Budget 2012 - New Rent Supplement Limits

Zamboni

http://budget.breakingnews.ie/news/rent-supplement-minimum-contribution-to-increase-531028.html

Changes are being made to the Rent Supplement scheme with the minimum contribution payable by tenants set to rise.

The minimum contribution that single tenants make towards their rent will increase by €6 to €30 per week, while couples willl have to pay a minimum of €35 per week

The change will achieve savings of €55m in 2012, Minister for Public Expenditure Brendan Howlin announced.

New rent limits will also be introduced in 2012 to ensure that the maximum rent limits for Rent Supplement are set at appropriate levels.

"This will ensure that the amount paid by the State properly reflects the levels of rent in a particular area and is not an artificial subsidy for landlords," said Minister for Social Protection Joan Burton.

However Fianna Fáil Senator Paschal Mooney criticised the move as "a crude cost cutting measure".

“The reductions come at a time when rents are stabilising across the state, particularly in Dublin," Senator Mooney said.

"Without a holistic approach to social housing waiting lists, reducing the supplement may price vulnerable families out of the market and ghettoise welfare recipients."

I, for one, look forward to seeing these new limits.

gurramok

This time last year, it was the rural areas that were hit the most in reductions and they hardly touched the limits for the cities which was scandalous. Hopefully this time, there will be some reductions especially for 1bed apts which still command huge rates disproportionally to their size.

stargazer 68

The problem with these changes are they affect new rentals. However if you are already renting somewhere the rent stays the same - unless you can negotiate a reduction with the landlord which is unlikely as they are being hit with mortgages from the boom days!

shindig-jp

Zamboni wrote: »

http://budget.breakingnews.ie/news/rent-supplement-minimum-contribution-to-increase-531028.html



I, for one, look forward to seeing these new limits.

For who , the landlord or the tenant ? €55m in 2012 to disappear out of circulation does not make sense to a business minded person.

ann0

Zamboni wrote: »

http://budget.breakingnews.ie/news/rent-supplement-minimum-contribution-to-increase-531028.html



I, for one, look forward to seeing these new limits.

so you are looking forward to seeing a lot of people out on the streets.well hopefully one of your own might end up there.you wont be so smart then.the likes of you make me sick.

hopefully landlords will have a bit of decency and lower the prices

zef

I agree that it will ghetto-ise people and areas.
There is an estate near me, built in boom-time. Apts & small houses, a few yrs ago was full of young couples with kids. They all seem to have sold up and many units have been transferred to various trusts and are filling up with unemployed singles. Personally i know of a few ppl who had difficulty finding suitable accom getting apts there in the new year.
I just find it interesting how the demographics are changing there - not that these ppl are 'not entitled ' . But i can see a big difference in the estate lately, walking thru in the day its loud music & smell of ganj.

Zamboni

ann0 wrote: »

so you are looking forward to seeing a lot of people out on the streets.well hopefully one of your own might end up there.you wont be so smart then.the likes of you make me sick.

hopefully landlords will have a bit of decency and lower the prices

You clearly have no grasp of the implications.
This would not result in one person becoming homeless.
The government is simply currently overpaying for a service when supply is greater than demand.

Ps: There is no need to wish hardship upon my kin, it is quite rude and inappropriate for civilised society.

quaalude

ann0 wrote: »

so you are looking forward to seeing a lot of people out on the streets.well hopefully one of your own might end up there.you wont be so smart then.the likes of you make me sick.

hopefully landlords will have a bit of decency and lower the prices

No-one wants anyone to be put out on the streets.

An artificial floor is set on rents by the government, and it isn't right - the government pick up the tab for 50% of all rental properties, making it more expensive for everyone - including all those who pay rent themselves, without government assistance. The only ones to benefit from this system are landlords.

It won't be a sense of decency that will make landlords lower their prices - they will have to, to rent out their places.

stargazer 68

quaalude wrote: »

No-one wants anyone to be put out on the streets.

It won't be a sense of decency that will make landlords lower their prices - they will have to, to rent out their places.

Unfortunately they wont. If you check out properties on daft etc the majority of them say rent allowance not accepted. They will simply rent to other tenants who are prepared to pay the full price. Therefore RA tenants are out!

Zamboni

Dovies wrote: »

Unfortunately they wont. If you check out properties on daft etc the majority of them say rent allowance not accepted. They will simply rent to other tenants who are prepared to pay the full price. Therefore RA tenants are out!

On the contrary, if the other tenants are fully aware that the price offered by the government for supplement has decreased, they too can and will pay less bringing the average rental price down across the board.
The two do not exist separately.

