The Income Support (General) Regulations 1987

Interest on loans to acquire an interest in the dwelling occupied as the home E+W+S

7.—(1) Subject to [F1 the following sub-paragraphs of this paragraph], the following amounts shall be met under this paragraph—

(a) if the claimant or, if he is a member of a couple, or if a member of a polygamous marriage, he or any partner of his is aged 60 or over, 100 per cent of the eligible interest in his case;

(b) [F2 except where sub-paragraph (1)(a) applies,] if the claimant or, if he is a member of a couple, or if a member of a polygamous marriage, he and any partner of his are aged under 60—

(i) where the claimant has been in receipt of income support in respect of a continuous period of not less than 16 weeks, 100 per cent of the eligible interest in his case;

(ii) in any other case, 50 per cent of the eligible interest in that case.

(2) Where in a case to which sub-paragraph (1)(b)(ii) applies—

(a) either—

(i) the claim for income support is refused; or

(ii) an award of income support is terminated on appeal or review, solely because the claimant's income exceeds his applicable amount by virtue of the fact that only 50 per cent of the eligible interest in his case is to be met under sub-paragraph (1)(b)(ii); and

(b) the claimant or any partner of his makes a further claim no later than 20 weeks after—

(i) where the original claim for income support was refused, the date of that claim; or

(ii) where an award of income support was terminated on appeal or review, the date of the claim in respect of which that award was made,

the amount to be met under this paragraph commencing on a date not before the expiry of 16 weeks from the date specified in (i) or (ii) above, as the case may be, shall be 100 per cent of the eligible interest in that case and until that date shall be the amount specified in sub-paragraph (1)(b)(ii).

(3) Subject to sub-paragraphs [F3 (3A) to (6)], in this paragraph “eligible interest” means the amount of interest on a loan, whether or not secured by way of a mortgage or, in Scotland, under a heritable security, taken out to defray money applied for the purpose of—

(a) acquiring an interest in the dwelling occupied as the home; or

(b) paying off another loan but only to the extent that interest on that other loan would have been eligible interest had the loan not been paid off.

[F4 (3A) For the purpose of this paragraph any reference to a loan includes a reference to payments specified in paragraph 1(aa).]

[F5 (4) Subject to sub-paragraph (3A), the following provisions of this paragraph, and paragraph 6, the weekly amount of eligible interest shall be the amount calculated by the formula–

where–

A

=

the gross annual interest calculated by the formula C × D;

B

=

the difference between 100% and the basic rate (expressed as a percentage) of income tax within the meaning of section 832(1) of the Income and Corporation Taxes Act 1988for the year of assessment in which the payment of interest becomes due;

C

=

the amount of the loan which from time to time is outstanding and in respect of which eligible interest is payable; and

D

=

the rate of interest chargeable on that loan or any part thereof expressed as a percentage.

(4A) Where section 369 of the Income and Corporation Taxes Act 1988 (mortgage interest payable under deduction of tax) does not apply to the interest on a loan or to part of a loan, sub-paragraph (4) shall apply in respect of that loan or part as if it contained no reference to factor B.

(4B) Where the eligible interest is charged at more than one rate, the amount of that interest shall be calculated by making a separate calculation under sub-paragraph (4) in respect of each of those rates of interest and aggregating the results.

(4C) Where evidence supplied by the lender shows that the eligible interest charged is different from that calculated under sub-paragraph (4), the weekly amount of eligible interest shall be calculated by reference to the interest charged.]

(5) Where a loan is applied only in part for the purpose specified in [F6 sub-paragraphs (3) and (3A)], only such proportion of the interest thereon as is equal to the proportion of the loan applied for that purpose shall qualify as eligible interest.

(6) Where, under the terms of a loan taken out for a purpose specified in [F7 sub-paragraphs (3) and (3A)], interest is payable on accumulated arrears of interest (whether or not those arrears have been consolidated with the outstanding capital), the amount of such interest shall be met under this paragraph as if it were eligible interest but only in so far as it represents interest on arrears incurred during any period—

(a) when sub-paragraph (1)(b)(ii) applied in that case; or

(b) when the claimant was not entitled to income support which fell within the period of 20 weeks specified in sub-paragraph (2)(b), [F8 or

(c) where, under the terms or conditions on which a loan has been made, for an initial period of at least 2 years the whole or part of the interest on that loan is not, or has not been, payable;

and, where either head (a) or (b) applies only to the extent that the arrears do not exceed 50 per cent of the eligible interest that otherwise would have been payable during the period in question and where head (c) applies only to the extent that interest is deferred and accrues further interest under the terms or conditions on which the loan is made.]

[F9 (6A) For the purposes of sub-paragraph (6), in determining whether interest is, or is not, payable regard shall not be had to any obligation to pay interest which, under the terms or conditions on which a loan has been granted, is deferred for an initial period of at least 2 years.]

