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Rental Allowance coming down in December
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06-08-2011 5:56pm#1I think it was Joan Burton who flagged last week the very real possibility of the Rental Allowance coming down 20-30% in December's budget.
Just wondering what are people's thoughts about this. If for example they come down 20% it surely follows that the rest of the rental market (non RA properties) will also drop by a similar amount? How long would the market be expected to take to price in the reduction, a couple of weeks or more like months?
If it happens then tenants would be crazy to think of signing a 12 month lease from here on in till December. I'm thinking of moving myself but am holding off till the new year to see what happens, anybody else doing the same?0
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Rates were last reviewed in June 2010. They are way overdue for review. I think the government is seeking to transfer this from the HSE to the local councils.
There is no question that rent supplement keeps rents artificially high. If it were removed tomorrow swathes of middle-class BTLs would be decimated, it ain't called landlords dole for nothing.0 -
snubbleste wrote: »Rates were last reviewed in June 2010. They are way overdue for review. I think the government is seeking to transfer this from the HSE to the local councils.
There is no question that rent supplement keeps rents artificially high. If it were removed tomorrow swathes of middle-class BTLs would be decimated, it ain't called landlords dole for nothing.
And what about tenants who will suffer IF this happens? REALLY!0 -
And what about tenants who will suffer IF this happens? REALLY!
A person has to pay for his own rent?! Now this is madness!!!!
90% of people I know that have these benefits are taking social warfare for a ride anyway.
Good, but like allways too late, but I guess it's better late then newer.0 -
And what about tenants who will suffer IF this happens? REALLY!
Tenant's won't suffer. If rent allowance is reduced, landlords will have to reduce rent seeing as the majority of their clientele are social welfare recipients and they would have little hope of finding other tenant's if people can't afford the rent.
I hope rent allowance is slashed in the budget, it has remained atrociously high for WAY too long.0 -
I think it was Joan Burton who flagged last week the very real possibility of the Rental Allowance coming down 20-30% in December's budget.
I could be wrong but I don't remember Burton mentioning any figures, and certainly not as high as 20%-30%. I'd love if they would of course, but I can't really see it. It just seems like the kind of bold move that never happens in this country.0 -
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Tenant's won't suffer. If rent allowance is reduced, landlords will have to reduce rent seeing as the majority of their clientele are social welfare recipients and they would have little hope of finding other tenant's if people can't afford the rent.
I hope rent allowance is slashed in the budget, it has remained atrociously high for WAY too long.
Wanna bet? re landlords I mean. My heart sinks; it took many months to sort out RA here and too many health issues now to face another move.
Our present landlord is a decent one thankfully but that may not be so for many others in very poor accommodation.0 -
ShadowHearth wrote: »A person has to pay for his own rent?! Now this is madness!!!!
90% of people I know that have these benefits are taking social warfare for a ride anyway.
Good, but like allways too late, but I guess it's better late then newer.
Not madness; impossible on a pension etc.
Never heard of social warfare...
Where do your figures come from also? I am insulted. Never mind; one day you too will be old or sick and need help to exist
And if you saw the paperwork and checks etc they do before granting RA..
If this happens there needs to be some kind of safety net for the old etc; especially if this is IN WINTER. What timing... given the harsh winters of late.0 -
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RATM- what Joan Burton has flagged is that headline dole and pension rates will not be reduced in the December budget- however that its inevitable that absolutely everything else will be up for discussion.
FYI- there are also calls to bring forward December's budget to October- to try to assuage the fears of the public and if possible to try to encourage people to spend (while it may sound ironic- apparently we now have the highest levels of savings in Europe- who has this money to save, is beyond me..........)
I haven't seen any set figures being bandied around regarding reductions in rent allowance- however, it would appear to be wholly inevitable that it will be reduced.
