Buying a house while on welfare

rasaalex

Will my social welfare be affected if i buy the house ? If yes, how ? I am currently on Ras scheme. Me and my husband both unemployed. We have 7 children. Husband's brother (he doesn't live in Ireland) agreed to lend us 50 000 euro for the new house.

ezra_pound

rasaalex wrote: »

Will my social welfare be affected if i buy the house ? If yes, how ? I am currently on Ras scheme. Me and my husband both unemployed. We have 7 children. Husband's brother (he doesn't live in Ireland) agreed to lend us 50 000 euro for the new house.

No. But... Are you going to be able to get mortgage?

Ppr does not affect welfare. If you rent out house then it will affect it.

d-don

Emmmmm .... How much is the house and how much after the 50k is the mortgage because a cent over not a snow balls chance...

ezra_pound

d-don wrote: »

Emmmmm .... How much is the house and how much after the 50k is the mortgage because a cent over not a snow balls chance...

What do you mean?

pappyodaniel

That's just bad trolling and you should feel bad.

spank_inferno

rasaalex wrote: »

Will my social welfare be affected if i buy the house ? If yes, how ? I am currently on Ras scheme. Me and my husband both unemployed. We have 7 children. Husband's brother (he doesn't live in Ireland) agreed to lend us 50 000 euro for the new house.

If you meet with your community welfare officer he / she will personally co-sign a mortgage with you for a value up to €350,000.

Charlie19

pappyodaniel wrote: »

That's just bad trolling and you should feel bad.

Would make more sense for the relation to buy the house in the middle of nowhere and rent it to them free of charge.

d-don

spank_inferno wrote: »

If you meet with your community welfare officer he / she will personally co-sign a mortgage with you for a value up to €350,000.

I wasn't trolling on the above reply etc ... So you are saying .. Well let's assume the house is €200k and they have a deposit of €50 and both un employed with 7 kids . Now logical sense days their unemployment benefit is easily consumed by the family so how on gods earth can they afford a €150 k mortgage ... Sorry for being realistic unless there is another hole in the benefit law

phormium

I presumed OP meant the house was costing 50k or thereabouts. They would have no hope of getting a mortgage with both being unemployed so this must be the full amount of the purchase price.

Might make more sense for the brother to buy the house and let them live there, there would be a gift tax implication as it is above the threshold to be factored in as well if he gives them the money.

ted1

d-don wrote: »

I wasn't trolling on the above reply etc ... So you are saying .. Well let's assume the house is €200k and they have a deposit of €50 and both un employed with 7 kids . Now logical sense days their unemployment benefit is easily consumed by the family so how on gods earth can they afford a €150 k mortgage ... Sorry for being realistic unless there is another hole in the benefit law

Plenty of houses are available for less than 70k just search through Daft. The OP never stated where she was looking and what the house price is

No Pants

phormium wrote: »

Might make more sense for the brother to buy the house and let them live there, there would be a gift tax implication as it is above the threshold to be factored in as well if he gives them the money.

Brother buys house and rents it to them for €1 a week?

Moonbeam

Does the house cost 50k?

rasaalex

The house cost 50000. And brother is giving me a loan . I'll repay him when i find a job, he does it because he is generous person. No time limits for repayment.

Victor

With 7 children, will you need a fourth bedroom?

MagicMarker

What about tax implications here? I don't think your in law can just give you 50k tax free.

purpleflower48

hi can you explain a little more re community welfare officer signing off on a mortgage of that size please? i don't understand what is involved .

Victor

With 7 children, will you need a fourth bedroom?

UCDVet

MagicMarker wrote: »

What about tax implications here? I don't think your in law can just give you 50k tax free.

Could he not buy the house for 50k then sell it to the in-laws for .01k?

In this market, taking a 50k loss on a house is pretty good.

purpleflower48

spank_inferno wrote: »

If you meet with your community welfare officer he / she will personally co-sign a mortgage with you for a value up to €350,000.

Hi Spank Inferno....i dont understand that....can you explain a little further please, ie...are there qualifying conditions etc for such a mortgage and in the circumstances outlined by the person who originally posted their query here? i hope i am making myself understood. lol. reply when you can thanks.

Cuddlesworth

purpleflower48 wrote: »

Hi Spank Inferno....i dont understand that....can you explain a little further please, ie...are there qualifying conditions etc for such a mortgage and in the circumstances outlined by the person who originally posted their query here? i hope i am making myself understood. lol. reply when you can thanks.

He was being sarcastic.

ballyharpat

welcome to the Celtic Tiger part 2 ^^^^^

wexie

purpleflower48 wrote: »

Hi Spank Inferno....i dont understand that....can you explain a little further please, ie...are there qualifying conditions etc for such a mortgage and in the circumstances outlined by the person who originally posted their query here? i hope i am making myself understood. lol. reply when you can thanks.

