Benefit Advice Essentials community members discover potentially misleading and expensive (for claimants) web site page on GOV.Uk pages relating to changes to SMI
The Benefit Advice Essentials community has today highlighted a potentially misleading page on the GOV.UK pages relating to the new secured loan Support for Mortgage Interest (SMI) facility that comes into effect on 6th April 2018
Our previous articles (and those of other organisations) on the new controversial secured loan facility have been clear in explaining that the existing SMI benefit payment will come to an end in April and it will be replaced by a secured loan facility offered by Serco on behalf of the DWP.
Our previous article on the changes to SMI can be found here
Even the DWP's own guidance documents are clear that the old benefit style arrangement will cease and the only option available for people needing help with paying mortgages will be via the new secured loans.
However, it appears that the relevant pages of GOV.UK are not so clear about what happens on 6th April 2018 if you already have SMI in place;
"What type of SMI you can get
Whether you can get SMI paid as a benefit or as a loan depends on when you get, or are treated as getting, your qualifying benefit.
If you get Pension Credit
Your SMI will be paid as a benefit if you get Pension Credit before 6 April 2018.
It will be paid as a loan if you get Pension Credit on or after 6 April 2018.
If you get another qualifying benefit
Your SMI will be paid as a benefit if you get another qualifying benefit before 7 July 2017. You must have been getting the benefit for 39 consecutive weeks.
It will be paid as a loan if you get the qualifying benefit on or after 7 July 2017."
The full text of the relevant web page can be found here
The text shown above is a copy of part of the eligibility section of the SMI pages on GOV.UK. The text that is highlighted in red seems to indicate that if you were in receipt of a qualifying benefit 39 weeks before 7 July 2017, you will paid SMI as a benefit. Similarly, the GOV.UK page seems to say that if you are in receipt of pension Credit before 6th April, your SMI will be paid as a benefit.
The GOV.UK web site appears to be saying that if you meet the above eligibility criteria your SMI claim will be paid as a benefit and not a secured loan.
So if you already receive SMI and meet the above eligibility criteria, do you need to sign and return those SMI loan application papers?
Based on the content of the GOV.UK web site, it appears you don't have to because the web site appears to say your SMI claim will be paid as a benefit.
Don't get excited and tear those loan application papers up!
We have done some checking with advisory bodies that we trust and those organisations agree with our interpretation of the new rules and SMI being paid asa benefit will cease as of 5th April 2018.
From 6th April 2018, SMI will only be available as a secured loan.
The content of the GOV.UK web site page, did get a few brains working earlier today and after some web and phone based discussion, the consensus of opinion is that, this is a case of a very poorly written web page that the DWP probably won't be submitting for any "clear English" awards.
What the web site content is actually referring to is the situation for a new SMI claim made before 6th April 2018 and what happens to the claim after 6th April 2018. In other words if you meet the eligibility criteria and make a claim for SMI before 6th April, you will receive payment as a benefit and then after 6th April you will receive payment as part of a loan,
its a wonderfully clear piece of information from the DWP, don't you agree?
Even DWP staff couldn't explain what the web site was saying when our members phoned them earlier today and simply told our members to ring Serco, who might be able to explain what it means.
Anyway, for the avoidance of doubt and in the interests of making things nice and simple, here is a summary of what will happen to SMI in April;
Hopefully our explanation is a bit easier to understand than the GOV.UK web site pages. SMI as a benefit payment will cease for everybody from 5th April 2018.
If you are unsure of whether the new secured loan option is the right one for you, we recommend that you seek independent financial advice from an adviser who understands how SMI works.
The BASE adviser team will be happy to answer any questions you have on this article or any questions on other benefits that you need help and support with.
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