Adjacent schemes such as the free television licence, phone rental, heating allowances etc- would all be taken from their current form and administered centrally- with a central body negotiating with suppliers etc, instead of customers having individual accounts that they'd administer themselves. The idea is that deductions in unit charges could be negotiated wholesale. I can't see this happening though- it would be impossibly cumbersome to administer.0 -
It's the usual thing, drop a few hints and rumours about 20%, end up reducing by 2-3% and the people in the firing line are relived.0
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I currently rent out a house for €480 monthly.
If rent allowance is reduced by 20%, then my tenants will only get €384.
My mortgage on the property is €550 monthly. No chance of me allowing it to be rented for any less.
Fingers crossed its all bunkum.0 -
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Fingers crossed its all bunkum.
Its 100% definitely not bunkum.
We need to have a budgetary readjustment of another 4 billion in December.
The government have been forthright about this- the stories they've been planting have been more of the nature of playing a blame game though- blame the previous government, blame the IMF, blame the EU etc
There is no easy way of putting it- all the easy cuts have by and large already been made. Now its chop chop chop on the budgets of the major spenders (Social Welfare, Health and Education). Standing up and advising people that there are no plans to cut pensions or headline rates of UA, UB, DB etc- is as good as it is going to get. Everything else is on the table..........
With respect of landlords not being able to pay their mortgages- there is already a sizeable cadre in this category- and it going to get a whole lot worse. Not only are the plans to rent allowance- but also to cut mortgage interest as an allowable deduction from gross rent before determination of the taxable income. This is actually spelt out in black and white in the IMF part of the agreement- its not something that the government has any leeway with. We've already cut allowable interest as a cost to 75%- the plans are to further reduce this in 3 stages to zero- and we've signed on the dotted line to do it.........
When you have Leo Varadker waxing on about how RA is an artificial support of the rental market- it really is time to sit down and take stock- I have no idea how/why Leo seems to be used to push these- seeing as transport is his remit?
Its not a direct correlation- but for every Euro drop in Rent Allowance levels- within 6-8 months there is a commensurate drop of about 80c in the gross average rental income for any particular dwelling type.
Lots of landlords are going to fold over this- lots have already- the numbers are only going to increase. Its already been mentioned that there has to be a scheme put in place to address the number of delinquent loans in the BTL sector- however as these are not PPRs for landlords, there is little appetite to write down loans- and these foreclosures have by and large been the bread and butter of ALSOP and Allofspace thus far (about 700 units and counting).
It is a really scarey time for all of us.0 -
Tbh I'd be glad if they dropped the rent allowance by a certain percentage. The rents in this country are gonna stay high while the rent allowance is so high. It's keeping rents at a price that people cannot sustain without assistance.
That said, taxes and dole are gonna take a hit too and if dole AND rent allowance are both slashed, it'll make it very hard to rent while unemployed.0 -
Anyone who is currently on rent allowance in a decent place will have to shift down to a worse place. I see a movement of the rent allowance tenants to to really bad properties now.
There will be a small shift down in rents for the better properties that used to be occupied by ra tenants, but the ones who will suffer will be the new tenement dwellers (those getting rent allowance now).
The property section which was never open to ra tenants will stay the same and will not be effected.0 -
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Tbh I'd be glad if they dropped the rent allowance by a certain percentage. The rents in this country are gonna stay high while the rent allowance is so high. It's keeping rents at a price that people cannot sustain without assistance.
That said, taxes and dole are gonna take a hit too and if dole AND rent allowance are both slashed, it'll make it very hard to rent while unemployed.
What they have said is that the dole and pension payments will not be decreased, however they are going to increase indirect taxation, and they are going to ensure that there is a financial incentive to working (the perception at the moment is that for the average person there is absolutely no incentive to work- as gross benefits and disbursements vastly exceed the net take home pay for someone on an average wage.
So- dole and pensions will remain as is- however the sundry benefits such as rent-allowance, back-to-school for 2012, medical card prescriptions etc- will all be chopped (in the case of medical card prescriptions- the proposal is a blanket EUR10 per item- and for those using the monthly DPS scheme, to increase the charge to EUR150 per month (its at 120 at the moment)).
