MORTGAGE ASSISTANCE
(NB Payments made under the Mortgage Assistance Scheme do not affect entitlement to receive a settling-in allowance, except that the total sum paid under the two schemes shall not exceed £14,000). The Mortgage Assistance Scheme is designed to assist new employees who are either first time buyers or who are required to move from a low to high cost housing area. The scheme is for the use in Chief and Deputy Chief Officer appointments, and or other key appointments where Chief Officers judge its application to be necessary because of recruitment difficulties. If, as a manager, you have a post to which your Chief Officer has approved the application of this scheme, you will need to be aware of the significant cost involved, over a three year period. You will also, of course, need to inform your departmental HR officer that the scheme is being used. However, because the scheme is only used occasionally, it has proved more convenient for the detailed administration of the Scheme to be undertaken centrally. County Human Resource Service will advise on the details of each individual case. Details of the Scheme Assistance is available for a period of three years, commencing on the date of acquisition of the new property, providing that such purchase is completed within 12 months of the employee taking up his/her appointment with the County Council. The amount of assistance available depends upon the ‘qualifying sum’. In the case of the employee who is both selling and purchasing property, the ‘qualifying sum’ is the least of the following amounts: The amount by which the actual sale price of the former property (excluding furniture, fittings etc) is lower than the actual purchase price of the new property; or The amount by which the actual sale price of the former property is lower than a comparable property in Warwickshire, having regard to age, type, size and location (this figure will be determined in individual cases by the Director of Property Services, whose decision will be final); or The amount by which the mortgage on the former property (i.e. the original sum advanced, together with any further advances) is lower than the mortgage on the new property purchased.
The minimum qualifying sum allowed is £5,000. The maximum qualifying sum allowed is £20,000
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(In calculating the qualifying sum the actual amount should be rounded down to the nearest £1,000). In the case of a first-time buyer the qualifying sum is the lesser of the following: Either £10,000 or half the actual mortgage of the new property. Having arrived at the qualifying sum the level of assistance can be calculated by reference to the gross monthly repayment sum determined by the Halifax plc for a repayment mortgage over 25 years. The level of assistance is based upon the prevailing Halifax plc rate of interest for such a mortgage, at the date of acquisition of the new property. However, once the level of assistance payable to an employee has been determined it will not be changed over the three year period, regardless of fluctuation in the prevailing interest rate. Having determined the level of assistance, 100% of this figure is paid for the first year, 75% for the second year and 50% for the third year. If the employee terminates their employment within two years of first receiving assistance they will be required to repay the County Council the total amount of assistance paid. If the employee terminates their employment during the final year of the three year period they will be required to repay the total amount of assistance paid during the six months immediately preceding the termination date. Joint Ownership Where the employee’s former property was jointly owned (other than with the employees spouse or partner), the ‘actual sale price of the former property’ shall be the employee’s share in the proceeds of sale. Similarly, the ‘mortgage on the former property’ shall be that share of the mortgage, which was the responsibility of the employee rather than the total sum of the mortgage on the property. In estimating the cost of a comparable property in Warwickshire the Director of Property Services will assume that the employee’s share in the new property is no greater than that which was held in the former property. Where the new property is to be jointly owned (other than with the employee’s spouse or partner) the amount to be contributed by the employee in the purchase of the property shall be regarded as the ‘actual purchase price of the new property’. Similarly the ‘mortgage on the new property’ shall be the employee’s share of the total mortgage on the property. In sale or purchase cases, where the joint owner/purchaser is the employee’s spouse or partner the total sale, purchase and mortgage amounts shall be used in arriving at the ‘qualifying sum’. However, whether the property is jointly owned or not, no assistance can be paid where the employee’s spouse or partner benefits from mortgage assistance or subsidy, or the operation of a mortgage equity scheme, either from the County Council or any other source. Other Conditions In order to qualify for assistance, the new employee must occupy the new property from completion or such later date agreed by their Chief Officer or Chief Executive. D1
The new property must be within Warwickshire. Any change in the employee’s position relating to either his or her property or mortgage must be notified to his/her Chief Officer (or to the Chief Executive) immediately. If the employee repays the capital sum of the new mortgage in full during the three year period mortgage assistance payments will cease. If the employee repays part of the mortgage the level of assistance will be reduced accordingly. Mortgage assistance will be paid together with the employee’s normal salary or wage payments. Income tax, and national insurance will be deducted at the normal rates. All the claims for assistance must be supported by satisfactory documentary evidence to show that the conditions of the scheme have been met. This may involve enquirers to solicitors, banks, building societies, estate agents etc. It may also be necessary to obtain sale particulars of the former property. The responsibility for producing such evidence including any costs which may arise, lies with the employee.
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