DSS rules favour a house divided

Department of Social Security regulations governing mortgage payments could encourage couples to split up in order to get their mortgage paid.

Those no longer in a position to make repayments can usually get help with a home loan, but in one case the DSS may grant income support to repay interest on a loan advanced for a failed business - as long as a couple have separated.

If you become unemployed, you can apply for income support, which will help you with the mortgage payments. The DSS will help with interest payments on first or second mortgages taken out to buy your home.

It will also pay on second mortgages taken out to re- schedule an original home loan. You can get help, too, if the loan was advanced to finance essential repairs or improvements to the property.

But the DSS will not pay if the loan was made to clear debts. Neither will it pay if the loan secured on the home was for business borrowing.

However, if a spouse took out a business loan secured on a house and then ran away and refused to make any more payments, the DSS would consider making income support payments to the partner remaining in the property so that she or he will not lose the home.

'You have discovered the only time we pay interest on a loan when it is not for the purchase of a house or improvement to it,' a spokesman for the DSS said.

'If us paying is the only way the remaining spouse will keep a roof over her head, then we pay it. We do not want to punish a person for the former partner's business failures'.

However, the DSS seems happy to penalise couples who stay together. If they jointly suffer the financial consequences of a business failure, they do not receive income support.

Simon Johnson, general manager of the Money Advice Service of Birmingham Settlement, said: 'I suppose the logic behind it is that the partner is not responsible for taking out the borrowing in the first place.'