Its more the case that exemptions and exceptions for people on the dole/pensioners/taxpayers etc- will all be slashed- so if you're working you'll pay more tax, if you're not working- you'll have the same amount of money in you bank account- but it'll cost you more for everything- and if you're a tertiary recipient of state funds (be it RTE/ESB/Bord Gais/Landlords etc)- you are going to get a sledgehammer taken to the state element of any funding you get- in this instance rent allowance.........
Rent allowance is an anamoly- that is propping up the whole rental sector, and is the reason that rents have not fallen as they might be expected to do- given the falls in house prices. Annecdotally- its referred to in the press- as the landlord's dole..........
With respect of RA tenants being forced into unsatisfactory accommodation- the proposals are to move the administration of the RA scheme to the councils directly- and to increase enforcement regulation- so in theory- the hovels that we've all lived in at one stage or another- will be condemned to history.........0 -
I currently rent out a house for €480 monthly.
If rent allowance is reduced by 20%, then my tenants will only get €384.
My mortgage on the property is €550 monthly. No chance of me allowing it to be rented for any less.
Fingers crossed its all bunkum.
Your rental money is being paid by MY taxes. And I have decided, I regret to tell you, that I am paying you too much. So I'm going to pay you less in future. Sorry about that.
As for what you will and will not "allow" your place to be rented for, what on earth makes you think you are the one in control of that? If it was up to you how much you "allow" your property to be rented for then why don't you demand €800pm for it? You don't because the market will not pay you that much, and if RA is reduced it will merely amplify that. Nothing you can do about it I'm afraid.
Some friendly advice: you now have advance warning of several months that your income is going to drop. It will drop further in future years. You need to make adjustments to your budgets now to prepare for this.Anyone who is currently on rent allowance in a decent place will have to shift down to a worse place. I see a movement of the rent allowance tenants to to really bad properties now.
But think about it - aren't RA tenants already in the "really bad" properties? If RA tenants aren't in those properties, then who is??
The idea you need to get your head around is that RA properties should already be the "worst" and cheapest properties available on the market. After all, who but those on welfare are renting them? If the answer is the working poor, then how can we as a society morally accept people on welfare living in better accomodation than people on the minimum wage? That should be (indeed, IS) a disgusting outrage.
No, in general these properties are mainly taken by those on RA, so when RA is dropped, Landlords for these "really bad" properties out there will have no option but to continue to rent their properties to the poorest people, namely, those on RA. After all, if they evict those tenants, who will rent their property then?
It is very, very important that people understand the subtleties of this, and to get out of the 2006 mindset. The bubble is gone. Property owners and landlords no longer call the shots. They no longer get to decide how much they "allow" their properties be rented for. A reduction in RA is all good and should be welcomed by anyone not only with a social concern for our most deprived citizens, but also in cold macroeconomic terms.
Bring it on.0 -
Treehouse72 wrote: »Your rental money is being paid by MY taxes. And I have decided, I regret to tell you, that I am paying you too much. So I'm going to pay you less in future. Sorry about that.
As for what you will and will not "allow" your place to be rented for, what on earth makes you think you are the one in control of that? If it was up to you how much you "allow" your property to be rented for then why don't you demand €800pm for it? You don't because the market will not pay you that much, and if RA is reduced it will merely amplify that. Nothing you can do about it I'm afraid.
Some friendly advice: you now have advance warning of several months that your income is going to drop. It will drop further in future years. You need to make adjustments to your budgets now to prepare for this.
But think about it - aren't RA tenants already in the "really bad" properties? If RA tenants aren't in those properties, then who is??
The idea you need to get your head around is that RA properties should already be the "worst" and cheapest properties available on the market. After all, who but those on welfare are renting them? If the answer is the working poor, then how can we as a society morally accept people on welfare living in better accomodation than people on the minimum wage? That should be (indeed, IS) a disgusting outrage.
No, in general these properties are mainly taken by those on RA, so when RA is dropped, Landlords for these "really bad" properties out there will have no option but to continue to rent their properties to the poorest people, namely, those on RA. After all, if they evict those tenants, who will rent their property then?
