UC owner-occupier housing costs - no time limit?

I get the feeling here that I’ve missed something (an especially frequent feeling when reading UC regs), but… has the Govt removed the two year limitation on payment of housing costs to owner occupiers?

Last June’s draft UC regs contained the provision to limit payment of housing costs to many owner occupiers to a maximum period of two years. This was set out at Part 5 of Schedule 5 to the main regs:

Schedule 5 - Support for owner-occupiers [Ho9S]
Part 1 - General
Part 2 - Exceptions to inclusion of housing costs element
Part 3 - No housing costs element for qualifying period
Part 4 - Calculation of amount of housing costs element for owner- occupiers
Part 5 - Maximum period for owner-occupiers subject to all work-related requirements

The most recent regs, however, seem to omit Part 5 of the schedule altogether (http://www.legislation.gov.uk/ukdsi/2013/9780111531938/schedule/5), and I can’t seem to find the provision elsewhere in the regulations.

So has the two year limitation been removed, or - as some other sites / guides seem to suggest - is it still in there somewhere and I’ve missed it? Wouldn’t be the first time if so, but I’ve spent an inordinate amount of time looking for it without success, so to be put out of my misery would be a relief.

yes, the 2 year limit for job seeker owner-occupiers has disappeared - see http://www.rightsnet.org.uk/forums/viewthread/4199/

Ack - must have missed that thread. Thanks.

I wouldn’t be so sanguine about this.

In favour of the disappearance of the two year limit is the announced intention to recover SMI paid to UC claimants.  There will, at some time, be a charge put on the property and, on sale or death, the SMI will be recovered.  There may be a two year exemption on this, as is suggested for Pension Credit, but there will also be interest and an administrative charge on top.  That may or may not be a profit generator for government, depending on house price inflation.

The disappearance of Para 15 of Sch. 5 of the June draft regs. which contained the period limit is a pretty strong point.

Against the disappearance is the consistent statement that the two year limit will continue.

The Autumn Statement 2012 has, in its costings papers,

“Support for Mortgage Interest

Measure description
Under current SMI rules, new working age claims are subject to a 13 week waiting period and a capital limit of £200,000. Funding for the current rules is due to expire in December 2012, and from January 2013 the system would revert to the old rules of a 39 week waiting period and a £100,000 capital limit. This measure extends the current rules until 31 March 2015.

The cost base
The cost base is estimated from historical SMI claims from the Quarterly Statistical Enquiry, historical and forecast new awards, and survival rate data provided by the Department for Work and Pensions Forecasting Division. OBR assumptions on the future average mortgage rate are also used.

Costing
The costing is calculated using the estimated number of people to receive additional/higher awards (and the value of these awards) compared to the pre-measure base.

Exchequer impact (£m)
2012-13   -10
2013-14   -95
2014-15   -90
2015-16   -20
2016-17     0
2017-18     0”

That shows no increase in spending which would be inherent in any extension of the period.

The House of Commons Library briefing on ‘The housing element of Universal Credit’ in February 2013 says:

“• there will be no help where the owner-occupier (not including shared-ownership) is doing any paid work – referred to as the ‘zero hours rule;’
• there will be a waiting period of three months before owner-occupiers can claim help with mortgage costs; and
• support will be time limited for claimants in the full work conditionality group for UC.”

The SSAC commented on the same time limit proposal from DWP in their responses about UC.

Given that there will be no new claims for UC with mortgage interest until October (unless an existing UC claimant buys a house or pairs up with an existing homeowner) there’s plenty of time for new regs. to be produced.

I suspect that we’ll see something bringing in recovery of SMI, time-limits, redifinition of relevant interest and, possibly, detail on the rules for older people and those with disabilities over the summer.

Remember what Lord Freud said during the passage of the bill in December 2011:

“We intend to provide support for owner-occupiers, as the call for evidence makes clear, whether this sits inside or outside of universal credit and pension credit. The call for evidence seeks views to help inform the appropriate way forward in determining how financial support towards mortgage interest costs should be changed in both the shorter term and longer term. We are looking at a different model to deal with the longer-term costs of supporting home owners. Essentially, we are looking for a way in which we can keep people in their homes when it is long term, but not at an exorbitant, open-ended cost to the taxpayer. That is the point of exploring these issues: we want to make sure that it delivers fairness to taxpayers.

For support for mortgage interest, we intend to have a rule that provides that help with mortgage costs will stop once a claimant starts work, as is broadly the case now. We believe that the position of claimants with mortgages is different from that of tenants. Owner-occupier claimants have been in work-clearly lenders would not advance money for house purchase unless the borrower could service that debt through income from work. If owner-occupiers are to be able to service their mortgage debt in the future, then they need to return to full-time work and our proposals, or our evidence call, reflect this reality.”

They are not intending to be more generous in the way they treat mortgage support.

Oh, I agree about intent; it was the removal of the provision from the detail of the regulations which I found unsettling in view of this. Of the four temperaments, I think sanguine would have been the last I’d apply to my feelings about the matter.