You're going to need a small goat.

Then you'll need to wait for a full moon under a spring tide.

purpleflower48

oh! oops . lol. ok so. no worries.

No Pants

This thread must be from bizarro world. Two people, neither working and with 7 kids to support ask how they can get themselves a nice unsustainable debt.

Victor

OK guys, cop on. Cut the sarcasm and winding up.

Moderator

Kristopherus

Victor wrote: »

OK guys, cop on. Cut the sarcasm and winding up.

Moderator

There was I thinking the OP was the one that was winding up

Pro Hoc Vice

No Pants wrote: »

This thread must be from bizarro world. Two people, neither working and with 7 kids to support ask how they can get themselves a nice unsustainable debt.

Where is the unsustainable debt. Brother offers to lend 50k, repayment when OP can. The OP then gives up RAS thereby saving the state. There may be tax implications but as the 50k is loan only tax issue is zero interest and is this benifit taxable. Considering some people have 2.5% interest on home loans interest benifit is €1,250 a year so I don't see an issue.

Pro Hoc Vice

Kristopherus wrote: »

There was I thinking the OP was the one that was winding up

Where is the windup, OP asks a simple question, if a family member gives me a loan, to purchase in full a house for €50,000, will that effect any social welfare payments. The loan is to be repaid when the OP can afford it, there is no mention of interest so I assume interest free. I for one can't see a windup. €50,000 houses even 3 bedroom exist, example http://www.daft.ie/searchsale.daft?id=728915 €39,000.

rasaalex

Yes, he can give us 50000 for buying a family house, because he is rich and good person, seeking to help our family. And we don't need four bed house , it's too expensive . We could use sitting room as a bedroom, nothing wrong in that i think. Or is there a law that 9 person family can't live in 2 bedroom house ?

hmmm

I don't see what the problem is, it's lovely to see family helping each other rather than relying on handouts from taxpayers.

I don't see why social welfare should be affected, but I'm not an expert.

wexie

You're probably better off asking here.
I believe some of the benefits may be means tested and living mortgage and rent free may well affect those.

But the good folks in the state benefits forum will probably know a lot better.

djimi

rasaalex wrote: »

Yes, he can give us 50000 for buying a family house, because he is rich and good person, seeking to help our family. And we don't need four bed house , it's too expensive . We could use sitting room as a bedroom, nothing wrong in that i think. Or is there a law that 9 person family can't live in 2 bedroom house ?

Have you actually sat down and thought about the practicalities of having 9 people (seven of whom at some point will be teenagers) living in a 2 bedroom house? Even with using a sitting room (I presume you mean a second sitting room) a three bed is pushing it.

knipex

MagicMarker wrote: »

What about tax implications here? I don't think your in law can just give you 50k tax free.

Its a loan. AFIK as long as its paid back there is no tax implication. Just ask Bertie..

Victor

rasaalex wrote: »

Yes, he can give us 50000 for buying a family house, because he is rich and good person, seeking to help our family. And we don't need four bed house , it's too expensive . We could use sitting room as a bedroom, nothing wrong in that i think. Or is there a law that 9 person family can't live in 2 bedroom house ?

It would be a bit crowded. It is usual to have separate bedrooms for boys and girls and I assume that some of the children will be much older than others - teenagers and older hardly mix well with small children.

tricky D

This seems a bizarre notion imho.

Social welfare is supposed to be so that you can get by until the situation improves. Purchasing a house seems well beyond that remit. Both Welfare and the RAS people could turn around and argue the 50k loan, interest free or not, is equivalent to additional means so subject to means testing resulting in a reduction of benefits. This is what I reckon they would most likely do by a long stretch.

Also Revenue could give you hassle over the loan by viewing it as a Capital Transfer and looking for 33% of 47k. The burden of proof would most likely fall on you to prove otherwise. If your brother bought and transferred to you for a knock down amount, they would definitely hit you for CAT so that's a total non-runner.

Pro Hoc Vice

tricky D wrote: »

This seems a bizarre notion imho.

Social welfare is supposed to be so that you can get by until the situation improves. Purchasing a house seems well beyond that remit. Both Welfare and the RAS people could turn around and argue the 50k loan, interest free or not, is equivalent to additional means so subject to means testing resulting in a reduction of benefits. This is what I reckon they would most likely do by a long stretch.

Also Revenue could give you hassle over the loan by viewing it as a Capital Transfer and looking for 33% of 47k. The burden of proof would most likely fall on you to prove otherwise. If your brother bought and transferred to you for a knock down amount, they would definitely hit you for CAT so that's a total non-runner.

