Jobless homeowners hit by DWP IT delays

Treasury support should stop people having to sell their homes

Victims of the credit crunch could be losing as much as £500 a month in mortgage support because of problems altering Department of Work and Pensions (DWP) payment systems.

DWP is trying to comply with a Treasury pledge to support homeowners who lose their jobs. The proposal involves paying interest on mortgages at 6.08 per cent instead of tracking the Bank of England base rate.

An announcement on the DWP web site said that because "it takes time to adapt our IT systems" some of those relying on state help to keep their homes "will experience a temporary drop below 6.08 per cent".

The higher rate of help with mortgage payments was announced by chancellor Alistair Darling in his autumn pre-budget report. It is due to continue for six months before reverting to base rate plus 1.58 per cent.

Tory shadow work and pensions secretary Theresa May, who calculated the possible loss, said: "It is completely outrageous that vulnerable households could be falling behind with their mortgages as a result of government incompetence."

She demanded DWP secretary James Purnell "explain immediately how this happened, how long he has known about this problem, how many people are affected, and when the situation will be put right".

The DWP web site announcement promised that "overall people will receive 6.08 per cent".