This Schedule contains provisions about claimants to whom regulation 27(3) applies.

Claimants who fall within sub-paragraph (1) are referred to in this Schedule as “owner-occupiers” (and references to “joint owner-occupiers” are to joint claimants to whom regulation 27(3) applies).

“Relevant payments” means one or more payments which are service charge payments.

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“Service charge payments” is to be understood in accordance with paragraphs 8 and 9 of F6Schedule 1 .

Sub-paragraph (1) applies irrespective of the nature of the work engaged in, its duration or the amount of the earned income.

Nothing in this paragraph prevents an amount calculated under Schedule 4 from being included in the award of any claimant who falls within regulation 27(4) to (6) (equity-sharing lease).

An owner-occupier's award of universal credit is not to include any amount of housing costs element calculated under this Schedule until the beginning of the assessment period that follows the assessment period in which the qualifying period ends.

In determining when the qualifying period in paragraph 5 ends in relation to the owner-occupier, any period that comprises only days on which the owner-occupier was receiving a benefit referred to in sub-paragraph (1) may be treated as if it were the whole or part of one or more assessment periods, as determined by the number of days on which any such benefit was received.

In determining when the qualifying period in paragraph 5 ends in relation to the further award (or each further award), the whole or part of any assessment period which would have counted in relation to the award that is terminated is to be carried forward and taken into account in relation to the further award (or each further award).

But where, immediately before the joint owner-occupier's award was terminated, an amount of housing costs element calculated under this Schedule was already included in the award; no qualifying period under paragraph 5 applies to the owner-occupier in relation to the commencement of the further award (or each further award).

Where an owner-occupier meets the payment condition, liability condition and occupation condition in respect of one or more relevant payments and the qualifying period has ended, each of the relevant payments is to be taken into account for the purposes of the calculation under this Part.

No account is to be taken of any amount of a relevant payment to the extent that the conditions referred to in sub-paragraph (1) are not met in respect of that amount.

Any particular payment for which an owner-occupier is liable is not to be brought into account more than once, whether in relation to the same or a different owner-occupier (but this does not prevent different payments of the same description being brought into account in respect of an assessment period).

This paragraph provides for the calculation of the amount to be included in the owner-occupier's housing costs element under this Schedule in respect of relevant payments which are loan interest payments.

Subject to sub-paragraphs (3) to (5), the amount in respect of the loan or loans to which the payments relate is to be calculated as follows.

Determine the amount of the capital for the time being owing in connection with each loan.

If there is more than one loan, add together the amounts determined in Step 1.

This paragraph provides for the calculation of the amount to be included in the owner-occupier's housing costs element under this Schedule in respect of relevant payments which are alternative finance payments.

The amount in respect of the alternative finance arrangements to which the payments relate is to be calculated as follows—

The standard rate is the average mortgage rate published by the Bank of England which, immediately before this Schedule comes into operation, has effect for the purposes of paragraph 12 of Schedule 3 to the Income Support (General) Regulations (Northern Ireland) 1987 M1 (which makes provision as to the standard rate to be used in determining amounts applicable to a claimant in respect of income support).

The standard rate is to be varied each time that sub-paragraph (3) applies.

This sub-paragraph applies when, on any reference day, the Bank of England publishes an average mortgage rate which differs by 0.5 percentage points or more from the standard rate that applies on that reference day (whether it applies by virtue of sub-paragraph (1) or by virtue of a previous application of this sub-paragraph).

The average mortgage rate published on that reference day then becomes the new standard rate in accordance with sub-paragraph (5).

In this paragraph—

• “average mortgage rate” means the effective interest rate (non-seasonally adjusted) of United Kingdom resident banks and building societies for loans to households secured on dwellings published by the Bank of England in respect of the most recent period specified for that rate at the time of publication M2;

• “reference day” means any day falling on or after the date on which this Schedule comes into operation.

This paragraph provides for the calculation of the amount to be included in the owner-occupier's housing costs element under this Schedule in respect of relevant payments which are service charge payments.

The amount in respect of the service charge payments is to be calculated as follows.

Determine the amount of each service charge payment.

Determine the period in respect of which each service charge payment is payable and, determine the amount of the payment in respect of a month (see sub-paragraphs (3) and (4)).