UC and Mortgage payments
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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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.
This would be paid straight to your lender.
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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?
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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).
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In such circumstances, do I need to submit my mortgage statements or proof of the amount I pay monthly in the assessment interview?
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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)?
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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.
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Thanks could not be clearer.
One more question, what documents typically required in the first eligibility assessment interview after I make my first claim?
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If your ID can't be verified online you will need to take it with you to your first appointment. See link.
If you have capital of more than £6,000 you'll likely need to take bank statements with you.
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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?
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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.
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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...
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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.
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Thanks for your thorough explanation…
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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?
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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.
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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?
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Your payment statement will be available 4-6 days before your payment date.
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