Man awarded €23,000 as HSE did not fully consider his circumstances in refusing a Mortgage Interest Supplement application

Background

A man’s application for Mortgage Interest Supplement was refused by the HSE on the grounds that the mortgage interest payable exceeded the amount the HSE considered reasonable to meet his residential and other needs. The HSE’s decision was based on a formula using a maximum rent limit. The maximum rent formula is used to ensure that maximum value for money for tenants and taxpayers is achieved at the same time as ensuring that people on rent supplement are not priced out of the market for private rented accommodation. The man was married with two small children.

Examination

I noted that there was no provision in legislation which requires the use of the maximum rent limits in determining what is reasonable for the purposes of the Mortgage Interest Supplement. This link was instead based on an administrative decision of the HSE local area which appeared to take little account for the high house prices of that time and fluctuating (upward) interest rates.

I wrote to the HSE and the Department of Social Protection (who now has responsibility for payment of Mortgage Interest Supplement) and asked for a review of the decision in this case. I suggested that claims for Mortgage Interest Supplement should not be refused solely on the basis that the amount of interest exceeds the appropriate limit but instead regard should be had to other factors such as family circumstances, the average cost of a house appropriate to the family circumstances at the time of purchase and whether the house purchase and mortgage represented a reasonable undertaking given the circumstances and prospects at the time.

Outcome

The Department agreed to review the decision. Following its review, the Department approved a Mortgage Interest Supplement from the date of application and issued arrears of payment in the amount of €23,241.50.