Can a tenant on rent allowance take a sub-let?

Hi,

I have the following situation and would appreciate any advice, or recommendations on the best place to go for advice. I'm currently trying to rent out a property in Dublin and I have found a potential tenant who is currently on rent allowance. The problem is that I am looking for €1400 for my property, and the potential tenant has told me that the health board will only allow them to rent a property up to €1000. The potential tenant has asked me to sign a form for the health board stating that the rent is only €1000 (even though they will be paying me the full €1400) - this is something I am unwilling to do, despite the fact that the tenant says that "all the other landlords are doing it". However, I really like this tenant and am prepared to find alternative means of renting my house to them. So, I'm looking for suggestions.

One idea I had was to rent the apartment to a friend of the tenants (for the full €1400) who would then sub-let it to the tenant (for €1000). This sounded reasonable as it could be argued this friend could occasionally stay in the house and avail of the facilities there. However, would this come under the definition of "sharing" as I understand that the rent allowance for sharing is only €400 per month as opposed to €800 for living alone?

The other question I have is: will the health board even accept the sub-let as a legitimate tenancy? Whose signature would go on the health board forms? Mine as the owner or the friend as the sub-letter? Are there any other issues with doing this?

Is there a more practical way to achieve this while staying within the law?

any advice or suggestions gladly accepted.

Thanks.

All i can tell you is that the tennant is telling the truth in saying that all landlords do it - in fact the community welfare officers more often reccomend it, with a nod and a wink of course

it would not be possible to find a place at all if sticking to the official guide figures for dublin

the supplement acts as a welfare payment to landlords in effect so if the gov were to raise the levels it would in turn raise rents and have all sorts of knock on effects down the line: i cant tell you to do it, just that it does in fact get done

about your sublet question i have no idea, only to say it seems over complicated at first glance

I know for a fact that other landlords do it.

The Lease Agreement should show the rent as €1400.

Hillsalt said:

The Lease Agreement should show the rent as €1400.

Click to expand...

Why do you say that? Won't the welfare office ask to see the lease?

Just to clarify, I think I should have stated "Rent Supplement" as the potential tenant is working part-time (if I correctly understand the difference between RA and RS).

Rent Allowance and Rent Supplement are the same thing - the official name is Rent Supplement, it's colloquially called Rent Allowance.

If the person is working part-time, that may affect their entitlement to Rent Supplement (because it's means-tested, all of their income is taken into account) - do they know if they'll qualify at all, regardless of the rent limit?

Hi,

Thanks for replying.
They are already receiving rent supplement in their exisiting tenancy, so I guess they've already been through that hurdle.

So no advice on this? I would be grateful for any help.

Here are excerpts from the appropriate SW legislation on Rent Supplement (link below).

(a) he or she is a bona fide tenant

(italics are in the legislation, not mine)
It could be argued that a sub-let tenant is not a bona fide tenant.

I'm surmising that the prospective tenant is either a one-parent family with 1 child or a couple with 1 child (based on the €1000 limit you mentioned). Rent Supplement would not be paid if a family of this size rented, say, a 4-bed property, as they would be over-accommodated. In such cases, the tenant would be asked about sharing with someone else (who would have to rent directly from the landlord, not from the tenant).​

(3) A rent supplement shall not be payable where the amount of rent exceeds the appropriate maximum amount of rent as determined under paragraph (i) of sub-article (2).
​

This states that if the rent being charged exceeds the max rent limit set by SW, no rent supplement is payable. As other posters have mentioned, landlords have completed the Rent Supplement application forms and have stated the rent to be less than actually charged, in order to help the tenant qualify for the supplement. This could be seen as colluding in SW fraud by providing false information - there haven't been any cases followed through as yet, but anything's possible if SW are looking for savings & cutbacks in the current climate.​

It could also place the tenant in financial difficulty - for example:
Rent is €1400 pcm, declared as €1000pcm.
Family on One parent family payment for 1 adult + 1 child = €221.80.
Rent Supplement payable (based on 1000 rent) is €944 per month
The tenant must find an additional €450 per month for the rent from a monthly income of less than €900.
It might be possible for the first few months, but what's likely to happen over time is that the tenant falls into arrears because they can't meet the balance.​

Link to SW legislation on SWA and Rent Supplement -

http://www.welfare.ie/topics/legis/si412_07.pdf

The Max Rent Limits were updated from July 2008 - although most stayed the same.

Gipimann, thank you very very much. That was extremely helpful and convinced me not to go ahead with the rental. I certainly don't want to do anything fraudulent and the workarounds we looked at were non runners.

Many many thanks again.