The BSA is supportive of proposals to streamline the benefits process and therefore support the principles for introducing a Universal Credit (UC). However, we are concerned with the impact that UC would have on the Support for Mortgage Interest (SMI) benefit. The proposals throw up a number of issues, particularly with SMI in its current form. We believe it is too simplistic to lump all employment and housing costs under the new process.

We acknowledge that SMI is not currently a benefit in its own right and that it is one component in the calculation of entitlement to income related benefits. However, SMI is paid separately and directly to lenders under the Mortgage Interest Direct scheme and this could potentially be lost under the UC proposals.

The proposals with UC currently have the potential to result in SMI not performing its main function (payment of the mortgage) and is instead used for other purposes, or it could become insufficient in terms of financial support.

The response also provides recommendations on reforming SMI more generally.

The full response can be accessed via the link below:

BSA response to the DWP consultation - 21st Century Welfare