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Government to cut rent supplement

  • 16-01-2012 12:52pm
    #1
    Banned (with Prison Access) Posts: 2,202 ✭✭✭


    http://www.rte.ie/news/2012/0116/rent.html
    The reductions in rental payments to landlords by social welfare tenants will amount to as much as €270 a month in some parts of the country.

    The Government aims to save €22m a year on its €500m annual rent bill, which is paid to landlords for social welfare tenants.

    Minister for Social Protection Joan Burton said letters are being issued advising welfare tenants of the new maximum levels for their rental supplements when their lease is due for renewal.

    €22m is far less a cut than many had feared although the €270 figure quoted would seem disproportionate.
    Perhaps it's being weighted higher in more expensive areas.


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Comments

  • Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


  • Registered Users Posts: 6,106 ✭✭✭antoobrien


    Rabidlamb wrote: »
    http://www.rte.ie/news/2012/0116/rent.html



    €22m is far less a cut than many had feared although the €270 figure quoted would seem disproportionate.
    Perhaps it's being weighted higher in more expensive areas.

    They'd do better looking at what they're renting for their own use. The HSE are renting dozens of buildings in Galway, while buildings and facilities that they already own are not being used. A house bought in 2000 for 400k, which was supposedly for use by the Regional Occupational Health Service, was still empty 9 years later.


  • Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    How much on average (per month) are people getting on rent allowance? I recall one poster mentioning €600. Can it really be that high?


  • Closed Accounts Posts: 4,784 ✭✭✭Dirk Gently


    About time landlords dole was cut. Just seen a property owner rep on the news make an extraordinary statement.... " It's unacceptable that the state can artificially lower the market rate". Wtf?

    It's acceptable that the state can keep filty bedsits artificially high though, pricing some working people out of renting because of the huge allowances.


  • Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Bullseye1 wrote: »
    How much on average (per month) are people getting on rent allowance? I recall one poster mentioning €600. Can it really be that high?

    New rates.
    http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/supplementary_welfare_schemes/rent_supplement.html

    Its gone down alright. Off the top of my head(for DCC area), it was 930 for a couple or one parent family, now 875.

    Couple with no kids has gone down from 800(i think) to 700.

    A couple with 3 children or one parent family with 3 kids its gone down from 1100 to 950.

    From reductions in previous years, this time the cities have been targeted in a meaningful way. Previous reductions were just a few euro.


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  • Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    gurramok wrote: »
    New rates.
    http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/supplementary_welfare_schemes/rent_supplement.html

    Its gone down alright. Off the top of my head(for DCC area), it was 930 for a couple or one parent family, now 875.

    Couple with no kids has gone down from 800(i think) to 700.

    A couple with 3 children or one parent family with 3 kids its gone down from 1100 to 950.

    From reductions in previous years, this time the cities have been targeted in a meaningful way. Previous reductions were just a few euro.

    Are these payments made indefinitely? How can the rest of the population be expected to subsidise this going forward?


  • Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Bullseye1 wrote: »
    Are these payments made indefinitely? How can the rest of the population be expected to subsidise this going forward?

    People(95,000) have been on RS for years, the bill rising to over 500m euro straight into the hands of private landlords. RS controls 50% of the private rental sector market hence huge distortion against working people who rent.

    Attached are the rates for 2010 & 2011.(swiped from Victor;))http://www.welfare.ie/EN/Press/PressReleases/2010/Pages/pr100610.aspx


  • Registered Users Posts: 8,295 ✭✭✭n97 mini


    A friend is a landlord. Not only is the Rent Supplement being reduced but the tenants have been told that unless the rent itself is below €850 that they won't pay the RS (currently €790) at all.


  • Banned (with Prison Access) Posts: 2,202 ✭✭✭Rabidlamb


    Jaysus, Kildare has been severely cut.
    Family with 2 kids was €1,110 in 2009, now €725 if I'm reading those right.


  • Registered Users Posts: 943 ✭✭✭bbsrs


    Why are people on rent supplement not moved to houses under nama control instead of giving out RS or is it not that easy?


