Rent V Mortgage Interest Supplements

WHU

Does anybody know if there is a reason why there is such a massive difference between Rent and Mortgage Interest Supplements?
In my case neither me or my wife are currently working, we have three children and receive a social welfare payment.
We received a letter recently stating our Mortgage Interest Supplement is being cut to just over €200 a month. Now I do know that this is linked to current interest rates, and the rest of the mortgage approx €450 a month, we have to make up out of our social payment.
If however I was renting a property I would receive a Rent supplement of approx €750 a month with none or very little out of our social payment.
Why is there such a big difference?
It feels as though we are being punished for once having a job and getting a mortgage out on a property.

edellc

WHU wrote: »

Does anybody know if there is a reason why there is such a massive difference between Rent and Mortgage Interest Supplements?
In my case neither me or my wife are currently working, we have three children and receive a social welfare payment.
We received a letter recently stating our Mortgage Interest Supplement is being cut to just over €200 a month. Now I do know that this is linked to current interest rates, and the rest of the mortgage approx €450 a month, we have to make up out of our social payment.
If however I was renting a property I would receive a Rent supplement of approx €750 a month with none or very little out of our social payment.
Why is there such a big difference?
It feels as though we are being punished for once having a job and getting a mortgage out on a property.

do you really need to ask this question????
if your renting and on rent allowance then you are on the bread line if you could get a mortgage then you werent
i dont understand why people who prospered in boom years now moan about the lack of help for them and people who the celtic tiger ran past are now the fall guys

tenchi-fan

If the government started paying peoples' mortgages there would be very little incentive for people to work. It would create a middle-class poverty trap in addition to the working class poverty trap where people find it impossible to work when benefits are higher than wages.

Also, where do you draw the line? I know someone who bought a 1 bed apartment in dublin and pays a mortgage of over €1100 a month, not because she's selfish - just because she turned 40 and wanted to buy a home close to her family. If she was made unemployed how could the state possibly pay her mortgage on her home which halved in value?

I think the government should oblige people to take out income protection products.

cee_jay

Rent Supplement is paid to people living in private rented accommodation who cannot provide for the cost of their accommodation from their own resources. In general, you will qualify for a rent supplement, if your only income is a social welfare or Health Services Executive (HSE) payment and you satisfy the other conditions - see 'Rules' below.

The amount of rent supplement will be calculated by the HSE's Community Welfare Officer and will generally ensure that your income after paying rent does not fall below a minimum level.
This level is the basic Supplementary Welfare Allowance rate for your circumstances minus €24. You must always pay at least €24 towards your rent. However, you may pay more depending on your means.
The rent paid to your landlord (that is, your contribution plus your Rent Supplement) must not be above the maximum rent level set for your county or area. The maximum rent level for your county is set by the Department of Social Protection. However, the Health Service Executive (HSE) may set lower rates within these limits. The HSE sets a maximum rent level for each area. If your actual rent is higher than the local maximum, you may be refused Rent Supplement entirely.



Mortgage Interest Supplement provides short term support to help you pay your mortgage interest repayments. Your interest is assessed as your gross monthly interest less mortgage interest relief and any mortgage allowance or mortgage subsidy payable towards the interest part of your mortgage by the local authority.

You will only get assistance with the interest portion of your mortgage repayments. You will not get help with the portion that pays off the actual loan and house insurance. You should contact your lender to discuss repaying the actual loan.

If you have a consolidated loan, only the interest portion of your loan that relates to the essential purchase, repair or maintenance of your home will be taken into account.

To get Mortgage Interest Supplement you must meet the following conditions:

When you began your mortgage, you could afford the repayments
Your house is not up for sale
The amount of your mortgage interest payable does not exceed an amount the Health Service Executive considers reasonable to meet your residential and other needs
Only the portion of your loan that relates to the essential purchase, repair or maintenance of your home will be taken into account
It is reasonable to award mortgage interest supplement having regard to any arrears on the loan
You are habitually resident in this State.

Calculating your Mortgage Interest Supplement can be difficult. The Community Welfare Officer in your local health centre will decide if you are eligible for Mortgage Interest Supplement and calculate the amount you will get.

The Community Welfare Officer (CWO) will add together all your income which is taken into account in the means test for Mortgage Interest Supplement. The CWO will then subtract any income not taken into account. Your remaining income and Household Contribution are added together to find your contribution to your mortgage interest.

The Mortgage Interest Supplement payable to you is the difference between your actual mortgage interest and your contribution to mortgage interest, as long as the difference between the two is a reasonable amount to meet your residential needs. Your CWO may use the maximum rent limits set out for Rent Supplement as a guide to decide what a reasonable amount is.

Generally the CWO will ensure that your income after paying the interest on your mortgage does not fall below a minimum level. This level is the Supplementary Welfare Allowance minus €24.


Basically they are different schemes so different amounts will be paid to each person, as everybody's circumstances are different. They are both means tested payments, and depend on the area in which you live also.