Could someone please help me with this query. A single person who is in receipt of Pension Credit and is getting the interest on their mortgage paid. They are no longer able to manage a house and have been offered a bungalow by the local council. He has put his home up for sale, but obviously these things take time. If he moves into his bungalow the council have agreed he will receive Housing Benefit + CT, but this leaves the problem of the mortgage interest payments on the other property until it is sold. No one at the DWP seems able to help, they say he cannot receive mortgage payments if he leaves his house, and Housing Benefit say they won’t pay unless he’s living at their property. Until he has sold the house he is living on minimal income and just cannot afford either the rent or the mortgage, so is stuck. Is there any way he can be in receipt of both until the property is sold?

I can only answer from the HB/CTB side (my knowledge of PC is negligible in relative terms - hopefully, someone else can help from that end).

In short, the Council is correct that HB/CTB cannot be paid until the clmt occupies the "new" property as their normal home. So, that leaves only the PC end regarding the rules for paying mortgage interest.

Regards

This is the problem; I can only find rules that deal with HB or Interest Payments separately in respect of PC. I can’t seem to find anything about a homeowner (on minimal income) who moves to council accommodation while in the process of selling their previous home. Obviously, until the property is sold they have no capital or means to pay the mortgage interest payments. It would seem that once they move from the home they are trying to sell, they would not be entitled to Interest payments, but if they don’t move they will be expected to pay full rent on their council property, it’s catch 22.

The DWP seem unable to help me, my last contact to the Derby call centre ended with some guy telling me that he’d asked his supervisor and they told him that there was no provision for extended Mortgage Interest Payments for someone not living in the home and also in receipt of HB on another. I was pleased that they at least knew where to look for such an answer and asked if they could tell me which Regs they’d used. I’m not making this up….I was then told that I wouldn’t be able to look at these Regs as they were only available to the DWP, I couldn’t believe it. I explained that they were available in my office and on the net, he told me “not these ones”. I said if it was in the Decision Maker’s Guidelines I could look this up as well, if that’s what he was talking about, he said it was from a manual that only the DWP have. I barked at this guy to go back and get the specifics and told him not to be so ridiculous. I know we all suspect they make it up as they go along, but really……. He came back and gave me this twaddle about some state pension regs, nothing to do with it. I suspect the ‘supervisor’ was never there, or if they were, they were having a bad day and just pulled something out of thin air.

If anyone knows if a person can get extended interest payments while on PC but not living in the home they are being paid on, then please help me. Don’t make me call the DWP again, they scare me.

Subject to your client's agreement, I'd be making a formal written complaint to the relevant DWP office (countersigned by your client). Mark it urgent (and explain it is needed so that your client can make an informed decision). Hopefully you got the name of the person you spoke to.

I would convey exactly what happened, sticking to the facts as expressed in your last post. I would also ask the questions you want answering (including to relevant regulations). Further, a copy to your client's MP wouldn't go amiss - probably with a covering letter stating that you will contact him/her if you do not get proper, full, answers to the letter sent to the DWP.

In the meantime, sorry I can't shed any light on the info you actually need.

Regards

I don't think there is any way around the PC mortgage interest problem. What about contacting his mortgage lender? They may agree to a payment 'holiday' until the property is sold. Just a thought.

Para’4 (6)(c) of schedule 2 of the PC regs allows a person to be treated as occupying the former dwelling as his/her home for up to 4 weeks if a person moves into another property and is liable to make payments on both homes and that liability is unavoidable.

Thus a person may be eligible for IS mortgage interest on the former home for up to 4 weeks.

At least I think s/he may!

I think DWP are clearly correct. SPC Regs SchII para 1(1)(a) makes it clear housing costs are only allowable on the "dwelling occupied as the home". If your client moves into the bungalow, he is clearly no longer occupying the house as his home. There are rules for treating people as occupying dwellings in para 4 of Sch II, but most of them are for temporary purposes and require the claimant to have the intention to return. Para 4(6)(c) appears to allow a claimant in your client's position to get payments after moving out of a dwelling, but only for four weeks, and it seems to require PC housing costs to be payable on both properties.

The people you have been speaking to may not know why he can't get help, and seem to have been talking nonsense about which regs/rules/guidance they were following, but they do seem to have got the basic point right.

Can he not negotiate with the lender, so that they agree to wait for their payments until the property is sold? Even if he just stopped paying the mortgage, he'd have a reasonable chance of selling the property before he'd run up enough arrears to be repossessed. If the property is on the market anyway, what advantage is there to the lender in not being cooperative?

Keith

Does it require mortgage interest to be paid on both properties? This is the question I racked my brains about before posting.

If you read the annotations to reg 3 (6) of the IS regs it talks of situations (albeit in different circumstances) where the liability on the current home is for HB and mortgage interest can still be payable on the former home.

IMO the question is whether a person can be treated as liable to make payments on the former home. If so then IS mortgage interest should be payable on the former home for the relevant period irrespective of the type of payments that fall to be made on the current home.

Regards
Paul

Paul,

You're probably right. Para4(6) of Sch II starts "where a person is liable to make payments in respect of two dwellings he shall be treated as occupying both dwellings..." I read that as meaning that both "payments" he was liable for were "housing costs" as covered by the schedule, but there is nothing that explicitly says that.

DMG (23441 and 78232 onwards) gives examples that include someone moving from ownership with a mortgage to renting, so DWP agree with your reading, which makes more sense than mine.

Keith

Thank you for all your replies, they have been really helpful. I don’t venture into the world of Pension Credit much, or at least I try to avoid it, most of our client base is under pension age. The problem I had is pretty much what Paul brings up, we are not asking for Interest payments on two homes, only one, the other being housing benefit. So I was a little fuzzy about how this would be applied when you cross the two benefits.

The problem with the DWP was not their answer as such, but their attitude regarding where I could find this information, just to check it myself and be happy. They went on as if I was asking about The Holy Grail.

That said, I have been reading about AIPs for PC on here and how capital received within this time is disregarded. My client’s AIP is until Nov 2009; does this mean he can get his PC until then, including HB/CT and the money from the sale of the house will be disregarded? If this is the case I’m sure he’ll be happy about moving, and a few months of mortgage interest will be nothing if the lender is OK about it all. I’ve gone off on a right tangent here, albeit a hopefully happy one.

yes his increase in capital will be ignorred until the end of his AIP. His AIP will only end early if one of the criteria in reg 12 State Pension Credit Regulations 2002 is met.

Para 4 of Sch II of the SPC Regs mirrors Reg 5 of the HB Regs.

It was held in CH/4546/2002 that the deeming provision of Reg 7 making certain payments ineligible for HB does not detract from eligible payments still being allowed under Reg 5(5)(d)

CH/4546/2002 was followed in CH/2641/2003.

There is no reason why the priniples set out in the HB decisions should not apply in the context of SPC

If he can no longer manage a house would it not be better for him to buy a bungalow rather than go into a council bungalow?