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Neutral Citation Number:
Reported Number:	R(IS) 14 01
File Number:	CIS 2760 1998
Appellant:
Respondent:
Judge/Commissioner:	Judge M. Rowland
Date Of Decision:	28/06/2000
Date Added:	26/03/2002
Main Category:	Income support and state pension credit
Main Subcategory:	housing costs
Secondary Category:
Secondary Subcategory:
Notes:	Housing costs - "deferred interest" scheme - whether capitalised interest a qualifying loan The claimant and her husband took out a loan when purchasing their home in 1990. Under the agreement, only part of the interest due on the loan was to be paid during the first three years. The lender then opened a secondary account, capitalising the interest unpaid during those three years and charging interest on that amount at the same rate as on the main loan. When the claimant claimed income support in 1996, the adjudication officer decided that only interest on the primary loan was applicable as a housing cost, because only that loan qualified under paragraph 15(1) of Schedule 3 to the Income Support (General) Regulations 1987, as amended with effect from 2 October 1995. The claimant appealed, claiming interest on the secondary account as part of her housing costs. The tribunal dismissed the claimant's appeal, treating the secondary account as a loan but deciding that it did not qualify because it was not taken out to defray money applied for the purpose of "acquiring an interest in the dwelling occupied as the home". The claimant appealed to the Commissioner. Held, dismissing the appeal, that: 1. only the primary loan was used for the purpose of acquiring an interest in the dwelling; 2. the capitalised sum in the secondary account was to be treated as a loan; 3. but, while the secondary loan may have been taken out for the purpose of enabling the claimant to afford to buy the dwelling, it was not taken out either for the purpose of acquiring an interest in the dwelling or for the purpose of paying off the primary loan or interest on that loan.
Decision(s) to Download:	is14_01.doc