The DWP have come under attack because many people who are set to lose a vital benefit in 10 weeks’ time have still not been told. Even claimants who have been told have not been given the full details of the way that support for mortgage interest (SMI) is being replaced with a loan.
SMI pays the interest on mortgages for some claimants on income-related benefits. At present around 124,000 claimants receive SMI.
In 2015, the government announced that as a cost cutting measure, from April 2018 SMI would be replaced by a loan which would have to be repaid by the claimant when their home is sold.
The new scheme is voluntary, claimants do not have to sign up for it. But, if they do not, the interest on their mortgage will not be paid and they will have to find other means to pay or risk losing their home.
However, the letters sent out by the DWP were criticised for not including vital information, such as the rate of interest that the SMI replacement will charge.
In addition, it has now emerged that with just 10 weeks to go not all affected claimants have been informed about the axing of SMI.
Moreover, so far just 6,850 claimants have signed up for the government’s new scheme out of the 124,000 claimants affected. This means that either the majority of claimants are planning to find the money elsewhere or thousands could face repossession in the near future.