Mother’s anger over mortgage ‘loan’ switch

(Photo Joe Giddens/PA Wire)
(Photo Joe Giddens/PA Wire)

A Derry mother, with four disabled children, has expressed disgust at the government’s plan to scrap mortgage interest assistance and replace it with a loan.

The woman claimed she has been inundated with calls from a private firm after the government employed a private company, Serco, to inform people of the Support for Mortgage Interest (SMI) welfare change and make them aware of their options.

The woman, who lives in the Shantallow area of Derry, but who has asked not to be named, said she was disgusted that this change was being swept in without those directly affected being consulted, and could result in families being forced to hand over large sums if they ever opt to sell their homes.

She also claimed she had received so many phonecalls that she has had to urge her children not to answer the phone.

She said: “There’s a misconception out there that the dole will pay your mortgage. That is not the case. It is only to do with your interest. I get help, which is £20.74p a week towards the mortgage interest. That’s all I get in terms of assistance.

“The letter is saying they are going to attach this mortgage [loan] payment to my mortgage so I will be indebted to them. So if they pay that, I will owe them more money. They said they will raise interest no more than twice a year. They have not said what the interest on this loan will be. I think people are sleeping in on this because it is just ridiculous.

“How am I supposed to feel safe in my home when they can take whatever they want off me? Where is the security there? This feels like you are being attacked. There was no warning of what was going to go down. They don’t take into account your circumstances; what you are dealing with. You are just a number to them, you are worthless,” she claimed, adding: “How can this be legal? I’ve just had enough. I’ve worked too hard for my deposit and my house. It wasn’t handed to me by any means.”

The woman’s cousin meanwhile said: “It’s a joke. This is a woman who is working night and day looking after her children. It would cost the State far more than £20.74p if she lost this house and the State had to put her and her children up.”

He added that his cousin’s sole focus was her children, who have differing, complex physical and learning disabilities and that she has poured everything into making her home a safe haven for her children. She has also previously had to fight to ensure access to respite care was reinstated, he said.

The North West Anti Austerity Collective has been working closely with the woman over the past 18 months and had staged protests regarding the loss of respite care, which was later reinstated. “NWAAC condemn this action by the government and would encourage anyone affected by this vicious austerity agenda to contact the page on FB,” a spokesperson said.

Garry Robinson, Customer Services Director at Serco said: “Serco staff are currently contacting claimants who are in receipt of SMI benefit and advising that, due to a change in legislation, this will stop from April 5 this year. Serco calls claimants no more than five times within a 20 working day period to offer guidance on what is happening and the options available. When our team do this they follow a DWP script and they have had comprehensive training in handling this sensitive subject.”

A spokesperson for the UK Department of Work and Pensions, which has introduced the changes, said: “SMI is being reformed so a safety net is still in place to protect homeowners from re-possession when they need it and to make it fair to the taxpayer who funds it. We are contacting claimants in enough time for them to reach a decision about the loan and signposting them to independent advice. Over time, someone’s house is likely to increase in value, so it’s reasonable that anyone who has received financial help towards their mortgage should be asked to pay that back if there is available equity when the property is sold.”

A spokesperson for the NI Department for Communities spokesperson, meanwhile, said: “SMI helps claimants on income based benefits by paying towards the interest on their mortgage and/or home improvement loan.

“As announced by the chancellor in the Summer Budget 2015, Support for Mortgage interest (SMI) is changing from a benefit to a loan on April 6, 2018 for all existing and new claimants who are entitled to help with housing costs.

“SMI loans will be paid by the Department in the same way as the SMI benefit is now. The loan may be secured against a claimant’s property which means it will have to be repaid with interest when the property is sold or ownership transfers. The interest rate charged will be the rate that it costs government to borrow the money which can change up to twice a year. The expected rate for April 2018 is 1.5%.”

The spokesperson said the Department has written to around 9,000 affected claimants in the North. “This is being followed up by a phone call from Serco who have been appointed to contact claimants on behalf of the Department. The purpose of the call is to provide more detailed information about the change and the information the claimant needs to know before deciding to take a loan.”

She said that Serco will end the call at any time if a claimant indicates they do not want to proceed and that only people who end up with equity in their property will have to pay it back. “If there isn’t enough equity, any amount that can’t be paid back will be completely written off.” She also advised customers to talk to their mortgage lender and seek independent advice from Independent Welfare Changes Helpline on 0808 802 0020, Housing Rights on 028 9024 5640, Citizens Advice Debt Advice on freephone 0800 028 1881, Money Advice Service on Freephone 0800 138 7777 or an independent provider.