§ Mr. FearnTo ask the Secretary of State for Social Security what assessment she has made of the impact on those who have taken out mortgage indemnity insurance and subsequently become unemployed of the recent court judgment that these mortgage payments constitute income which is to be set against benefits; and if she will amend the regulations to ensure that home owners are not discouraged from insuring their mortgage payments. [25412]
§ Mr. Keith BradleyPayments from mortgage payment protection policies are treated differently from payments from other creditor insurance on which subject Departmental officials and representatives of the insurance industry have recently held a number of meetings. Mortgage payment protection insurance used to pay the normal liabilities associated with a mortgage, such as capital, endowments and PEPs is generally ignored in the calculation of benefit. If payment is made direct to the lender, the full amount is ignored. If paid direct to the borrower, the amount of income taken into account in Income Support and Jobseeker's Allowance is the excess after payments for housing costs and other related insurance liabilities are deducted. Where benefit includes an amount for mortgage interest (ISMI), the insurance income is taken into account up to the amount of ISMI payable. In Housing Benefit and Council Tax Benefits, payments for building insurance and mortgage payment protection premiums are taken into account.
All Social Security regulations are kept under review and the treatment of income from mortgage protection insurance is currently being considered as part of the Department of Environment Transport and Regions led Housing Review.