Labour calls for pause of ‘chaotic’ mortgage benefit changes amid fears for low income households
2 min read
Labour has called on the Government to ditch controversial plans to give low income families government loans to pay their mortgage interest.
The party say the changes will cause “real hardship” for some of the poorest homeowners in the country, including benefit claimants and pensioners.
At them moment, around 90,000 people claim support for mortgage interest (SMI), with around 40% being pensioners.
But from today, that benefit will be replaced with a loan, which claimants will have to pay back.
Labour say the changes have already sparked “chaos”, with 5,000 having not received a letter from ministers informing them of the change.
Furthermore Serco, the company carrying out the new system, had failed to contact another 31,000 to explain the change over the phone, they claim.
The party also criticise the Government’s forecast that just 5% of working age recipients and 8% of pensioners would not take up the loan – when as of last month 30% of claimants had already declined it.
Shadow Work and Pensions Secretary, Margaret Greenwood, who has today written for PoliticsHome to explain Labour's stance, said in a statement: “It is worrying that the government seems determined to push ahead with this change despite the risk of it causing real hardship for people on low incomes.
“Many of the people who claim SMI are elderly or disabled, and it is extremely concerning that pensioners might try to cope without the loan by cutting back on essentials like heating.
“Even at this late stage the government could and should think again and halt this change.”
A Department for Work and Pensions spokesman said the Government had already contacted everyone currently in receipt of SMI to explain the change and would offer further advice on the options available.
"People who sign up to the loan will continue to get help with their mortgage interest and it is only repayable if there is available equity when the property is sold.
"If people decide to decline the loan now but change their mind in future the loan can be backdated so, in effect, there would be no break in payments.”
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