The brother can gift 30k tax free and 15k to the sister in law if he did not want to give a loan. A principle private residence is in most cases excluded from income.

http://www.revenue.ie/en/tax/cat/thresholds.html

"Property personally used

The house in which you live is not included in the assessment of your means unless you are getting an income from it. If you have rented a room in the house, that income is assessed but the capital value of your home is not."

http://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/means_test_for_social_welfare_payments/means_test_for_jobseekers_allowance.html

tricky D

infosys wrote: »

The brother can gift 30k tax free and 15k to the sister in law if he did not want to give a loan. A principle private residence is in most cases excluded from income.

http://www.revenue.ie/en/tax/cat/thresholds.html

"Property personally used

The house in which you live is not included in the assessment of your means unless you are getting an income from it. If you have rented a room in the house, that income is assessed but the capital value of your home is not."

http://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/means_test_for_social_welfare_payments/means_test_for_jobseekers_allowance.html

Where the hell did I get 3k from??? You are quite right.

Your second point though, I can't see that washing with SW/RAS as it refers to an existing residence not one you are planning to purchase. As the 50k is not yet used up for the purchase I can't see any reason why they can't interpret this as means.

Pro Hoc Vice

tricky D wrote: »

Where the hell did I get 3k from??? You are quite right.

Your second point though, I can't see that washing with SW/RAS as it refers to an existing residence not one you are planning to purchase. As the 50k is not yet used up for the purchase I can't see any reason why they can't interpret this as means.

Social Welfare would I assume rather saving the RAS payment. Also the brother can gift the house and not any cash.

tricky D

RAS is not administered by Welfare so there's nothing to stop Welfare as interpreting it as means. The gifting could possibly work but I reckon Welfare would scrutinise that ruthlessly. I just can't see the whole idea working out.

Pro Hoc Vice

tricky D wrote: »

RAS is not administered by Welfare so there's nothing to stop Welfare as interpreting it as means. The gifting could possibly work but I reckon Welfare would scrutinise that ruthlessly. I just can't see the whole idea working out.

If welfare decided that a person on welfare getting a gift of a house was means, there would be an issue, as a person who either had a house paid by themselves in the past or a person gifted a house before they applied for welfare, would be treated differently to a person getting a gift of a house on welfare. How about a person on social welfare who inherits a house. I really can't see an issue with the gift of a 50k house, might be an issue with a house worth a lot more.

I find it funny, that a persons family want to help out, and yet a lot of posters are saying that's bad etc., no wonder we have a social welfare mentality.

Also upto €20k in savings or cash is disregarded for SW, the next 10k will lead to €10 deduction per week. I believe it can be assessed per spouse, so 30k to husband €10 per week 20k to spouse 0 per week, this would of course depend on the payment type etc.

No Pants

infosys wrote: »

Where is the unsustainable debt. Brother offers to lend 50k, repayment when OP can.

That's grand then. Once we write it out like that in a couple of short sentences, then that's how it will work out in reality.

Does the brother really mean that the loan can be paid back in an unstructured way over 10 years or more?
Is there any chance that at some point over the next ten years the brother could decide that he could really do with that 50k to spend on something else?
No chance this could cause uncomfortable feelings within the family, a falling out, maybe even a court case?
Property and/or money can make families in Ireland behave in really ****ty ways sometimes. Plenty of court cases documenting it.

A 50k loan to nine people who can't support themselves is generally not a good idea. I'd advise caution. Certainly the parties involved should talk it out thoroughly.

Pro Hoc Vice

No Pants wrote: »

That's grand then. Once we write it out like that in a couple of short sentences, then that's how it will work out in reality.

Does the brother really mean that the loan can be paid back in an unstructured way over 10 years or more?
Is there any chance that at some point over the next ten years the brother could decide that he could really do with that 50k to spend on something else?
No chance this could cause uncomfortable feelings within the family, a falling out, maybe even a court case?
Property and/or money can make families in Ireland behave in really ****ty ways sometimes. Plenty of court cases documenting it.

A 50k loan to nine people who can't support themselves is generally not a good idea. I'd advise caution. Certainly the parties involved should talk it out thoroughly.

I doubt if anyone would give or take 50k without proper legal advice. The OP is simply asking what effect this would have on SW payments. There is always risk in borrowing and lending money within and outside a family. Lots of people in this country are now discovering that lending money or borrowing money was a bad idea. But lots of people have happily borrowed money to purchase property in the past.

ballyharpat

The op did not ask for advice re the implications with/to the family. But if they did, I would be saying the same as no pants. if it's a loan then there should be some legal documents to back it up and put a payment plan in motion. Maybe the brother just won the lotto or is just really well off, it happens.....