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  • Registered Users Posts: 11,205 ✭✭✭✭hmmm


    bbsrs wrote: »
    Why are people on rent supplement not moved to houses under nama control instead of giving out RS or is it not that easy?
    Because in theory NAMA are supposed to be trying to sell those houses to recoup the money the taxpayer has put in to buying them in the first place. The houses are not "free", they are a valuable asset for the taxpayer.

    Now if NAMA ever got the finger out and started selling them, the above would make sense.


  • Registered Users Posts: 186 ✭✭Alwayson


    bbsrs wrote: »
    Why are people on rent supplement not moved to houses under nama control instead of giving out RS or is it not that easy?

    Would you like cattle trains to be used to move the people? I am on rent supplement because I've been unemployed for 3 years and ran out of money. I didn't apply until that happened. I have two kids living with me. When I was working my rent was 1300, I gradually negotiated it down to 930 with the landlord and now I'll have to ask him to bring it down to 875. And if he doesn't agree, I'll lose the entire supplement and we'll have to move out. I think the tenants are a pawn between the government and the landlords - its the tenants who are getting the letters from Social Protection about the cuts, so I assume we are expected to confront the landlords, not the SP.


  • Closed Accounts Posts: 10,012 ✭✭✭✭thebman


    Rabidlamb wrote: »
    Jaysus, Kildare has been severely cut.
    Family with 2 kids was €1,110 in 2009, now €725 if I'm reading those right.

    If you look on daft, that is about right TBH.


  • Registered Users Posts: 2,454 ✭✭✭cast_iron


    Alwayson wrote: »
    I think the tenants are a pawn between the government and the landlords - its the tenants who are getting the letters from Social Protection about the cuts, so I assume we are expected to confront the landlords, not the SP.
    Which makes perfect sense. It's the tenant that applied for the supplement, not the landlord. The landlord has the choice to do as he pleases, as he owns the place in a private capacity. The tenant is reliant on the state, so his contract (so to speak) is with them, and it's this agreement that is being altered.


  • Registered Users Posts: 2,452 ✭✭✭Icepick


    This is a good start.
    1 and 2 beds are still overpriced (in Dublin) because of RA.
    The state controls about 40% of the rental market and should do more with such enormous market power.


  • Closed Accounts Posts: 2,930 ✭✭✭COYW


    Icepick wrote: »
    This is a good start.
    1 and 2 beds are still overpriced (in Dublin) because of RA.
    The state controls about 40% of the rental market and should do more with such enormous market power.

    Hopefully, these cuts will cause rents to go down in the major cities. Rent allowance has been killing the rental market for far too long. It was the base rate for years. 1 beds are particularly overpriced across the board.
    Bullseye1 wrote: »
    Are these payments made indefinitely? How can the rest of the population be expected to subsidise this going forward?

    Of course they are. Once you are in receipt of RA, it doesn't reduce or stop, unless your situation changes of course.


  • Registered Users Posts: 186 ✭✭Alwayson


    cast_iron wrote: »
    Which makes perfect sense. It's the tenant that applied for the supplement, not the landlord. The landlord has the choice to do as he pleases, as he owns the place in a private capacity. The tenant is reliant on the state, so his contract (so to speak) is with them, and it's this agreement that is being altered.

    In yesterday's Irish Times Joan Burton said that "she was aware of the difficulties that landlords faced, but said she was also sure landlords could understand that the Government had to look for savings...We’d like to see the Department and the taxpayer getting good value for money from landlords, from providers of accommodation, in relation to those 97,000 people who are supported on rent allowance.” The Government clearly has landlords in its sights, but is in a position to use the tenants to do the negotiation on its behalf.


  • Closed Accounts Posts: 10,012 ✭✭✭✭thebman


    Alwayson wrote: »
    In yesterday's Irish Times Joan Burton said that "she was aware of the difficulties that landlords faced, but said she was also sure landlords could understand that the Government had to look for savings...We’d like to see the Department and the taxpayer getting good value for money from landlords, from providers of accommodation, in relation to those 97,000 people who are supported on rent allowance.” The Government clearly has landlords in its sights, but is in a position to use the tenants to do the negotiation on its behalf.

    Did they not introduce a household charge, isn't that going directly after landlords?

    What do you want them to do, negotiate rents on the rent allowance recipients behalf?


