SMI is the help offered by the Gvernment to owner-occupiers in receipt of Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Universal Credit or Pension Credit.

The scheme allows homeowners who are on benefits to receive support of up to £200,000 to pay the interest on their mortgage or a loan they have taken for home improvements while they look for work. 

Key changes to SMI

The conditions of the scheme have changed to allow people to claim after being on Universal Credit for three months, down from the previous requirement of nine months. Claimants also do not need to be unemployed to access the support, another change from the previous rules. 

Additionally, people can re-claim for SMI if they leave Universal Credit but return within six months. 

SMI will automatically be offered to people on Universal Credit through the Department for Work and Pensions (DWP). If they reject the support at first, they can still claim later as long as they are still eligible. 

The loan must be repaid when the claimant sells their home and they can contact the DWP if the loan needs to be transferred. 

Mims Davies, minister for social mobility, youth and progression, said: “The fear of losing your home when you have fallen on difficult times is incredibly stressful and makes getting back on your feet all the more difficult. 

“This increased support is an important lifeline to help provide stability for those who are seeking to find work and move back towards long-term prosperity.” 

A common sense change 

The Building Societies Association (BSA) welcomed the news. It said it had been calling for a reduction in the time it took for people to become eligible for SMI as the previous rules meant someone would be more than six months in arrears before they could access support. 

Paul Broadhead, head of mortgage and housing policy at the BSA, said: “This is a common-sense change from the Government. Enabling access to the SMI loan much earlier could well be the difference between a family keeping a roof over their heads or them facing the prospect of their home being repossessed and having to find  alternative, government-supported, rental accommodation.  

“Also, as SMI is a loan not a benefit, the changes introduced today should not have a long-term financial detriment on government expenditure.” 

The BSA noted that support was also available from lenders and noted that while arrears were yet to rise significantly, and said lenders were “sensitive to the rising number of people facing a squeezed household budget”.