It is very, very important that people understand the subtleties of this, and to get out of the 2006 mindset. The bubble is gone. Property owners and landlords no longer call the shots. They no longer get to decide how much they "allow" their properties be rented for. A reduction in RA is all good and should be welcomed by anyone not only with a social concern for our most deprived citizens, but also in cold macroeconomic terms.
Bring it on.
+1. Funny thing is, there are many people who are not receiving any benefits and/or are working, and are in a MUCH less deprived state of life than some social welfare recipients.
I saw in another (closed) thread, that a person was earning €346 a week and paying (on top of the rent allowance they receive) €120 per week in rent. They thought this was outrageous. I earn after tax €375 and pay €720 a month in rent (€180 per week) and do not have any assistance from the state. And there are working people in a way worse situation than I am.0 -
ShadowHearth wrote: »A person has to pay for his own rent?! Now this is madness!!!!
90% of people I know that have these benefits are taking social warfare for a ride anyway.
Good, but like allways too late, but I guess it's better late then newer.
90 % ? ..you need to report these people ....thats an amazing figure.I only ever knew one person abusing welfare and she was caught.0 -
Treehouse72 wrote: »Your rental money is being paid by MY taxes. And I have decided, I regret to tell you, that I am paying you too much. So I'm going to pay you less in future. Sorry about that.
As for what you will and will not "allow" your place to be rented for, what on earth makes you think you are the one in control of that? If it was up to you how much you "allow" your property to be rented for then why don't you demand €800pm for it? You don't because the market will not pay you that much, and if RA is reduced it will merely amplify that. Nothing you can do about it I'm afraid.
Some friendly advice: you now have advance warning of several months that your income is going to drop. It will drop further in future years. You need to make adjustments to your budgets now to prepare for this.
If some LLs dont want the unemployed now because they think they cant pay the rent, wait til they KNOW they cant pay it.
But think about it - aren't RA tenants already in the "really bad" properties? If RA tenants aren't in those properties, then who is??
The idea you need to get your head around is that RA properties should already be the "worst" and cheapest properties available on the market. After all, who but those on welfare are renting them? If the answer is the working poor, then how can we as a society morally accept people on welfare living in better accomodation than people on the minimum wage? That should be (indeed, IS) a disgusting outrage.
No, in general these properties are mainly taken by those on RA, so when RA is dropped, Landlords for these "really bad" properties out there will have no option but to continue to rent their properties to the poorest people, namely, those on RA. After all, if they evict those tenants, who will rent their property then?
It is very, very important that people understand the subtleties of this, and to get out of the 2006 mindset. The bubble is gone. Property owners and landlords no longer call the shots. They no longer get to decide how much they "allow" their properties be rented for. A reduction in RA is all good and should be welcomed by anyone not only with a social concern for our most deprived citizens, but also in cold macroeconomic terms.
Bring it on.
At the moment from the €600 - €900 in Dublin (just example figures) there is a mix of working people and ra recipients taking up the properties. Remember 85% of people are not on the dole. There will be some adjustment to the tenants in that range.
Think about 2 people on rent allowance renting a 1 bed apartment in Dublin for €800 pm, where the landlord could easily get a working tenant, but does not harbor the usual bad thoughts about ra tenants, so they rent to the ra tenants. The ra tenants get a huge proportion of that paid for them.
Now they wont have it paid.
So now they cant afford the rent anymore. The LL now wants people who can pay, so asks for working people only.
The only thing the couple can get now is what they can afford lower down in the market. They will probably only be able to afford one of those little holes in Gardiner street now.
Places like this, small and dingy, with cheap rent, will attract the exodus of ra tenants from nice apartments. What do you get - Ghetto. And it spirals down. Even taking the bottom range of the €600 - €900 properties in along the way.
Expect to see the proportion of "No Rent Allowance" ads increase massively.
And the ones who advertise "No RA", but cave when someone throws the sob story on them, will not be able to cave if they want rent now. Only the landlords with the worst properties who cannot get working people into their properties will take on unemployed tenants.
