Explanatory note

These Regulations make changes in the way housing costs are calculated for income support purposes. The major changes (all to Schedule 3 to the Income Support (General) Regulations 1987 (No.1967)) are—

— a standard rate of interest applies to all loans which qualify as housing costs;

— housing costs are divided into existing housing costs and new housing costs; existing housing costs are costs incurred under an agreement entered into before 2nd October 1995; new housing costs are costs incurred under an agreement entered into after 1st October 1995 (paragraph 1 of Schedule 3);

— in the case of existing housing costs, these costs are met at 50 per cent. where the claimant has been entitled to income support for a continuous period of 8 weeks or more, but less than 26 weeks, and in full thereafter;

— in the case of new housing costs, these are met where the claimant has been entitled to income support for a continuous period of 39 weeks (regulation 2 and Schedule 1).

The Regulations also make consequential changes to provisions for direct payments of housing costs to lenders where the borrower is liable to make payments of mortgage interest to a lender (regulation 3 and Schedule 2).

There are also changes (regulation 4 and Schedule 3) to Schedule 9 to the Income Support (General) Regulations 1987 so as to provide that monies utilised under policies of insurance for the payment of housing costs are, in part, not to be taken into account in determining the income of the claimant.

The Report of the Social Security Advisory Committee dated 10th May 1995 on the proposals referred to them together with a statement showing the extent to which these Regulations give effect to the Recommendations of the Committee, and in so far as they do not give effect to them the reasons why not, are contained in Command Paper Cm.2905, published by Her Majesty’s Stationery Office.

These Regulations do not impose a charge on businesses.