Well it’s no surprise that our government are cowards but reading the fine print of the social welfare cuts I can’t believe the measures outlined in reference to rent allowance and the way tenants are being manipulated in an effort to reduce the social welfare spend and again landlords are being let off the hook.
Changes are being made to the Rent Supplement scheme to achieve savings of €50 million in 2009 and €78 million in 2010.
-Entitlement is being restricted to individuals who have been an existing tenant for at least six months or who have been placed on a local authority housing list following a full housing assessment. This measure is intended to avoid people moving into private rented accommodation simply because of the availability of Rent Supplement. -The minimum contribution that recipients of Rent Supplement & Mortgage Interest Supplement make towards their rent or mortgage is being increased from €18 to €24 per week (This will bring rent supplement contributions more in line with local authority differential rents).
-The maximum rent limits that will apply to new Rent Supplement payments are being reduced to reflect reductions in private rent levels in recent months. Reductions will be 6% to 7% on average, ranging up to 10%, depending on the geographical area and household size.
-In order to encourage landlords of existing rent supplement tenants to reduce their rents given the reductions in the market as a whole, the payments currently being made to tenants are being reduced by 8%. While tenants are contractually obliged to pay the rent agreed to in their lease, it is hoped that landlords will decrease the rent in recognition of the fact that rents have fallen generally and that there are now a large number of vacant rental properties nationally.
In order to encourage landlords to reduce rent the Government is reducing the rent allowance by 8 percent and increasing the amount tenants must contribute. And they are expecting tenants to do the negotiating to get their rent decreased! Incredible!
It’s so astonishing it’s worth paraphrasing and repeating - Limits are being reduced creating ghettos and allowances being paid are also being reduced and rental contributions from tenants are being increased – a triple whammy.
As I said previously rents on properties in the rent allowance sector are not falling as quickly as they are in other areas of the market. Rents outside of Dublin are not falling as quickly either. Finding a property and landlord which accepts rent allowance is very difficult no matter how much rents are falling due to issues of tax avoidance and landlords not wishing to rent to people in receipt of social welfare payments.
Unless discrimination against tenants who receive rent allowance is barred (and this is very unlikely as property owners rights remain sacrosanct!) we will see tenants becoming homeless and living on even lower incomes as they become afraid to raise the issue with landlords in case they are unsuccessful or are unable to find somewhere else to live.
Landlords and developers still remain protected. And apartments will remain empty and sites unfinished and the homeless list growing as no money will be available for social housing.
And oh yes landlords still get €500million in tax relief on their mortgage interest after today’s budget. Fairness!