PROPERTY - along with interest charges and administration fee.

    Why is this important?

    This proposal is grossly unfair! Persons that used to work but due to unfortunate circumstances became ill, disabled or unemployed already face very difficult conditions. 
    SMI is paid at a low interest rate, which often doesn't even meet what rate the mortgagee is having to pay. 
    For example SMI might be paid at £200 per month (or 4 week) on a £700 per calendar month mortgage, rendering that the benefit recipient has to find the remaining £500 as well as bills and living costs from the standard benefits they receive, which is excruciatingly difficult. 
    On the other hand a tenant may get for example a rent paid at £600 per month (4 week) and not be faced with paying any of this back. 
    The LARGE difference here means a disadvantage to the benefit recipients receiving the low £200 estimated in example Vs the £600 tenants receive. It means that what is intended as basic level of monies set to live on, mortgagees are having to scrape the rest of their mortgage payments and bills and food out of, whereas tenants don't and benefit from the full amount of benefit they receive, sometimes bills may be included in their rent and not on top. 
    This proposal is said to assure the tax payer that sick / disabled long term or unemployed do not gain from these Support For Mortgage Interest payments - except they don't - as the actual mortgage MUST STILL BE PAID. It can NOT be presumed that property rises mean sick / disabled / unemployed make gain based on the SMI lower interest contributions, therefore meaning they must repay the Government, along with more interest and administration fees to make the tax payer happy. You forget most of these SMI recipients WERE TAX PAYERS and entitled to benefits due to unfortunate circumstances. They also OWNED THEIR PROPERTY prior to becoming sick / disabled / unemployed and the Government is WRONG TO TRY TO CASH IN on the unfortunate's property! 
    Similarly the 'Court - scrapped' unlawful bedroom tax for tenants was another example of Government greed and unfairness - newly brought in and causing hardship and unfairness on many. Now my point on mentioning that - is tenants are still paid a lot more than the average mortgagee that claims SMI - therefore if the tenant's bedroom tax was found unfair in Court, then you can see a mortgagee receiving £200 month (4 week) towards a £700 per month mortgage and having to find that other £500 every month out of benefits MUST BE ABSOLUTELY CRIMINAL. Note most sick or disabled or unemployed persons on benefit can NOT remortgage, nor lose their homes willingly, they can't claim rent if they sold THEIR property.
    Now a shallow view that is being used is tax payers won't like mortgagees receiving benefits towards mortgage or buying a property, but as you can see a mortgagee has already paid tax to raise deposit, paid stamp duty at thousands of pounds, paid tax whilst earning up to the point of unfortunate circumstances, has taxable benefits, pays tax with bills or VAT and would have to pay more tax in future. 
    Sick / disabled benefits are already being cut back and many wont afford to keep their homes, let alone move forward in life, owing the Government either the SMI LOAN or on settling a CHARGE placed on THEIR PROPERTY on point of sale. 
    Further this Government has bled dry many sick / disabled / unemployed persons and no matter how these vulnerable pleaded their case to the rest of the public - it was ONLY when some employed recipients of TAX CREDITS realised they were under attack, facing cuts, that some more people realised this Government is actually wrong in taking monies from the poor and vulnerable. NOW THE POINT IS - sick / disablement / unemployment could happen to any of you at any time - so it is wise to support the less fortunate, in all walks of life, with an open mind! ONLY THE RICH WILL NOW SCOFF HERE!

    I am therefore calling for the rest of the public to support this Petition. It was suggested the proposed SMI loan or charge added to people's homes might be started in 2018 but the consultations were happening since 2011, I believe.

    ASK YOURSELVES - IF YOU WERE STRUGGLING TO MAKE ENDS MEET - BUT WERE TRYING TO KEEP A ROOF OVER YOUR HEAD - WOULD YOU WANT THE GOVERNMENT PLACING A CHARGE ON YOUR HOME? For those that don't know what that means, it would mean you can't move or sell without paying that CHARGE back - a charge that never used to exist and should never be brought in!

    Tenants - would you like to pay all the sums you have received in Housing Benefit back? HB paid at a lot higher rate - ie full or NEAR full rent paid?

    Working people - would you condone your poorly or disabled family member having such a noose - as a Government loan based on interest payments with extra interest and admin fees on top - or a charge added to their deeds.

    Think open-mindedly - this could affect any of you at any time!

    Thank you - please sign!

    SCRAP THE PROPOSAL and consultations TO MAKE SUPPORT FOR MORTGAGE INTEREST FOR SICK / DISABLED AND UNEMPLOYED RECIPIENTS INTO A LOAN, WHEREBY IT IS REPAYABLE AND YOU INTEND TO PLACE A CHARGE ON PERSON'S PROPERTY - along with interest charges and administration fee.

    Why is this important?

