Enda Kenny announces ‘radical’ changes to welfare - Journal

thejournal.ie/enda-kenny-ann … 6-Jul2011/

If the government really are trying to put clear blue water between low paying jobs and welfare then surely it is inconceivable that they are not aware of the effect rent allowance plays in that equation.

I think Pat Leahy’s take on this in yesterday’s SBP is correct: the government has now got to a “let’s just get on with it” attitude. I think they really are going to get tucked into all this stuff because they finally get it that we’ve run out of road. No other choice.

seems to me (from afar) that the polls are giving them confidence
the fact that FF are actually dying a death (AFAICS) means that they finally seem to be growing a pair without the spectre of Mickey Martin lamenting the poor, sick, vulnerable etc etc

Joan Burton said on RTE this morning that rent supplements were going to be looked at.

Cue uproar from the middle class as landlords dole is being targeted. I demand the state subsidise my BTL mortgage :exclamation:

All within the margin of error. All this being discussed on Newstalk at the moment if anyone is particularily interested.

Nothing like the uproar that we can expect from the poverty industry - Sean Healey and Co will be squeeling like pigs to the slaughter when they are given free reign on Morning Ireland and the likes. I’m also convinced that the Unions very much like the idea of large numbers on the lifestyle dole. Less in the labour market means more money for their members. Remember their outrage when it was suggested last year that single mothers/lone parents might be redesignated as jobseekers when the child reaches secondary school age? You would have to wonder why Jack O’Connor was so vehemently against encouraging these young women into the workkplace.

rte.ie/news/2010/0529/welfare.html

…the aim was to support lone parents while getting them into education and training and eventually into employment.
The Department had set the age at 13 years because it was felt that it was after this period of primary education that parents were facing less expenditure in bringing up their children.

General President of SIPTU Jack O’Connor described the proposed changes as ‘heartless and reprehensible beyond belief’.

The sooner the better that Rent Supplement is rationalised to the point of extinction - this was one of the incentives to lunacy, very much within government control, that encouraged reckless BTL lending and continues to distort whwtever remains of the property market to this day.

How much was paid out over the years?
Were all the recipient landlords tax-compliant?
How many dwellings would that sort of money build or buy for a more direct public assisted housing programme?

There are a lot of negative comments in relation to rent allowance.

I am curious as to what is an acceptable level of RA.

Cutting off the OPFA when the youngest child reaches 14 is more than a proposal. It has happened, it is on the statute books. It is being transitioned in for claimants already in the system though.

Rent allowance should be abolished and replaced with a slightly increased jobseekers’ allowance. People will of course panic at first, but then rent levels will collapse to affordable levels.

Of course it would help if the government offloaded the property debt onto the ECB before this. :nin

Zero would be acceptable under the condition that all the NAMA properties were released onto the market.
Bankruptcy reforms & speedy repossessions would help too.

There are 2 separate points here

If the RA was set to zero, why would a landlord rent to a SW tenant?
How much rent should a SW tenant pay?
If they can’t afford the rent what happens?

I do not believe that NAMA owns a huge amount of unoccupied apartments/houses in Dublin? If so, where are they?
I agree they may own some, perhaps even as many as 1000. But this is not a large number relative to the size of the Dublin market.

More to the point if NAMA owns this large stock of properties why does it not rent them out to SW tenants?
Especially if their is so much money to be made.

The majority of landlords in Dublin own 1-4 properties.
Typically these properties are on tracker type mortgages and up to date.
So there is not a huge stock of property waiting to be reprocessed.
The primary reason Irish Life was bailed out, where unprofitable tracker mortgages.

In fact, rents could probably increase if a new generation of landlords were to replace the existing ones.
BTL mortgage costs are in the region of 6% if (available) versus the 2.5% typically being paid by established landlords.

Property prices have fallen 50% so the new generation of landlords have a lower debt but a higher cost base.

Theyve shown a lot of balls alright targeting the poorest, pity they are completely useless where it matters

There is another factor you have to take into account in the R.A. cost benefit analysis.
If they stop it, the council still has to not only provide accommodation they would have to maintain it also, at the moment these property maintenance costs fall on the private landlords.

Typical costs for a landlord

Service Charge: 1.5 months rent p.a.
Repairs and maintenance: 1 months rent p.a. (averaged over 5 years)
Letting fees and voids 1.5 months p.a.

Total: 4 months rent p.a. before interest costs.

Some move in with friends and family. Some move in to house shares or dingy bedsits. Some don’t have friends and family to move in with and a few will end up on the streets. Some will take up the offer of vacant council housing they have been turning their noses up at up until now preferring to stay in better specified Private Rented Accomodation. That’s what will happen.
Hopefully the working people who find they have more disposable income with lower rents will stimulate the economy by spending more money in the economy and employ some of those people on welfare.

You present the prospect of cuts in Rental Allowance as being a choice for government.
Some time soon Ireland will not be able to borrow any more money and at that stage the purse will be empty and there will no choice about it. Choosing to cut RA, free TV licenses, free public transport, free phone line rental now might forestall that day or contribute toward eliminating the need for it completely.

Your username indicates you are a Landlord.
I myself am trying my best at the moment not to become an accidental landlord and will not enter the market.

With the anonymity of the message board tell us how many properties you have, how many RA tenants you have or if your rental income per property is aligned to Rent Allowance levels and what would be the implications for you of seeing rent rates dropping by 15 to 20% per month.

TwoGaffs was a good sport about owning up to his viewpoint on the market without ever hiding behind arguments like think of the poor social welfare tenants (who happen to be bankrolling me).
Can we have similar honesty from you as to your position.

ooh I see you’ve posted in the meantime about “typical” costs for a landlord. you are keeping this discussion very much at arms length.

Even if NAMA has less than 1,000 properties in Dublin welfare is still 50% of the market so prices will come down if it were 0.

rte.ie/news/2010/0610/rent.html

rte.ie/news/2011/0725/economy.html

Two things I’d do.

  1. All PRTB lettings put rent from a property into its own nominated bank account. This gets taxed at 25% of the gross. Jail for anyone who doesn’t do this.
  • It encourages landlords to own property outright rather than be leveraged
  • It enforces tax compliance
  1. Set max welfare cheque for a family. No family gets more than the state than the average industrial wage after tax.