Ray Palmer

Zamboni wrote: »

On the contrary, if the other tenants are fully aware that the price offered by the government for supplement has decreased, they too can and will pay less bringing the average rental price down across the board.
The two do not exist separately.

I think that is overly simplifing what could happen. Many people not used to the benifits system will pay the shortfall of their rent. People can't just change their leases becasue the government stop paying as much. Effectively you are suggesting theat people should break agreements while the goverenemt won't do the same. It will further effect people on RA as LL won't want to take the risk in the future.

A mass movement of tenants will happen if they cut is too much. You also got to remember that unemployment is not effecting the whole population. AS also stated taking income out of the economy will have a big effect.

Look at something simply and you simply miss the facts

gurramok

The government said it only affects new leases and renewals, nothing about breaking leases Ray. RS tenants have to learn to haggle just like the rest of us when negotiating.

Zamboni

Ray Palmer wrote: »

I think that is overly simplifing what could happen. Many people not used to the benifits system will pay the shortfall of their rent. People can't just change their leases becasue the government stop paying as much. Effectively you are suggesting theat people should break agreements while the goverenemt won't do the same. It will further effect people on RA as LL won't want to take the risk in the future.

A mass movement of tenants will happen if they cut is too much. You also got to remember that unemployment is not effecting the whole population. AS also stated taking income out of the economy will have a big effect.

Look at something simply and you simply miss the facts

I was responding to a straighforward statement, there was no need for an elaborate detailed explanation.
Something is only as simple or as complicated as you make it.

Fwiw, I never made any suggestion that anybody should break a contract.
Please do not put words in my mouth.

Anyway, I hope they release the information soon as I'd rather debate on actual information rather than just debate unproductively over speculation.

BostonB

Dovies wrote: »

Unfortunately they wont. If you check out properties on daft etc the majority of them say rent allowance not accepted. They will simply rent to other tenants who are prepared to pay the full price. Therefore RA tenants are out!

and yet

In 2011 the Government paid €500m in rent to landlords for 94,000 social welfare tenants living in private apartments and houses.

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

half a billion.

Zamboni

Zamboni wrote: »

Anyway, I hope they release the information soon as I'd rather debate on actual information rather than just debate unproductively over speculation.

It appears they have actually updated their website with the limits going forward.
I think the cuts are reasonable. Not too excessive and not to small as to be pointless.

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

A Disgrace

I don't think anyone is getting too concerned about the affect that the new limits will have on their pockets, it's more the fact that many, many people will now be forced to leave their homes

(I personally know someone who has been renting a property for 6 years, lost their job, is now claiming RA but will be way over the limit when the reviews happen and will have to move)

And the choice of where they move to? Currently on Daft there are only 14 flats in the whole Dublin area available for less than €475 that accept RA.

Ray Palmer

Zamboni wrote: »

Anyway, I hope they release the information soon as I'd rather debate on actual information rather than just debate unproductively over speculation.

Why did you post the thread at all then? :rolleyes:

BostonB

A Disgrace wrote: »

...
And the choice of where they move to? Currently on Daft there are only 14 flats in the whole Dublin area available for less than €475 that accept RA.

The 94,000 must be living somewhere.

Zamboni

Ray Palmer wrote: »

Why did you post the thread at all then? :rolleyes:

It was a news item at the time to be fair.

Zamboni

A Disgrace wrote: »

(I personally know someone who has been renting a property for 6 years, lost their job, is now claiming RA but will be way over the limit when the reviews happen and will have to move)

And the choice of where they move to? Currently on Daft there are only 14 flats in the whole Dublin area available for less than €475 that accept RA.

Only 1-2 generations ago (before rent supplement existed) it would not have been uncommon for a 2 bed house to have over ten occupants.
I'm not suggesting that we return to that but why on earth should the taxpayer fund an individual to have their own flat?!
The introduction of rent supplement fundamentally changed how we view minimum accomodation standards but the state cannot afford that level anymore so that perception must again change.

A Disgrace

Zamboni wrote: »

Only 1-2 generations ago (before rent supplement existed) it would not have been uncommon for a 2 bed house to have over ten occupants.
I'm not suggesting that we return to that but why on earth should the taxpayer fund an individual to have their own flat?!
The introduction of rent supplement fundamentally changed how we view minimum accomodation standards but the state cannot afford that level anymore so that perception must again change.

Well, there isn't an endless supply of shares either, and I find that the vast majority of house-shares do not want a unemployed RA recipient living there either... In fact, a quick Daft search turns up ONLY 27 house/flat shares in the ENTIRE Dublin area that accept RA and are under the new €300 limit

Here's an example of a search for Sth Dub

"Sorry, but your search for a room in shared accommodation where landlord accepts rent allowance for less than €300 in South Co. Dublin yielded no results."