    This proposal is grossly unfair! Persons that used to work but due to unfortunate circumstances became ill, disabled or unemployed already face very difficult conditions. 
    SMI is paid at a low interest rate, which often doesn't even meet what rate the mortgagee is having to pay. 
    For example SMI might be paid at £200 per month (or 4 week) on a £700 per calendar month mortgage, rendering that the benefit recipient has to find the remaining £500 as well as bills and living costs from the standard benefits they receive, which is excruciatingly difficult. 
    On the other hand a tenant may get for example a rent paid at £600 per month (4 week) and not be faced with paying any of this back. 
    The LARGE difference here means a disadvantage to the benefit recipients receiving the low £200 estimated in example Vs the £600 tenants receive. It means that what is intended as basic level of monies set to live on, mortgagees are having to scrape the rest of their mortgage payments and bills and food out of, whereas tenants don't and benefit from the full amount of benefit they receive, sometimes bills may be included in their rent and not on top. 
    This proposal is said to assure the tax payer that sick / disabled long term or unemployed do not gain from these Support For Mortgage Interest payments - except they don't - as the actual mortgage MUST STILL BE PAID. It can NOT be presumed that property rises mean sick / disabled / unemployed make gain based on the SMI lower interest contributions, therefore meaning they must repay the Government, along with more interest and administration fees to make the tax payer happy. You forget most of these SMI recipients WERE TAX PAYERS and entitled to benefits due to unfortunate circumstances. They also OWNED THEIR PROPERTY prior to becoming sick / disabled / unemployed and the Government is WRONG TO TRY TO CASH IN on the unfortunate's property! 
    Similarly the 'Court - scrapped' unlawful bedroom tax for tenants was another example of Government greed and unfairness - newly brought in and causing hardship and unfairness on many. Now my point on mentioning that - is tenants are still paid a lot more than the average mortgagee that claims SMI - therefore if the tenant's bedroom tax was found unfair in Court, then you can see a mortgagee receiving £200 month (4 week) towards a £700 per month mortgage and having to find that other £500 every month out of benefits MUST BE ABSOLUTELY CRIMINAL. Note most sick or disabled or unemployed persons on benefit can NOT remortgage, nor lose their homes willingly, they can't claim rent if they sold THEIR property.
    Now a shallow view that is being used is tax payers won't like mortgagees receiving benefits towards mortgage or buying a property, but as you can see a mortgagee has already paid tax to raise deposit, paid stamp duty at thousands of pounds, paid tax whilst earning up to the point of unfortunate circumstances, has taxable benefits, pays tax with bills or VAT and would have to pay more tax in future. 
    Sick / disabled benefits are already being cut back and many wont afford to keep their homes, let alone move forward in life, owing the Government either the SMI LOAN or on settling a CHARGE placed on THEIR PROPERTY on point of sale. 
    Further this Government has bled dry many sick / disabled / unemployed persons and no matter how these vulnerable pleaded their case to the rest of the public - it was ONLY when some employed recipients of TAX CREDITS realised they were under attack, facing cuts, that some more people realised this Government is actually wrong in taking monies from the poor and vulnerable. NOW THE POINT IS - sick / disablement / unemployment could happen to any of you at any time - so it is wise to support the less fortunate, in all walks of life, with an open mind! ONLY THE RICH WILL NOW SCOFF HERE!

    I am therefore calling for the rest of the public to support this Petition. It was suggested the proposed SMI loan or charge added to people's homes might be started in 2018 but the consultations were happening since 2011, I believe.

    ASK YOURSELVES - IF YOU WERE STRUGGLING TO MAKE ENDS MEET - BUT WERE TRYING TO KEEP A ROOF OVER YOUR HEAD - WOULD YOU WANT THE GOVERNMENT PLACING A CHARGE ON YOUR HOME? For those that don't know what that means, it would mean you can't move or sell without paying that CHARGE back - a charge that never used to exist and should never be brought in!

    Tenants - would you like to pay all the sums you have received in Housing Benefit back? HB paid at a lot higher rate - ie full or NEAR full rent paid?

    Working people - would you condone your poorly or disabled family member having such a noose - as a Government loan based on interest payments with extra interest and admin fees on top - or a charge added to their deeds.

    Think open-mindedly - this could affect any of you at any time!

     

     

  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    Broken,

    Yes, I'm afraid this is definitely happening. The regulations came out very recently. There is protection for existing claimants. 

    There's no intention to apply this to rent. If you've got specific questions about how the new rules are going to work we may be able to answer them now (although the regulations are pretty complex!)

    Will
    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland
  • BrokenBroken Member Posts: 40 Courageous
    Yes, I'm afraid this is definitely happening. The regulations came out very recently. There is protection for existing claimants. 

    There's no intention to apply this to rent. If you've got specific questions about how the new rules are going to work we may be able to answer them now (although the regulations are pretty complex!)

    What protection for existing claimants?????? The government website states that this new ruling applies to both NEW and existing claimants.

    Read more at https://community.scope.org.uk/discussion/34608/sim-changes-due-april-2018#dWKIk8x8DBXJwqe4.99
  • MikeBroderickMikeBroderick Member Posts: 234 Courageous
    Hi @BenefitsTrainingCo, please see @Broken's follow-up question above. Thanks.

  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    Hi Broken

    The regulations for this have only just been published and we've now had a chance to look at them more closely. As Will said there are transitional rules for people who claimed before April 2018 but the protection is indeed very limited as you suggest. We are quite shocked by this as usually there is much more comprehensive protection when such significant changes are introduced.

    In summary the transitional protection for most people lasts until the first of the following: the day the DWP receives notification that the claimant refuses the offer of the loan... OR, if they agree to the loan and send the paperwork back, four weeks after the DWP receive the paperwork. OR if the claimant doesn't send the paperwork back, 6 weeks after the date of the offer of the loan.

    David
    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland
  • BrokenBroken Member Posts: 40 Courageous
    Please can you clarify "transitional rules for people who claimed before April 2018"? Is this that there will be no back payment demands?? Sorry, I do not understand :-( 
  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    Hi Broken

    Basically people who get mortgage payments at the moment can continue to get them but only until April 2018. From April 2018 existing claimants will get a letter from the DWP offering a loan. If the loan offer is refused then mortgage interest payments stop immediately. If the loan offer is accepted then the mortgage payments may continue for up to 4 weeks after the paperwork is received by DWP or up to 6 weeks if the paperwork is not sent back.

    I hope this helps
    David
    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland
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