  • Registered Users Posts: 186 ✭✭Alwayson


    thebman wrote: »
    Did they not introduce a household charge, isn't that going directly after landlords?

    What do you want them to do, negotiate rents on the rent allowance recipients behalf?

    The Social Protection doesn't negotiate, they publish a limit which is non negotiable. The tenant and the landlord are left to negotiate something which is non negotiable. This doesn't add any value to the process. The SP has the landlords PPS and they know how much rent they are charging the tenant. If they want the landlord to lower this, I don't see why they can't write directly to him and tell him. If he agrees, the SP continues to pay the tenant a rent supplement, at the reduced rate. If the landlord doesn't agree, then the SP reduces the rent supplement to ZERO, leaving the tenant with no choice but to leave the property.

    What actually happens is that the Social Protection sent me rent review forms in May, then again in Dec and in both cases I sent these onto the landlord to confirm the rent. SP then reduced the rent limits in January, so when the Dec form comes back it will be rejected for being over the limit, I will be sent a new set of forms which I will fill in again, send to the landlord again in the hope he will agree to the reduced amount, and when I get those back for the second time I will send them to Social Protection. Lots more form filling, form checking and paper consumption than if the Social Protection contacted the landlord directly.


  • Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    It's funny how the government has landlords who provide accommodation to LA tenants but they are doing nothing about upward only rents on commercial properties.


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  • Registered Users Posts: 865 ✭✭✭A Disgrace


    There is confusion (amongst people who don't recieve Rent Supplement) as to what the entitlements actually are.

    Some people here see 'single person living alone in Dublin, maximum rent supplement- €530' and assume they get €530 per month towards their rent. They don't. They get €530 minus their contribution, which roughly works out as €410 per month towards the rent, the rest they pay themselves.

    Since the changes, the same person, now only gets €475 towards the rent, and has to contribute more per week. And if their monthly rent is greater than €475, then they are no longer entitled to any supplement.

    My feeling on this is that some landlords will renegotiate, but most won't. Remember a lot of them have mortgages that are greater than the rent they take in, so it's not in their interest. So, we'll have a glut of evictions, people leaving homes they've lived in for years, and overall rents staying the same

    A much fairer way (for unemployed tenants anyway) would have been to increase their contributions even more. I think most people on Rent Supplement would take that now, but instead it seems we have a government decision based on improving the property market, whilst making the cuts they needed in Social Protection the easy way.

    There's a minor ground-swell about this developing, and it'll only get worse once people start receiving the letters. It could get interesting and I wouldn't rule out some sort of review of the whole thing.


  • Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    A Disgrace wrote: »
    My feeling on this is that some landlords will renegotiate, but most won't. Remember a lot of them have mortgages that are greater than the rent they take in, so it's not in their interest. So, we'll have a glut of evictions, people leaving homes they've lived in for years, and overall rents staying the same

    If they do evict, who will be the new tenants? There are not queues of tenants waiting to fill the gap. Remember alot of those landlords who run old bedsits are more likely to be mortgage free or have tiny mortgages, each landlord's financial position is different.
    A Disgrace wrote: »
    instead it seems we have a government decision based on improving the property market, whilst making the cuts they needed in Social Protection the easy way.

    Its about improving the lives of workers who are paying extortionate rents to compete with welfare tenants and its about saving taxpayers money. Nothing to do with 'improving the property market'.


  • Registered Users Posts: 19,015 ✭✭✭✭murphaph


    gurramok wrote: »
    If they do evict, who will be the new tenants? There are not queues of tenants waiting to fill the gap. Remember alot of those landlords who run old bedsits are more likely to be mortgage free or have tiny mortgages, each landlord's financial position is different.
    That's an interesting point. I have RS tenants in D15, in a modern (1990s) property. I have a managable mortgage on the place as I bought well before the peak and never bought it as an investment (used to live in it), so have room to reduce the rent a bit (have done with previous reductions in RS as my tenants are good and worth keeping) but I reckon many of the better properties (built 2000->) could have substantial (investment: read higher interest rates) mortgages on them and these are the ones that will see evictions as landlords are forced to give up trying to cover mortgages from their own pay/dole.

