hi
seriously need some help here as i have not come across this before.
I have a client that took out a mortgage in 1990 for the amount of £25k. Client then later in 2003 has re-mortgaged for £53,000. She basically is arguing that she should recieve mortgage interest for this loan as it was mainly taken for repairs to make her home fit for habitation. Any idea's at all on this issue.

thanks

The ceiling for housing costs is £100,000 so on the face of it, why wouldn't this be covered as housing costs under IS? To be honest with you, posting such minimal amounts of information about what it is the problem, what it is you're trying to achieve and asking for ideas isn't terribly helpful, in my opinion. Pages 19-23 of the 32nd edition of Disability Rights Handbook cover housing costs and IS, have you had a look through them?

Loans taken out to pay for certain repairs and improvements are eligible for Income Support Mortgage Interest. The list of eligible repairs and improvements can be found in Paragraph 16(2) of Schedule 3 of Income Support Regulations and are listed below.

If your client carried out any of these she can have ISMI paid on the proportion of the loan which was used to fund them. JC+ will ask for evidence (eg builders' invoices) of the costs. Any money which she used to fund repair or improvements not specified in 16(2), or used for other purposes will not be eligible for ISMI.

Repairs and improvemens for the purposes of 16(2) are:

'any of the following measures undertaken with a view to maintaining the fitness of the dwelling for human habitation or, where the dwelling forms part of a building, any part of the building containing that dwelling–

(a) provision of a fixed bath, shower, wash basin, sink or lavatory, and necessary associated plumbing, including the provision of hot water not connected to a central heating system;

(b) repairs to existing heating systems;

(c) damp proof measures;

(d) provision of ventilation and natural lighting;

(e) provision of drainage facilities;

(f) provision of facilities for preparing and cooking food;

(g) provision of insulation of the dwelling occupied as the home;

(h) provision of electric lighting and sockets;

(i) provision of storage facilities for fuel or refuse;

(j) repairs of unsafe structural defects;

(k) adapting a dwelling for the special needs of a disabled person; or

(l) provision of separate sleeping accommodation for children of different sexes aged 10 or over who are part of the same family as the claimant.'

Yes but what the dwp are trying to say is that because she took out another loan in 2003 and the rules have changed in 1995 she would not be ebtitled to hosuing costs for that propertion of the loan. they are stating that the new loan in 2003, even thiugh it was for repairs is actually a ew housing costs and they cannot pay it. I am really confused because i have not done one of thes before but i have looked into the repairs and alteration section in the jsa regs.


thanks

i think i hate schedule 3 above all the legislation (excluding tax credits) but occasions arise where you just have to grapple with it. you have to look very carefully at every word! they might not be saying what you think they are saying - i'd be very worried if they are saying that, for everybody else... if you can get them to quote the precise para they are disallowing under it might help narrow it down.

but you will need to look at the definitions of 'existing housing costs' and 'new housing costs' in para 1 of the schedule - you will see immediately the rules are not a simplistic as the DWP are suggesting, and to acscertain whether the loan comes under para 16 (1). see also para 4 (4) which defines a relevant period - this refers to restrictions on loans taken out when a person is receiving IS etc.

going on what you say, it is possible that they are misreading para 4(2), but that's no more than a wild guess.

if you have the loan details, and follow the definitions through the schedule, you should be able to work out whether she qualifies for help, and since she originally took out the loan in 1990 there's a good chance she does, and that they are wrong...(and it is not the case that new housing costs are never met in any circumstances, as you imply above, but there are restrictions.)

if you establish that she qualifies for help with the loan, you can then move on to 16 (2) and have all the fun of working out how much... <wink>

My gut reaction to this is that it only counts as "existing housing costs" if the remortgage is for the same amount as or less than the pre 1995 mortgage, and doesn't cover anything more than the original mortgage covered. Otherwise it is "new housing costs" and I can't see why it couldn't at least be apportioned to cover any portion of the remortgage that would be allowable under the new housing cost remortgage rules for the balance of the purchase price of the property and for the allowable repairs and improvements already listed.

Paragraph 4 only comes into it if the mortgage, or any extension of it, was taken out at a time she was on benefit, and I get the impression you are not saying this for the 2003 remortgage. But it will be necessary to investigate and if necessary prove exactly what the funds from the remortgage were used for to see if they fit into the tight and conclusive list in paragraph 16. Assuming your cleint knows about the need to keep receipts for 6 years she should be able to do this.

hi

thanks guys fro all your suggestions. Shall look into it precisely as far as the wording is concrened. The hearing has not been listed yet but i shall let you know what happens.

Thanks again
salma