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Social Welfare with a Mortgage

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  • 15-07-2014 2:17am
    #1
    nuboniek
    Registered Users Posts: 3 ✭


    Hi folks, can anyone tell me if it is possible to rent out my house even though I am unemployed? My situation is this....I am a single dad and my son will be moving out in Sept for college. My house is a family home and I am in arrears. I want to rent my house to help pay more than I can afford myself. I will then move to a smaller place. Saying that, if I AM able to rent my house while I am on the dole can I also claim rent allowance for the smaller property I move to.

    I do not want to do this as I am happy where I am but I can't afford to keep going this way and despite my efforts at job searching is difficult. I intend to so this for a year or two to give myself some breathing space and hopefully get back to full time employment.

    Thanks
    Tagged:


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    #2
    Del2005
    Registered Users Posts: 18,871 ✭✭✭✭Del2005


    Can't see any problem renting when on the dole, but only the mortgage holder can give the real answer.

    I don't see how you can get RA when your earning more in rent from your own house. RA is for people who can't afford to rent you'll have an income from your rent, this may affect your dole. You will have to pay tax on the rental income.


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    #3
    DanDublin1982
    Registered Users Posts: 641 ✭✭✭DanDublin1982


    To get Rent Supplement you have to be identified by the local council as having a housing need. Given you have a property they couldn't identify you as such.

    Depending on what payment you are on (although i guess it will be job seekers once your son moves out) the rent you recieve won't decrease your payment however any equity (and you might need to seek a valuation if you go through with this) you have in your current property could.

    Getting a lodger in won't help either really. 80℅ of what you recieve from a lodger is assessed as income.


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    #4
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Unfortunately I have to concur with the above two posters.
    The best you can do in a case like this- is try to see if Social Welfare will countenance giving you Mortgage Interest Supplement- to stay in the family home.

    If you rent out the family home- the entirety of the rent is taxable income- you can offset some of it against the mortgage interest- however- there is tax due on the rest- its not 'profit'- after the bank are paid their pound of flesh- and Revenue theirs- you'd like be left with nothing- including no roof over your head- and as you own the house, you'd also not qualify for RS/RAS or any of the other schemes- as technically- you are not in need of a property (the fact that you have installed a tenant in your family home, notwithstanding).

    Its a mess- you're not going to solve it by renting out the family home- you're only going to make a different mess.

    See if you could apply for Mortgage Interest Supplement- and whatever you do- make sure you liaise with the lender- as you don't want an eviction order granted.........


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    #5
    murphaph
    Registered Users Posts: 19,018 ✭✭✭✭murphaph


    The obvious thing here would be to stay in the property and rent out a room or two. Also no tax liability so long as you don't receive (including contributions for bills) more than 10k a year.


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    #6
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭MouseTail


    Mortgage Interest Supplement was scrapped for new applicants in the last budget, so I'm afraid that's not a runner.

    The options available as I see, are to rent out a room, or to negotiate with the bank for a split mortgage or mortgage to rent scheme.
    Is there equity in the house?


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    #7
    The_Morrigan
    Moderators Posts: 9,368 ✭✭✭The_Morrigan


    murphaph wrote: »
    The obvious thing here would be to stay in the property and rent out a room or two. Also no tax liability so long as you don't receive (including contributions for bills) more than 10k a year.

    That doesn't work when you're on SW.
    I've just had a meeting with them as my 9 months Jobseekers is about to cease and the means tested JS Allowance shall be reduced as I have in a lodger to help pay off the mortgage.
    So I've outgoings of over 2K and income of 1200 (JSB & rent) and yet they are cutting the social payments as I'm receiving an 'income'. Their means testing is not actually related to your debt obligations.


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    #8
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    The_Morrigan wrote: »
    Their means testing is not actually related to your debt obligations.

    Unfortunately its true.
    We put well over half our net income into childcare.
    Were this outgoing taken into consideration- we'd qualify for FIS at the higher level. However- instead, there is no cognisance of childcare costs- they just look at your income, not your outgoings incurred producing that income.
    They are quite apologetic when you discuss it with them- but advise that they have no leeway.
    The last time I was talking to them- they suggested giving up work- as they'd then be in a position to help..........

    Something is seriously warped and twisted in our system.........

    There is an active disincentive to people making an effort to better themselves.


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    #9
    Eldarion
    Registered Users Posts: 484 ✭✭Eldarion


    The_Conductor wrote: »
    The last time I was talking to them- they suggested giving up work- as they'd then be in a position to help..........

    Something is seriously warped and twisted in our system.........

    There is an active disincentive to people making an effort to better themselves.

    I've heard this anecdote too many times for me to still consider it anecdotal.


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    #10
    The_Morrigan
    Moderators Posts: 9,368 ✭✭✭The_Morrigan


    The_Conductor wrote: »
    Unfortunately its true.
    We put well over half our net income into childcare.
    Were this outgoing taken into consideration- we'd qualify for FIS at the higher level. However- instead, there is no cognisance of childcare costs- they just look at your income, not your outgoings incurred producing that income.
    They are quite apologetic when you discuss it with them- but advise that they have no leeway.
    The last time I was talking to them- they suggested giving up work- as they'd then be in a position to help..........

    Something is seriously warped and twisted in our system.........

    There is an active disincentive to people making an effort to better themselves.

    I have serious issue with the fact that the Rent a Room Scheme is a Govt incentive for mortgage holders, it is not taxable subject to certain conditions being met, yet it is considered an income by SW.
    I have two options now - declare the rent and have my JSA cut or not declare the rent and be a 'tax cheat' but get my entitlements under SW.

    This is why so many people don't tell the whole truth, you are penalised for trying to not default on your obligations.


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