(7) Where a person who was formerly one of a couple or a polygamous marriage—

(a) has taken out, either solely or jointly with his former partner, a loan secured on the dwelling occupied as the home for a purpose other than one specified in [F10 sub-paragraphs (3) and (3A)]; and

(b) has left the dwelling occupied as the home and either cannot or will not pay the interest on the loan,

and, if that person's former partner has to pay the interest on the loan in order to continue to live in the dwelling occupied as the home, there shall be met in respect of the former partner under this paragraph the amount of interest on the loan calculated as if it were a loan taken out for a purpose specified in [F10 sub-paragraphs (3) and (3A)].

(8) Where an amount is met under this paragraph, if, notwithstanding that the amount of interest payable is reduced by virtue of—

(a) a reduction in interest rates; or

(b) a reduction in the amount of loan capital outstanding,

the amount of instalments which the borrower is liable to pay remains constant, the amount met shall not be adjusted to take account of the new amount of interest payable except where a determination is subsequently reviewed under section 104(1)(b) of the Social Security Act F11 (review of decisions).

(9) [F12 Subject to sub-paragraphs (10) and (11),] for the purpose of sub-paragraph (1)—

(a) a person shall be treated as being in receipt of income support during the following periods—

(i) any period in respect of which it was subsequently held, on appeal or review, that he was so entitled; and

(ii) any period of eight weeks or less in respect of which he was not in receipt of income support and which fell immediately between periods in respect of which he was in receipt thereof or to which (i) above applies;

(b) a person shall be treated as not being in receipt of income support during any period other than a period to which (a)(ii) above applies in respect of which it is subsequently held on appeal or review that he was not so entitled;

(c) where the claimant—

(i) was a member of a couple or a polygamous marriage; and

(ii) his partner was, in respect of a past period, in receipt of income support for himself and the claimant; and

(iii) the claimant is no longer a member of that couple or polygamous marriage; and

(iv) the claimant made his claim for income support within eight weeks of ceasing to be a member of that couple or polygamous marriage,

he shall be treated as having been in receipt of income support for the same period as his former partner had been or had been treated, for the purposes of sub-paragraph (1), as having been;

(d) where the claimant's partner's applicable amount was determined in accordance with paragraph 1(1) (single claimants) or paragraph 1(2) (lone parent) of Schedule 2 (applicable amounts) in respect of a past period, provided that the claim was made within eight weeks of the claimant and his partner becoming one of a couple or polygamous marriage, the claimant shall be treated as having been in receipt of income support for the same period as his partner had been or had been treated, for the purposes of sub-paragraph (1), as having been;

(e) where the claimant is a member of a couple or a polygamous marriage and his partner was, in respect of a past period in receipt of income support for himself and the claimant, and the claimant has become in receipt as a result of an election by the members of the couple or polygamous marriage, he shall be treated as having been in receipt of income support for the same period as his partner had been or had been treated, for the purposes of sub-paragraph (1), as having been.

[F13 (f) where—

(i) the claimant was a member of a family of a person (not being a former partner) entitled to income support and at least one other member of that family was a child or young person; and

(ii) the claimant becomes a member of another family which includes that child or young person; and

(iii) the claimant made his claim for income support within 8 weeks of the date on which the person entitled to income support mentioned in (i) above ceased to be so entitled,

the claimant shall be treated as being in receipt of income support for the same period as that person had been or had been treated, for the purposes of sub-paragraph (1), as having been.]

[F14 (10) Where–

(a) a claimant has ceased to be in receipt of income support because he or his partner becomes engaged in remunerative work; and

(b) immediately before ceasing to be so in receipt an amount under sub-paragraph (1)(b)(i) was applicable to him,

sub-paragraph (9)(a)(ii) shall apply to him as if for the words “any period of eight weeks or less” there were substituted the words “any period not exceeding the permitted period determined in accordance with regulation 3A (permitted period)”.]

[F14 (11) For the purposes of sub-paragraph (1)(b)(i), where–

(a) a claimant has ceased to be entitled to income support because he or his partner is participating in arrangements for training made under section 2 of the Employment and Training Act 1973 or attending a course at an employment rehabilitation centre established under that section; and

(b) immediately before so ceasing an amount under that sub-paragraph was applicable to him,

he shall be treated as if he had been in receipt of income support for the period during which he or his partner was participating in such arrangements or attending such a course.]

