The Loans for Mortgage Interest and Social Fund Maternity Grant (Amendment) Regulations 2018

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Loans for Mortgage Interest Regulations 2017 (S.I. 2017/725) (“the LMI Regulations”) and the Social Fund Maternity and Funeral Expenses (General) Regulations 2005 (S.I. 2005/3061) (“the SFMFE Regulations”).

Part 1 provides for the citation, commencement and extent of these Regulations. The Regulations come into force on 6th April 2018, except for regulations 1 and 2(18) which come into force on 5th April 2018. The Regulations extend to England and Wales and Scotland.

Part 2 contains amendments to the LMI Regulations which make provision for the Secretary of State to make loan payments to benefit claimants in respect of a claimant’s liability to make owner-occupier payments on the claimant’s home.

Regulation 2(2) makes a number of amendments to regulation 2 (interpretation) of the LMI Regulations. The definition of “joint claimant” is amended in the case of universal credit as an individual must have actual entitlement to universal credit to be offered and receive loan payments. The definition of “single claimant” is amended so that it includes: an individual who is claiming a qualifying benefit (for themselves or as a member of a couple); or an individual who has made a claim for a qualifying benefit (for themselves or as a member of a couple), but is not entitled to the benefit due to the amount of their income (so they are “treated as entitled” to benefit).

A definition of being “treated as entitled” to benefit is inserted into regulation 2 of the LMI Regulations by regulation 2(2). Amendments are also made to the definitions of legacy benefit claimant and pension credit claimant, and other provisions in the LMI Regulations to provide for these cases.

Regulation 2(3) amends regulation 7 (time of each loan payment) of the LMI Regulations to provide that the loan payments will be made 4 weekly in arrears for legacy benefit claimants and SPC claimants in all cases.

Regulation 2(4) amends regulation 8 (period covered by loan payments) of the LMI Regulations to provide that the period in respect of which loan payments are made shall begin on a date requested by the claimant or, in respect of an SPC claimant, on the first day the claimant becomes entitled to state pension credit, where these dates are later than the other dates referred to in regulation 8.

Regulation 2(6) amends regulation 10 (calculation of each loan payment) of the LMI Regulations to refer to a deduction under regulation 14A (insurance payment deduction) which is inserted by regulation 2(8). Regulation 14A provides for a deduction from each loan payment where a claimant is receiving insurance payments relating to the repayment of owner-occupier payments.

Regulation 2(9) makes changes to regulation 15 (interest) of the LMI Regulations. It inserts new paragraph (1A) to enable the Secretary of State to stop charging interest if a claimant requests a completion statement in order to repay all of the outstanding loan amount, but only if the outstanding amount is paid within the period of 30 days from the day the completion statement is sent to the claimant. It also inserts new paragraph (1B) to provide that interest will continue to be charged in certain circumstances following the transfer of title in the relevant accommodation.

Regulation 2(10) amends regulation 16 (repayment) of the LMI Regulations to clarify the circumstances where repayment is required following the death of the claimant or their partner.

Regulation 2(11) substitutes a new regulation 18 (consequential amendments) of the LMI Regulations which provides that the amendments made by Part 2 of Schedule 5 to the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (S.I. 1999/991) and the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013 (S.I. 2013/381) (the “Decisions and Appeals Regulations”) do not apply in relation to any decision concerning help with owner-occupier payments as a benefit.

Regulation 2(12) substitutes regulations 19 (transitional provision: existing claimants) and 20 (transitional provision: lack of capacity) of the LMI Regulations with new regulations 19, 19A and 20.

New regulations 19 and 19A provide that help with owner-occupier payments as a benefit can continue for a temporary period after 5th April 2018 in respect of existing claimants (those entitled to an amount for owner-occupier payments as a benefit on 5th April 2018). New regulation 19 concerns cases where the Secretary of State has offered loan payments to claimants before 6th April 2018 whereas new regulation 19A concerns cases where the Secretary of State has not offered loan payments before 6th April 2018.

New regulation 20 provides that help with owner-occupier payments as a benefit can continue for a temporary period if, before 6th April 2018, the Secretary of State believes that existing claimants lack capacity, or suspects they may lack capacity, to make decisions about the loan payments.

Regulation 2(17) amends Schedule 4 of the LMI Regulations to provide for what happens where loan payments are made directly to a qualifying lender in excess of the claimant’s liability to make owner-occupier payments.

Regulation 2(18) inserts additional consequential amendments into Schedule 5 to the LMI Regulations to various regulations which currently make provision for help with owner-occupier payments as a benefit. This includes:

• amendments to the Social Security (Claims and Payment) Regulations 1988 (S.I. 1988/987) to omit references to mortgage interest, including in respect of deductions from benefit, which are no longer relevant;

• amendments to the SFMFE Regulations and the Social Fund Cold Weather Payments (General) Regulations 1988 (S.I. 1988/1724) to enable claimants receiving loan payments to access the passported benefits to which those regulations relate where they are treated as entitled to benefit, but do not have actual entitlement; and

• amendments to the Decisions and Appeals Regulations so that the rules apply to loan payments.

The remaining paragraphs of regulation 2 make minor and consequential amendments.

Part 3 concerns the SFMFE Regulations. Regulation 3 amends regulation 5A of the SFMFE Regulations to exclude from the definition of “existing member of the family” a child for whom the claimant is responsible under a formal or informal non-parental caring arrangement, provided that the child was over 12 months of age when the claimant became responsible for them. This ensures that such a caring arrangement will not prevent the carer from claiming a Sure Start Maternity Grant for their own child.

An impact assessment has not been produced for this instrument as it has no impact on business or on civil society organisations. This instrument has no impact on the public sector.