DWP help with housing costs such as mortgage support and free payments
Housing payments are incredibly important and keeping on top of them is vital, so here we explain all of the housing help available from the DWP and other official sources for those who claim benefits
The cost of housing, both if you own your home or rent it, has risen significantly over the last few years – but what help is there with these rising costs?
Housing payments are incredibly important and keeping on top of them is vital. If you are struggling with your housing costs there is official Government support available to claim. However, it is really important to remember that the Government’s financial support for housing is only available to those who claim Department for Work and Pensions (DWP) benefits.
If you do not claim benefits but are struggling with housing costs you should approach your local council and see if they run a welfare assistance or Household Support Fund scheme. Alongside this, charities such as Citizen’s Advice and Shelter can offer emergency advice and support if you need help.
Here we explain all of the housing help available from the DWP and other official sources for those who claim benefits.
Housing Benefit
Housing Benefit is money to help you with your housing costs if you are on a low income. Housing Benefit can be used to help pay for rent as well as some service charges. You cannot claim the benefit for help with mortgage payments. Housing Benefit is being replaced by Universal Credit which means new claims are not being accepted. However, you can make a new claim if:
- You, and your partner if you’ve got one, have reached state pension age
- You or your partner has been getting Pension Credit since before May 15 2019
- You live in temporary accommodation
- Your landlord’s a county council, charity or housing association and they give you care or support
- You get accommodation from a county council, charity or housing association because you need care or support
If you qualify, Housing Benefit can be paid whether or not you are working so your income is not taken into account. The amount you receive ranges depending on your housing situation. If you are a private tenant the amount is restricted by the Local Housing Allowance Rate.
If you are a social tenant, it could be restricted by the number of bedrooms you have under the “Bedroom Tax”. The amount is also subject to the benefit cap, and if your benefit payments exceed it your housing support could be reduced. Unlike other benefits, Housing Benefit is administered by your local council.
Universal Credit Housing Element
Universal Credit’s Housing Element can help those on low incomes with rent and some service charges and is paid through your monthly Universal Credit payment from the DWP. Again, this support is not available for mortgage payments. To get the support, you will need to prove to the DWP that you are paying rent but you can be renting privately or renting social housing.
It is paid with your Universal Credit. It is usually paid to you and it is your responsibility to pay your landlord, although in some circumstances your housing payment can be paid to your landlord directly by the DWP. Again, the amount you can get is based on the Local Housing Allowance for private rental properties in your area, so it means the amount you can claim is different wherever you are based. It is also based on the number of rooms you may need alongside who will be living in the property.
So, under this you will be entitled to one bedroom for each of the following:
- You (and your partner if you have one)
- Any other person over 16, as long as they aren’t living with you as your tenant
- Two children under 16 of the same gender
- Two children under 10
- Any other child under 16
So an example from the benefits charity Turn2Us, says: “Siobhan (34) lives with her partner Aaron (40) and their four children. Their children are a son aged 17, two girls aged 13 and 15, and a boy aged 4. They get one bedroom for Siobhan and Aaron, and one bedroom for the boy aged 17 because he is a person over 16. They also get one bedroom for the two girls to share (two children under 16 of the same gender), and one bedroom for the 4 year old boy (any other child under 16). They are entitled to the 4 bedroom rate of LHA.”
If you are single, don’t have any dependent children and are aged under 35, you will only be able to get the Shared Accommodation rate of Local Housing Allowance. You may also be able to get an additional bedroom entitlement if you, your partner or your child has a disability which means they can’t share a bedroom and they get a qualifying disability benefit.
Discretionary Housing Payment
Discretionary Housing Payment is a payment which can help towards housing costs if you are claiming Housing Benefit or the Housing Costs element of Universal Credit. These payments are distributed by your local council and not the DWP. Discretionary Housing Payments exist to provide a safety net for tenants facing financial hardship or even the risk of losing their homes due to failing to keep up with rent payments. You do not need to pay this money back.
You can claim the extra support for a range of reasons and according to the Turn2Us, these can include:
- Your Local Housing Allowance is lower than your rent in private rented property.
- Your Housing Benefit or Universal Credit is reduced because of non-dependant deductions/housing costs contributions.
- Your Housing Benefit or Universal Credit is reduced because you are working age and it has been decided that you have a spare bedroom in social rented property (bedroom tax).
- Your Housing Benefit or Universal Credit is reduced due to the Benefit Cap
You can also claim a payment for one-off costs like a rent deposit, rent in advance or removal costs to help you move into a new home. However, it cannot be used to cover an increase in rent due to arrears or to make up the difference if an overpayment is being recovered from your Housing Benefit. It also can’t help to cover certain sanctions or reductions in benefits.
Support for Mortgage Interest (SMI) Loan
This support comes in the form of a loan – this means it is not free money – and is given to help towards paying the interest payments on your mortgage or other loans for home purchase, repairs and home improvements. The support cannot be used to pay off the capital of your mortgage. This support is available to those claiming:
- Universal Credit
- Pension Credit
- Income Support
- Jobseeker’s Allowance (income-based), or
- Employment and Support Allowance (income-related).
The loan, administered by th DWP, is normally paid directly to your lender and it will help pay the interest on up to £200,000 of your mortgage or loan, or £100,000 if you get Pension Credit according to the Government website. These limits can be higher if the loan is used to pay for changes to your home due to a disability or illness.
As SMI is a loan, interest will be added to the total amount you owe until it’s repaid. But there are no other fees to pay. Currently, the interest for SMI loans is 3.16%. So, if your interest rate is higher than this, and/or your mortgage or loan is above the limit, then your SMI loan will only pay some of the interest you’re being charged. You may also get a lower SMI loan if other adults live with you without paying rent – this includes adult children still living at home.
There’s no time limit to repay your loan, and you don’t need to make any payments. You only have to repay the loan when you sell or transfer ownership of the property if there is enough equity in it. Equity means the money you have left from selling the property after you pay off the mortgage and any other loans secured to it. Once the DWP have worked out how much of your mortgage they can pay the interest on, they’ll pay it straight to your mortgage lender. You can check how much interest the DWP pays on GOV.UK here.
According to Citizens Advice, if you claim Universal Credit you can start getting SMI three months after you start claiming, while with JSA, ESA or Income Support you can claim from around nine months. If you claim Pension Credit, you can get your SMI payments straight away.
Source link
