The Universal Credit Nightmare for Homeowners

The Universal Credit Nightmare has barely started rolling out when I spotted a shock to all homeowners hidden in the depths of the document. It seems that the hardworking taxpaying person  who has their own home could be in  for hell of a jolt, and

potentially risk losing their homes should they fall on hard times, such as lose a  job, become ill. So like a manic cat I sent off FOI to the DWP for clarification. it has took me a few conversations to clarify the response as usual that was as clear as mud.

When I received my reply I was right, many those  who make a new claim who already own their own homes will not be eligible to claim UC (Universal Credit) but will instead have to claim ESA, JSA , IS.

If you are already on ESA and migrate to Universal Credit you will still be eligible for UC but the SMI component  will be subject the ‘Zero Income’ rule, which effectively will include the removal of 16 hrs a week earnings disregard and any earnings

above the amounts below will be taken into account will be reduced the SMI help you will receive, so on top of paying the mortgage part of your mortgage while the state effectively pays the interest will come under the new rule and tapers below.

 

• There will be a “zero earnings rule”. An owner occupier will have no entitlement to the housing costs element in any period in which they or their partner receive any earned income. Earned income includes any earnings from part time work, and certain benefits that employers pay such as Statutory Sick Pay and Statutory Maternity Pay. Under the current system claimants can work for up to 16 hours a week before their earned income is taken into account in full and starts to affect their benefits. The basis of UC is that claimants will keep more of their earned income because of higher disregards and tapers. As a result, under UC, there is a 65 per cent universal disregard. This means that a claimant would lose only £0.65 of UC for each £1 of net income above the disregard leaving the claimant with more available income than under the current benefits regime. For example, the monthly earnings disregards for claimants who lose their SMI as a result of the zero earnings rule are £111 for a single claimant; £734 for a single claimant responsible for one or more children or young persons; and, £647 for single claimant who has limited capability for work.When an owner occupier claimant’s earned income stops, he or she will be required to serve a further waiting period before they receive further help with their housing costs.

 

Any new claimants who own their own homes after claiming UC will  get the benefit but not the SMI on there mortgage which leaves them with a  huge shortfall in some cases.This is really going to hurt many People already struggling to keep their heads above water  with another whammy, so the government can save a few quid, its like a bedroom tax for homeowners!

This nasty vindictive government who seems to care not about the ordinary citizen in this country except for themselves and their corporate pals. The ‘I’m Alright Jack ‘mentality offers no solace to the working man or those who have misfortune darken their front doors. They say to people to work hard save and buy their own homes under their second run of  the ‘Right to Buy Scheme’ and when they do they will be punished for doing the right thing. I remember in the 70’s under Thatcher  they did right to buy ,made a killing and never replaced the social housing stock they sold off along I might add with subsequent governments also turning a blind eye to replacing the social housing stock.

Now with Bedroom Tax biting those hit by it, we still have very little in way of building replacements and those who are still in social housing have chance to take second bite of the cherry they missed first time round. While this scheme is different from the present one the catastrophic consequences for some homeowners will be immense. This government will punish the poorest in society yet again. They have no shame  for the outcomes of their actions and will just see it yet again as collateral damage to the governments goal of more cuts and many more to come over a sustained period in the future.