    Could we see a situation where owners of grotty bedsits (who are more likely to be mortgage free) can keep their rent steady (it'll still be cheaper than a nice 3 bed house) due to demand from tenants evicted from suburban properties by bankrupt landlords?

    Interesting times ahead.


  • Registered Users Posts: 8,295 ✭✭✭n97 mini


    murphaph wrote: »
    Could we see a situation where owners of grotty bedsits (who are more likely to be mortgage free) can keep their rent steady (it'll still be cheaper than a nice 3 bed house) due to demand from tenants evicted from suburban properties by bankrupt landlords?

    Interesting times ahead.
    Indeed. One thing I know is happening is people are moving from the more expensive counties to some of the better value counties as their RS, even though lower, goes further. For example €450 will rent you something bigger/nicer in Leitrim than €750 will Fingal. I know three people who have done this in the last six months. It's a form of welfare tourism I suppose.


  • Registered Users Posts: 865 ✭✭✭A Disgrace


    gurramok wrote: »
    Its about improving the lives of workers who are paying extortionate rents to compete with welfare tenants and its about saving taxpayers money. Nothing to do with 'improving the property market'.

    To say that private rents are high because of rent allowance is wrong. Only about 15% of landlords accept rent allowance in the first place, so I find it very hard to believe that such a minority are suddenly responsible for the high rents in this country.

    I paid €1100 a month for a 1-bed appartment four years ago, roughly about double the maximum limit of Rent Supplment at the time. Rent Allowance has very little affect on overall rents. The only place where it might have some influence, is on bedsits and studios which are over-priced


  • Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    A Disgrace wrote: »
    To say that private rents are high because of rent allowance is wrong. Only about 15% of landlords accept rent allowance in the first place, so I find it very hard to believe that such a minority are suddenly responsible for the high rents in this country.

    I paid €1100 a month for a 1-bed appartment four years ago, roughly about double the maximum limit of Rent Supplment at the time. Rent Allowance has very little affect on overall rents. The only place where it might have some influence, is on bedsits and studios which are over-priced

    Wrong. Rent Supplement controls 50% of the private rental sector market. Some RS tenants are long term(like some of my neighbours) hence lack of adverts.

    You paid 1100 as a single person for a 1bed, the RS limit was about the same for a couple for a 1bed at the time. RS allocation is based on number of humans claiming, not on the number of beds needed.


  • Banned (with Prison Access) Posts: 31,117 ✭✭✭✭snubbleste


    A Disgrace wrote: »
    To say that private rents are high because of rent allowance is wrong. Only about 15% of landlords accept rent allowance in the first place, so I find it very hard to believe that such a minority are suddenly responsible for the high rents in this country.
    I paid €1100 a month for a 1-bed appartment four years ago, roughly about double the maximum limit of Rent Supplment at the time. Rent Allowance has very little affect on overall rents. The only place where it might have some influence, is on bedsits and studios which are over-priced

    There is no question that taxpayer-funded rent supplement distorts the private rental market, it creates an artifical floor for rents throughout the State.
    An exception would be where the supply of accomodation exceeds demand such as in rural Mayo, asking rents have fallen well below the local maximum ceilings for rent supplement.


  • Closed Accounts Posts: 4,038 ✭✭✭Nothingbetter2d


    the government should just move all those getting RA into Nama controlled housing and force the private sector landlords to drop the rent prices & upgrade those grotty little bedsits into proper flats with all the basic amenities in order to be able to find tenants


  • Registered Users Posts: 6,106 ✭✭✭antoobrien


    the government should just move all those getting RA into Nama controlled housing and force the private sector landlords to drop the rent prices & upgrade those grotty little bedsits into proper flats with all the basic amenities in order to be able to find tenants

    There is a legal minimum standard for rented accommodation, so the people in those grotty bedsits should be reporting the landlords to the PRTB.


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  • Registered Users Posts: 2,454 ✭✭✭cast_iron


    the government should just move all those getting RA into Nama controlled housing and force the private sector landlords to drop the rent prices
    Basically turn NAMA into a social housing body?
    I think someone above said it too, but that's not what NAMA was set up for, and would end up costing alot to the taxpayer more if that's the path it took. It's there to sell the assets it bought, and unless it does this, the tax payers face (even bigger) losses on the whole property collapse debacle.


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