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Support for Mortgage Interest benefit changes April 2018 - What you need to know

SBH Scotland has received many calls regarding letters from the DWP about Support for Mortgage Interest (SMI) benefit. The wording of the letter is causing much confusion and uncertainty so we’ve put together a brief overview.

What is Support for Mortgage Interest?

SMI is a tax relief based on the amount of interest that you pay in a tax year on a qualifying mortgage loan.

You can claim SMI on interest paid by you on a loan used to purchase, repair, develop or improve the home. This relief can be claimed up to 31 December 2020.

SBH Scotland Financial Support Worker offering advice

Who is Eligible?

You qualify for relief if you’re eligible for any income based benefits and, between the years 2004 and 2012 inclusive, you took out a loan to purchase, repair, develop or improve:

  • your home
  • the home of your former or separated spouse or civil partner
  • the home of a dependent relative for whom you are claiming a dependent relative tax credit.

A home includes a house, flat or mobile home which is fixed on a permanent site and which has water or other services supplied to it.

What’s happening with the benefit?

As of April 2018 SMI is changing and the mortgage relief will now be considered as a secured loan which will have to be paid back on the sale of the property, transitioning the property to someone else or the death of the person.

If you are already in receipt of this benefit you will be receiving a letter from the DWP explaining this, after which you’ll receive a phone call from SERCO asking if you’re still happy to continue with the benefit as a secured loan. If you are, further paperwork will then be sent out to you.

You should be aware that you are allowed to ask for a financial advisor to explain the documentation to you.

What should I do now?

If you’re a member of SBH Scotland and you’re worried or want to know how this change will affect you, please contact our Financial Support Service directly on 03455 211 300 or email support@sbhscotland.org.uk. Every individual will have a variety of questions based on their own personal circumstances and we’re happy to help you navigate your way through this change.

Non-members of SBH Scotland should contact DWP directly for further clarification on your own situation.

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