I'm not saying rents won't drop eventually, but a serious amount of reductions have to happen VERY quickly, as the traditional rent reviews for RA recipients happen at the end of this month. And I do not see that happening, at all.

shoegirl

Dovies wrote: »

The problem with these changes are they affect new rentals. However if you are already renting somewhere the rent stays the same - unless you can negotiate a reduction with the landlord which is unlikely as they are being hit with mortgages from the boom days!

Not anymore, apparently they are phasing in cuts as the tenants lease renewal approaches (interesting to be encouraging leases btw when PRTB rights exist) so that tenants have a chance to leave if the landlord refuses to cut the rent.

It denies the landlord of a chance to gouge the tenant if they are midlease, but it does risk that the tenant may have to leave if the landlord is stubborn. That said, any sensible landlord with a happy sitting tenant would be best advised to shoulder the cut as they could end up with a vacancy and have to cut the rent even more to get a new tenant in.

Its not unfair when you consider so many working tenants have had severe tax increases and pay cuts but in many cases will not have had a rent reduction.

Pkiernan

Since Landlords have effectively no rights to evict for non-payment of rent, or under payment of rent; a reduction in RA just means that a lot more tenants will get away with paying less each month. They will not be making up the difference themselves.

The Landlords are the ones who will suffer financially.

It's strange that many people think that descrimination by LL's against RA recipients should be outlawed (myself included), but then go on to want the RA reduced.

Does not compute...

shoegirl

A Disgrace wrote: »

I don't think anyone is getting too concerned about the affect that the new limits will have on their pockets, it's more the fact that many, many people will now be forced to leave their homes

(I personally know someone who has been renting a property for 6 years, lost their job, is now claiming RA but will be way over the limit when the reviews happen and will have to move)

And the choice of where they move to? Currently on Daft there are only 14 flats in the whole Dublin area available for less than €475 that accept RA.

If even 30% of RA landlords evicted their tenants, it would glut the market with the 30,000 properties vacant, to such an extent that prices would have to drop. Landlords would not be so foolish as to flood the market if vacancy levels rose. Plus traditionally, there is a higher risk of substandard properties in the RA segment of the sector, which places an even greater risk of difficulties in getting in a new tenant.

The big danger is that such landlords might decide now is a good time to get out, or that they might try to cross subsidise by rising the rent for working tenants (which they have always done in the past). The other danger is that they may also demand under the table cash top ups from the tenant in order to declare a lower rent beneath the limit. The only way to prevent the latter from happening is to implement stronger penalties for doing so.

Pkiernan

shoegirl wrote: »

Its not unfair when you consider so many working tenants have had severe tax increases and pay cuts but in many cases will not have had a rent reduction.

Yes, and the evil landlords don't have to pay any extra taxes do they???????? Get a grip. :rolleyes::rolleyes::rolleyes::rolleyes:

You make me want to vomit. Really, you do.

Pkiernan

shoegirl wrote: »

Its not unfair when you consider so many working tenants have had severe tax increases and pay cuts but in many cases will not have had a rent reduction.

Yes, and the evil landlords don't have to pay any extra taxes do they???????? Get a grip. :rolleyes::rolleyes::rolleyes::rolleyes:

You make me want to vomit. Really, you do.

gurramok

Pkiernan wrote: »

Yes, and the evil landlords don't have to pay any extra taxes do they???????? Get a grip. :rolleyes::rolleyes::rolleyes::rolleyes:

You make me want to vomit. Really, you do.

Investments go up and down, landlords knew this before they entered the business.

BostonB

shoegirl wrote: »

If even 30% of RA landlords evicted their tenants, it would glut the market with the 30,000 properties vacant, to such an extent that prices would have to drop. ,....

..and 30,000 new tenants?

L1011

BostonB wrote: »

..and 30,000 new tenants?

30,000 new tenants unable to pay the prices the landlords were going to look for.

Icepick

Pkiernan wrote: »

The Landlords are the ones who will suffer financially.

So the state should subsidize wannabe entrepreneurs who made a bad investment from people's taxes?


...again

A Disgrace

I think we can agree that judging by the confusion, the amount of debate, the differing stats and the whole grey area that is private renting, that this whole thing is a little bit of a mess. The Government did themselves no favours by bringing in the new limits on Jan 1. They said in the budget that limits would be 'reviewed' in 2012, and while that is true, they obviously had planned to do so on Jan 1st

Its going to be very interesting.