We need your support to keep TheyWorkForYou running and make sure people across the UK can continue to hold their elected representatives to account.

Donate to our crowdfunder

Clause 16 - Loans for mortgage interest

Part of Welfare Reform and Work Bill – in a Public Bill Committee at 11:30 am on 15th October 2015.

Alert me about debates like this

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions 11:30 am, 15th October 2015

I have said all I am going to say on that. I would like to make progress as there is a lot to be said this morning. I would rather not get bogged down on issues on which I have made proper statement.

Claimants receiving income-related benefits may claim help towards the cost of their mortgage interest payments. Other than those receiving state pension credit, claimants have to serve a waiting period before the entitlement to help with mortgage interest begins. During the period of 1997 to 2009—the announcement was made in 2008 but the actual impact was in 2009—the waiting period for the majority of working age claimants was 39 weeks. In January 2009, the then Government introduced temporary arrangements reducing the period to 13 weeks, specifically to deal with the economic circumstances and to give additional protection to those who lost their jobs during the recession. At the same time, the maximum value of the mortgage for which support was available—the capital limit—was doubled to £200,000.

It was announced in the summer Budget that, from April 2016, the waiting period will return to the pre-recession length of 39 weeks, but it is important to remember and to note that the higher capital limit of £200,000 will be maintained. Given that the 39-week period was perfectly satisfactory from 1997 to 2009, and that the reduction was introduced purely on a temporary basis to deal with the then economic circumstances, it is right and proper that we should now revert to the former system.

We are all aware that the economy is on the rise and of the huge benefit that the employment market has had. We have record employment levels. I pay tribute to my right hon. Friend the Minister for Employment for her contribution to ensuring the record level of employment that we have at the moment.

The amendment would remove the current broad powers in the Bill that allow the waiting period for SMI to be set out in regulations, replacing them with a narrowly defined 13-week waiting period.