Decision No: C8/95(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS
(NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (CONSEQUENTIAL PROVISIONS)
(NORTHERN IRELAND) ACT 1992

INCOME SUPPORT

Appeal to the Social Security Commissioner
on a question of law from the decision of the
Newtownards Social Security Appeal Tribunal
dated 20 October 1996

FINAL DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the claimant relating to his entitlement to housing benefit and I gave an interim decision some time ago.  The facts of the matter are set out at length in that decision of 6 February 1996.  In that decision I held as follows:-

		"I think it is a proper case in which I should exercise the power
		vested in me to give the decision which the Tribunal should have
		given, namely that the housing costs should be calculated on a
		£33,000 loan at the interest rate charged by the Alliance and 
		Leicester Building Society and that the necessary adjustment should
		be make to take into account the changes in the rate of that 
		Society's interest.  I direct that failing an agreement between
		the Agency and the claimant of the correct amount of this calculation
		that the matter should be relisted before me."

	As no agreement could be reached between the parties the matter was relisted.

2.	At the second hearing claimant was present but was not represented.  The Adjudication Officer was represented by Mrs Fearon, Solicitor of the Department of Health & Social Services.  There seems to be some misunderstanding as to what I decided in the interim decision.  What the interim decision means is that the Adjudication Officer was to ascertain whether or not there had been a rise in interest rates relating to the Building Society from which claimant had his first mortgage, namely the Alliance and Leicester Building Society, because the rate when his house was repossessed was 7.64% and that was the rate which the Adjudication Officer used in his decision.  What I intended to say, and thought I had said, was that the Adjudication Officer had to enquire as to whether or not there was a rise in that rate up to the date when the calculation of his housing benefits in respect of the new liability was made.

3.	Once that is ascertained then that is the rate at which claimant's housing benefit will be calculated, but that rate is not static but will always be increased or reduced by any fluctuation in interest rates relating to the S… M… and G… Corporation Mortgage.  Consequently all rises in interest rates on that new liability will be taken into consideration in assessing claimant's entitlement to housing benefit.   The reason for that is that the cost is not allowable in respect of the difference between the old and the new liability at that point.  However, he is always entitled to have taken into account all movements in interest rates relating to his new liability.

4.	Turning to MIRAS his previous mortgage was subject to MIRAS which represented 20% of the interest on the first £30,000.  However the new liability does not take into consideration MIRAS.  Consequently claimant is entitled to have the full gross amount of interest taken into account because, if his first mortgage had been free of MIRAS, then a different amount would have been allowable; but as this mortgage does not take into account any deductions in interest for MIRAS then the full amount must be used in calculating his benefit, and that he is entitled to a refund if there has been an underpayment in respect of same because it is only the cost by which the new liability exceeds the old liability that is not met.  MIRAS is not related to either the old or new liability  but is one method of calculating interest and relates to income tax liability and not to the interest liability as such.

(Signed):  C C G McNally

COMMISSIONER

6 February 1996