For the record, I agree that RA should be removed, and all property related tax credits for both owners and renters. But make no mistake. There are people who will suffer because of this and I dont think its LLs who will suffer most.0 -
As a tenant myself, I cant wait for the RA to be reduced. Ive only been in the country 4 months and was shocked, that despite the bailouts from the UK etc and the talk about recession in the news, that rents were so high. I live in Malahide and pay 850 for a one bedroom apartment. This isnt an amazing apartment, just a small modern one in a reasonable area. After signing the contract for 12 months, I was passing a sign from the builder who was advertising that you could own your own 2 bedroom for for 575pm! I spoke to my landlord about this and they told me that they had bought when these apartments were double the value. I had been researching on daft.ie for 2 months prior to viewing this place, so it was a reasonable price considering the area and the current market.
After questioning people in my work on why the rents were so high, it was the general consensus that it was directly related to RA. This should have an almost instant reduction in rental prices and will get all of those on RA out of the nicer areas and into the areas where they belong. Ive personally been around to "their" homes and MANY have absolutely no intention of getting a job, why would they, they are having the easy life in nice areas and dont have to work for it. Now this is my PERSONAL experience, Ive asked these people what they do for work, how long theyve lived here and how they enjoy it compared to wherevere they may be from. People in the UK always complain about how the social welfare is being abused by people there, but Ireland seems much worse to me.
I feel for those that are in genuine need, old, sick and those that cannot find a job. The reality, however harsh it may seem, is that there is nothing more likely to get those lazy good for nothings up off their arse if the hand that feeds them stopped, or made their standard of living reduce. Welfare is only intended to help those that need it, not to provide a comfortable living for scroungers. If you dont give sufficient motivation for someone to improve their standard of life, then dont be surprised if they sit back and take everything they can get.
You know something, I dont even blame these people. Morally it is wrong, but my morals are based upon my upbringing and my culture. If this country offers everything on a plate, at the taxpayers expense, then its obvious that certain people will exploit it.
To hell with being PC, offer these people a job for their benefits. Even if it means cleaning the streets, scrubbing off spray paint, tidying up the country. There are multiple tasks needing down throughout the country. If they feel like they dont want to do whatever job they are offered, then cut the welfare money to zero.
What about all these people having babies and not being in a position to be able to support it? Have a house, have some money, here, take it all! Pathetic.
Im really holding back here because I fear for having my account banned, but these opinions are not hearsay, they are based on fact and what I have seen and heard myself. In my job I speak to many people in their homes each day and they are generally quite open and honest about what they say.0 -
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Treehouse72 wrote: »Your rental money is being paid by MY taxes. And I have decided, I regret to tell you, that I am paying you too much. So I'm going to pay you less in future. Sorry about that.
As for what you will and will not "allow" your place to be rented for, what on earth makes you think you are the one in control of that? If it was up to you how much you "allow" your property to be rented for then why don't you demand €800pm for it? You don't because the market will not pay you that much, and if RA is reduced it will merely amplify that. Nothing you can do about it I'm afraid.
Some friendly advice: you now have advance warning of several months that your income is going to drop. It will drop further in future years. You need to make adjustments to your budgets now to prepare for this.
Actually NIMAN, I don't like my tone here. I don't mean to sneer and apologies for that.
I'll give you the honest reason people have these nasty reactions to posts like yours. It is the sense of entitlement. I am not saying that's you, but the post very much reads as though you expect your RA income to stay where it is. That is not a fair or reasonable expectation. These things go up and down with economic cycles. They were up, and are now going down. It's a fairly natural process in many respects. And it is beyond question for the good of the country.
Many of us still feel very bitter about the bubble, and how when we tried to warn acquaintances, friends and family about how broken everything was, we were not very well treated. Some of us see it as our due to have a go back now, and multiple property owners bear some of the brunt. I am certainly a bit like that. I'm not saying it's right or wrong, it's just how it is.0 -
I think rent allowance is way too high, it needs to be reduced. Hopefully rents will come down as well as a result, too much taxpayers money is wasted, rent allowance needs to be reviewed.0
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50% of the private rental market in Ireland is rent allowance sourceAt the moment from the €600 - €900 in Dublin (just example figures) there is a mix of working people and ra recipients taking up the properties. Remember 85% of people are not on the dole.
