Exempt income: additional provisions relating to eligible housing costs
3.—(1) The additional provisions made by this paragraph shall have effect only for the purpose of calculating or estimating exempt income.
(2) Subject to sub-paragraph (6), where the home of an absent parent or, as the case may be, a parent with care, is subject to a mortgage or charge and that parent [is liable to make periodical payments] to reduce the capital secured by that mortgage or charge of an amount provided for in accordance with the terms thereof, [those amounts payable] shall be eligible to be taken into account as the housing costs of that parent.
[(2A) Where an absent parent or as the case may be a parent with care has entered into a loan for repairs or improvements of a kind referred to in paragraph 1(d) and that parent [is liable to make periodical payments] of an amount provided for in accordance with the terms of that loan to reduce the amount of that loan, [those amounts payable] shall be eligible to be taken into account as housing costs of that parent.]
(3) Subject to sub-paragraph (6), where the home of an absent parent or, as the case may be, a parent with care, is held under an agreement and [certain amounts payable] under that agreement are included as housing costs by virtue of paragraph 1 of this Schedule, [any other amounts payable] in accordance with that agreement by the parent in order either—
(a)to reduce his liability under that agreement; or
(b)to acquire the home to which it relates,
shall also be eligible to be taken into account as housing costs.
(4) Where a policy of insurance has been obtained and retained for the purpose of discharging a mortgage or charge on the home of the parent in question, the amount of the [premiums payable] under that policy shall be eligible to be taken into account as a housing cost [including for the avoidance of doubt such a policy of insurance whose purpose is to secure the payment of monies due under the mortgage or charge in the event of the unemployment, sickness or disability of the insured.]
[(4A) Where—
(a)an absent parent or parent with care has obtained a loan which constitutes an eligible housing cost falling within sub-paragraph (d) or (t) of paragraph 1; and
(b)a policy of insurance has been obtained and retained, the purpose of which is solely to secure the payment of monies due under that loan in the event of the unemployment, sickness or disability of the insured person,
the amount of the premiums payable under that policy shall be eligible to be taken into account as a housing cost.]
[(5) Where a policy of insurance has been obtained and retained for the purpose of discharging a mortgage or charge on the home of the parent in question and also for the purpose of accruing profits on the maturity of the policy, there shall be eligible to be taken into account as a housing cost—
(a)where the sum secured by the mortgage or charge does not exceed £60,000, the whole of the [premiums payable] under that policy; and
(b)where the sum secured by the mortgage or charge exceeds £60,000, the part of the [premiums payable] under that policy which are necessarily incurred for the purpose of discharging the mortgage or charge or, where that part cannot be ascertained, 0.0277 per centum of the amount secured by the mortgage or charge.]
[(5A) Where a plan within the meaning of regulation 4 of the Personal Equity Plans Regulations 1989 has been obtained and retained for the purpose of discharging a mortgage or charge on the home of the parent in question and also for the purpose of accruing profits upon the realisation of the plan, there shall be eligible to be taken into account as a housing cost—
(a)where the sum secured by the mortgage or charge does not exceed £60,000, the whole of the premiums payable in respect of the plan; and
(b)where the sum secured by the mortgage or charge exceeds £60,000, that part of the premiums payable in respect of the plan which is necessarily incurred for the purpose of discharging the mortgage or charge or, where that part cannot be ascertained, 0.0277 per centum of the amount secured by the mortgage or charge.
(5B) Where a personal pension plan [derived from a personal pension scheme] has been obtained and retained for the purpose of discharging a mortgage or charge on the home of the parent in question and also for the purpose of securing the payment of a pension to him, there shall be eligible to be taken into account as a housing cost 25 per centum of the contributions payable in respect of that personal pension plan.]
(6) For the purposes of sub-paragraphs (2) and (3), housing costs shall not include—
(a)[any payments in excess of those required] to be made under or in respect of a mortgage, charge or agreement to which either of those sub-paragraphs relate;
(b)[amounts payable] under any second or subsequent mortgage on the home to the extent that [they would not be eligible] to be taken into account as housing costs;
(c)premiums payable in respect of any policy of insurance against loss caused by the destruction of or damage to any building or land.