MIKE Amesbury has raised concerns in Parliament about the impact of a benefit change he described as a ‘ticking timebomb’ for homeowners.
Support for Mortgage Interest is a benefit that helps people with the cost of their mortgage if they are not working or have fallen on hard times.
It had been given as a benefit, but in April is changing to a loan system that is secured against the property. The changes were introduced as part of George Osborne’s Welfare Reform and Work Bill from July 2015.
After being contacted by constituents who were alarmed at the changes, Labour MP for Weaver Vale Mr Amesbury was concerned that not enough had been done to alert those impacted of a change that – if not acted on swiftly – could lead to evictions.
Tabling a question in the Commons to Kit Malthouse, Parliamentary Under-Secretary of State at the Department for Work and Pensions, Mr Amesbury said: “What steps has his department taken to make people in receipt of the Support for Mortgage Interest scheme aware of forthcoming changes to that scheme; and what assessment has hes made of the long-term effect on the security of the recipients' homes as a result of people moving from a benefit to an interest-bearing loan?”
In a response, Mr Malthouse replied: “Claimants are given information about how the SMI loan will work, about alternatives to the loan and organisations that can offer further information.”
He added that SMI loans will be available to all claimants who currently qualify for SMI as a benefit and that there was ‘no reason’ to expect an increase in the number of homes that are repossessed, adding: “Recovery of SMI loans will not be pursued until the property is sold or transferred. If the amount of equity available after the sale of the property is less than the amount due to be recovered the balance will be written off.”
But speaking later, Mr Amesbury said: “I’ve been contacted by several constituents, ranging from pensioners who fear eviction, to a carer who had to leave their job to look after a parent who will now have to rely on the support of family to pay their mortgage as they don’t want to get into more debt.
“It’s extremely worrying how little information there is out there about this, even many benefits experts we’ve spoken to have not heard about these changes, and I do worry that if people aren’t prepared and don’t have something in place they could forfeit their homes.
“I would urge anyone concerned to contact Welfare Rights or Citizens Advice for help if they think they’re going to be affected.”