Textual Amendments

F1 Words in Sch. 3 para. 7(1) substituted (9.10.1989) by The Income Support (General) Amendment No. 3 Regulations 1989 (S.I. 1989/1678), regs. 1(1)(a), 7(a)(i)

F2 Words in Sch. 3 para. 7(1)(b) inserted (11.4.1988) by The Income Support (General) Amendment Regulations 1988 (S.I. 1988/663), regs. 1(1), 30(b)

F3 Words in Sch. 3 para. 7(3) substituted (12.12.1988) by The Income Support (General) Amendment No. 5 Regulations 1988 (S.I. 1988/2022), regs. 1(1)(a), 18(b)

F4 Sch. 3 para. 7(3A) inserted (12.12.1988) by The Income Support (General) Amendment No. 5 Regulations 1988 (S.I. 1988/2022), regs. 1(1)(a), 18(c)

F5 Sch. 3 para. 7(4)-(4C) substituted for Sch. 3 para. 7(4) (1.10.1990) by The Income Support (General) Amendment No. 3 Regulations 1990 (S.I. 1990/1776), regs. 1(1)(a), 9(a)(i) (with reg. 1(2))

F6 Words in Sch. 3 para. 7(5) substituted (12.12.1988) by The Income Support (General) Amendment No. 5 Regulations 1988 (S.I. 1988/2022), regs. 1(1)(a), 18(e)

F7 Words in Sch. 3 para. 7(6) substituted (12.12.1988) by The Income Support (General) Amendment No. 5 Regulations 1988 (S.I. 1988/2022), regs. 1(1)(a), 18(e)

F8 Words in Sch. 3 para. 7(6) substituted (1.10.1990) by The Income Support (General) Amendment No. 3 Regulations 1990 (S.I. 1990/1776), regs. 1(1)(a), 9(a)(ii) (with reg. 1(2))

F9 Sch. 3 para. 7(6A) added (1.10.1990) by The Income Support (General) Amendment No. 3 Regulations 1990 (S.I. 1990/1776), regs. 1(1)(a), 9(a)(iii) (with reg. 1(2))

F10 Words in Sch. 3 para. 7(7) substituted (12.12.1988) by The Income Support (General) Amendment No. 5 Regulations 1988 (S.I. 1988/2022), regs. 1(1)(a), 18(e)

F11 Section 104 is applied by section 52(3) of the Social Security Act 1986 (c. 50); sub-section (1) was substituted by section 52 of, and paragraph 10 of Schedule 5 to, the Social Security Act 1986.

F12 Words in Sch. 3 para. 7(9) inserted (9.10.1989) by The Income Support (General) Amendment No. 3 Regulations 1989 (S.I. 1989/1678), regs. 1(1)(a), 7(a)(ii)

F13 Sch. 3 para. 7(9)(f) added (12.9.1988) by The Income Support (General) Amendment No. 4 Regulations 1988 (S.I. 1988/1445), regs. 1(1)(b), 20(b)

F14 Sch. 3 para. 7(10)(11) inserted (9.10.1989) by The Income Support (General) Amendment No. 3 Regulations 1989 (S.I. 1989/1678), regs. 1(1)(a), 7(a)(iii)

Modifications etc. (not altering text)

C1 Sch. 3 para. 7(1)(a) sum confirmed (coming into force in accordance with art. 1(2)(f) of the amending S.I.) by The Social Security Benefits Up-rating Order 1993 (S.I. 1993/349), art. 16(13), Sch. 8

C2 Sch. 3 para. 7(1)(b)(i) sum confirmed (coming into force in accordance with art. 1(2)(f) of the amending S.I.) by The Social Security Benefits Up-rating Order 1993 (S.I. 1993/349), art. 16(13), Sch. 8

C3 Sch. 3 para. 7(1)(b)(ii) sum confirmed (coming into force in accordance with art. 1(2)(f) of the amending S.I.) by The Social Security Benefits Up-rating Order 1993 (S.I. 1993/349), art. 16(13), Sch. 8

C4 Sch. 3 para. 7(2) sum confirmed (coming into force in accordance with art. 1(2)(f) of the amending S.I.) by The Social Security Benefits Up-rating Order 1993 (S.I. 1993/349), art. 16(13), Sch. 8

C5 Sch. 3 para. 7(2)(a) sum confirmed (coming into force in accordance with art. 1(2)(f) of the amending S.I.) by The Social Security Benefits Up-rating Order 1993 (S.I. 1993/349), art. 16(13), Sch. 8

C6 Sch. 3 para. 7(4) sum confirmed (coming into force in accordance with art. 1(2)(f) of the amending S.I.) by The Social Security Benefits Up-rating Order 1993 (S.I. 1993/349), art. 16(13), Sch. 8

C7 Sch. 3 para. 7(6) sum confirmed (coming into force in accordance with art. 1(2)(f) of the amending S.I.) by The Social Security Benefits Up-rating Order 1993 (S.I. 1993/349), art. 16(13), Sch. 8

Commencement Information

I1 Sch. 3 para. 7 in force at 11.4.1988, see reg. 1