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Paragraph 7 Interest on loans to acquire an interest in the dwelling occupied as the home

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

(1)

Subject to sub-paragraphs (2) to (9), the following amounts shall be met under this paragraph—

(a)

if the claimant or, if he is a member of a couple, or if a member of a polygamous marriage, he or any partner of his is aged 60 or over, 100 per cent. of the eligible interest in his case;

(b)

if the claimant or, if he is a member of a couple, or if a member of a polygamous marriage, he and any partner of his are aged under 60—

(i)

where the claimant has been in receipt of income support in respect of a continuous period of not less than 16 weeks, 100 per cent. of the eligible interest in his case,

(ii)

in any other case, 50 per cent. of the eligible interest in that case.

(2)

Where in a case to which sub-paragraph (1)(b)(ii) applies—

(a)

either—

(i)

the claim for income support is refused, or

(ii)

an award of income support is terminated on appeal or review, solely because the claimant's income exceeds his applicable amount by virtue of the fact that only 50 per cent. of the eligible interest in his case is to be met under sub-paragraph (1)(b)(ii); and

(b)

the claimant or any partner of his makes a further claim no later than 20 weeks after—

(i)

where the original claim for income support was refused, the date of that claim, or

(ii)

where an award of income support was terminated on appeal or review, the date of the claim in respect of which that award was made,

the amount to be met under this paragraph commencing on a date not before the expiry of 16 weeks from the date specified in head (b)(i) or (ii), as the case may be, shall be 100 per cent. of the eligible interest in that case and until that date shall be the amount specified in sub-paragraph (1)(b)(ii).

(3)

Subject to sub-paragraphs (4) to (6), in this paragraph “eligible interest” means the amount of interest on a loan, whether or not secured by way of a mortgage taken out to defray money applied for the purpose of—

(a)

acquiring an interest in the dwelling occupied as the home; or

(b)

paying off another loan but only to the extent that interest on that other loan would have been eligible interest had the loan not been paid off.

(4)

Subject to sub-paragraphs (5) and (6) and paragraph 6, the amount of eligible interest in any case shall be the amount, calculated on a weekly basis, of—

(a)

where, or in so far as, section 26 of the Finance Act 1982f1 (deduction of tax from certain loan interest) applies to the payments of interest on the loan, the interest which is payable after deduction of a sum equal to income tax thereon at the basic rate for the year of assessment in which the payment of interest becomes due;

(b)

in any other case the interest which is payable on the loan without deduction of such a sum.

(5)

Where a loan is applied only in part for a purpose specified in sub-paragraph (3), only such proportion of the interest thereon as is equal to the proportion of the loan applied for that purpose shall qualify as eligible interest.

(6)

Where, under the terms of a loan taken out for a purpose specified in sub-paragraph (3), interest is payable on accumulated arrears of interest (whether or not those arrears have been consolidated with the outstanding capital), the amount of such interest shall be met under this paragraph as if it were eligible interest but only in so far as it represents interest on arrears incurred during any period—

(a)

when sub-paragraph (1)(b)(ii) applied in that case; or

(b)

when the claimant was not entitled to income support which fell within the period of 20 weeks specified in sub-paragraph (2)(b),

and, in either case, only to the extent that arrears do not exceed 50 per cent. of the eligible interest that otherwise would have been payable during the period in question.

(7)

Where a person who was formerly one of a couple or a polygamous marriage—

(a)

has taken out, either solely or jointly with his former partner, a loan secured on the dwelling occupied as the home for a purpose other than one specified in sub-paragraph (3); and

(b)

has left the dwelling occupied as the home and either cannot or will not pay the interest on the loan,

and, if that person's former partner has to pay the interest on the loan in order to continue to live in the dwelling occupied as the home, there shall be met in respect of the former partner under this paragraph the amount of interest on the loan calculated as if it were a loan taken out for a purpose specified in sub-paragraph (3).

(8)

Where an amount is met under this paragraph, if, notwithstanding that the amount of interest payable is reduced by virtue of—

(a)

a reduction in interest rates; or

(b)

a reduction in the amount of loan capital outstanding,

the amount of instalments which the borrower is liable to pay remains constant, the amount met shall not be adjusted to take account of the new amount of interest payable except where a determination is subsequently reviewed under section 104(1)(b) of the principal Actf2 (review of decisions).

(9)

For the purposes of sub-paragraph (1)—

(a)

a person shall be treated as being in receipt of income support during the following periods—

(i)

any period in respect of which it was subsequently held on appeal or review that he was so entitled, and

(ii)

any period of 8 weeks or less in respect of which he was not in receipt of income support and which fell immediately between periods in respect of which he was in receipt thereof or to which head (a)(i) applies;

(b)

a person shall be treated as not being in receipt of income support during any period other than a period to which head (a)(ii) applies in respect of which it is subsequently held on appeal or review that he was not so entitled.

(c)

where the claimant—

(i)

was a, member of a couple or a polygamous marriage,

(ii)

his partner was, in respect of a past period, in receipt of income support for himself and the claimant,

(iii)

the claimant is no longer a member of that couple or polygamous marriage, and

(iv)

the claimant made his claim for income support within 8 weeks of ceasing to be a member of that couple or polygamous marriage,

he shall be treated as having been in receipt of income support for the same period as his former partner had been or had been treated, for the purposes of sub-paragraph (1), as having been;

(d)

where the claimant's partner's applicable amount was determined in accordance with paragraph 1(1) (single claimants) or paragraph 1(2) (lone parent) of Schedule 2 (applicable amounts) in respect of a past period, provided that the claim was made within 8 weeks of the claimant and his partner becoming one of a couple or polygamous marriage, the claimant shall be treated as having been in receipt of income support for the same period as his partner had been or had been treated, for the purposes of sub-paragraph (1), as having been;

(e)

where the claimant is a member of a couple or a polygamous marriage and his partner was, in respect of a past period in receipt of income support for himself and the claimant, and the claimant has become in receipt of income support as a result of an election by the members of the couple or polygamous marriage, he shall be treated as having been in receipt of income support for the same period as his partner had been or had been treated, for the purposes of sub-paragraph (1), as having been.

Annotations

Footnotes

f1

1982 c. 39

f2

Section 104 is applied by Article 53(3) of the Social Security (Northern Ireland) Order 1986 (S.I. 1986/1888 (N.I. 18)) and amended by paragraph 9 of Schedule 5 to that Order