RV v SSWP (IS)
Income support (IS) - housing costs - amount outstanding under right to buy - applies only to interest on an eligible loan - not to capital payments
Summary
The claimant bought his home under the right to buy scheme. But at completion date he could not pay the last £10,000; it was agreed that would be left outstanding, and he would pay that at a rate of £100 a month 'without interest'. The claimant was refused the inclusion of housing costs in his IS on the outstanding £10,000 (which on the facts had the result of meaning he was not entitled to IS at all). The First-tier Tribunal rejected his appeal, holding that only interest payments could be covered under housing costs, and as he was not paying interest, he was not entitled to any housing costs.
Judge West dismissed the claimant's further appeal, holding that there was no error of law in the tribunal 's decision. He accepted the submission of the Secretary of State that although the payments were an eligible housing cost under Schedule 3 of the Income Support (General) Regulations 1987, SI No.1967, that provision had to be read alongside regulation 17(1). That provided that the housing costs to be included were those 'in respect of mortgage interest payments or such other housing costs as are prescribed' in Schedule 3. The judge held that impliedly excluded mortgage capital payments, as it was not a natural construction to include such payments as 'other housing costs' (paragraph 29). Even where an interest-bearing loan would have had a rate of interest below the standard rate of interest used in the calculation of housing costs, so that the effect would be to pay off the outstanding capital sum, that did not remove the fundamental distinction in the law between an interest-bearing loan and a non-interest-bearing one (paragraph 30).