The Savings Credit is not in itself paid for the mortgage: that’s part of the Guarantee Credit appropriate amount. What any increase in eligible housing costs does is to increase the GC appropriate amount and so the Savings Credit taper reduces. For example:
Before: regular GC elements = £102.10, housing costs = £20, AIF = £132.10, SC taper would be £4 and SC award would be £10.79.
After: regular GC elements = £102.10, housing costs = £25, AIF = £132.10, SC taper would be £2 and SC award would be £12.79.
It’s the same effect as qualifying for an additional amount without a change in income – say a non-dep moves out and the severe disability addition starts to apply.
Funnily enough, the standard interest rate went down a couple of weeks ago from 5.34% to 5.07%. That might strike you as odd in view of recent Bank of England actions, but it hadn’t changed for the best part of two years before that so the long-term trend was still downwards in IS and GC time scales. However, the decrease in the standard interest rate ought not to have led to an increase in Savings Credit. That’s a puzzler. maybe the claimant took out a new improvement loan?
Another possible explanation is that the cut in the standard interest rate caused the claimant to drop out of GC, then s/he would for the first time become “visible” to you as an SC/AIF case:
Before: GC AA = £102.10 + £1 housing costs, income = £102.50, claimant gets £0.60 GC and £14.79 SC, but you don’t know or care about the SC because it’s a GC case.
After: the interest rate reduction takes the eligible housing costs down to £0.30 and now the claimant only qualifies for £14.75 of SC. That turns him/her into a standard HB claimant with an AIF.
.