It is just not true to say that 50% of the renters can be priced out of the market -- who will rent the empty homes that they've been priced out of?0 -
not even wrong wrote: »50% of the private rental market in Ireland is rent allowance source
It is just not true to say that 50% of the renters can be priced out of the market -- who will rent the empty homes that they've been priced out of?
That seems very high to me. How many total rentals are there in Ireland? And how many people are claiming tax credits for rent? Thats a figure ive been looking for for years.
But think about the places where ghettos will happen. The cities. Or maybe all the cheap rent will be down the country, so all the people on the dole will have to leave the cities :eek:
Anyway, im of to catch a flight to a place where there are more jobs, more salary, more services provided for your taxes, though there are slightly higher taxes (for now). And its not even an hour away and €20 to get there. Those on unemployed or on ra should try that too before the new ghettos swallow them.0 -
not even wrong wrote: »50% of the private rental market in Ireland is rent allowance source
It is just not true to say that 50% of the renters can be priced out of the market -- who will rent the empty homes that they've been priced out of?
Landlords should reduce the rents accordingly and then they will still be in the rental market.0 -
Some of the attitudes here are appallingly unrealistic and scathing.
So eg pensioners and the disabled should live in hovels? In your zeal to condemn false claimants you are falling into the kind of mentality that creates ghettos.
Jobs? Who will pay for that kind of street cleaning? The tax payer of course.
Always measures hit at the already poor who cannot earn; E10 for a prescription will certainly kill many off.
A civilised society does not penalise sickness and age. It cares for those who cannot earn.
Someone in a similar thread opined that those on benefits should have only basics. Gee; we have minds as well as bodies. They hit out at the internet; never having lived on benefits they fail to understand that the internet becomes a life line, a library, etc and saves more than it costs.
The attitude seems to be that the weak must be punished by deprivation. Not a civilised attitude....0 -
rent allowance = landlord's dole
Link to rates there and they are far too high
http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/supplementary_welfare_schemes/rent_supplement.html#l62fd2
Our two bed was going for 1,050 and haggled to 900 but it hasn't dropped much further at all
There is a floor on the market and this floor is not helping working people0 -
To all the people whi think ra tenants will have to live under bridges, who do you think is going ti take their place?
Or do you really have no clue at all?0 -
Some of the attitudes here are appallingly unrealistic and scathing.
So eg pensioners and the disabled should live in hovels?
Jobs? Who will pay for that kind of street cleaning? The tax payer of course.
A civilised society does not penalise sickness and age. It cares for those who cannot earn.
The attitude seems to be that the weak must be punished by deprivation. Not a civilised attitude....
I said I feel sorry for the genuine claimants, but that doesnt mean the country can just keep on pumping out money that it doesnt have. Who is paying for the bailouts? Would they be happy to see it being spent in this way? Times are tough, and are going to get tougher, so those that are UNWILLING to contribute, should expect that their life of relative luxury will soon be coming to an end.
As for street cleaning and generally tidying the place up. These jobs need doing anyway, so rather than just leave it undone, as they have not got the funds to pay for it, the people getting benefit money would be justifying their claim by doing this type of work. The taxpayer would be saving as only the materials required to do the job would need to be purchased. The alternative is that youre happy to pay tax for people who REFUSE to even try and find a job, and would rather sit at home watching Jeremy Kyle.
Its all too easy to become all sentimental, but this country cant afford it. The money isnt there. So of course tough and often unpopular decisions have to be made.
Perhaps if those that could work were forced into it, then there would be enough money left to pay for the genuinely needy.
If you disagree, how would you suggest the country finds the money to continually pay out for undeserving and ungrateful "members" (leechers) of society?0 -
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