Participants in the Fair Deal Scheme should be obliged to rent out their houses

[odyssey06]

But the fact that our social welfare system encourages people not to work, should not be a reason for not reforming the Fair Deal Scheme.

If we're reforming the Fair Deal Scheme, let's talk about the 50% of people contributing nothing TOO, rather than just seeing what more blood we can squeeze from the stone that's already contributing 80% of income + 7.5% of assets + 7.5% of the value of their home multiplied by three.

I have made many points about reducing the strain. In particular cutting non-contributory social welfare and putting everyone's PRSI into an account in their own name. I said last week on the radio that the dole should be abolished for anyone under the age of 26. If they are not prepared to work, then they should not be getting social welfare.

I agree with all of these... but I think you need to connect the strands together.
We need to get some reforms onto the table first that lessen the strain... any idea being put out there that's just is about putting more strain on I cannot agree with. There has to be a balancing.

And in the current climate, anything that gives the Minister for Housing an excuse to divert attention away from hammering him over the tens of thousands of homes not being built is a bad idea (aside from the particular merits of the scheme which we can agree or disagree on).

 

[Early Riser]

Thirsty asked about the principle and we should discuss the principle. We are not paying anything near enough in taxes to provide for our pensions, health care and elderly care. Yet we expect high pensions, health care and to be able to leave our homes and other assets to our children.

Yes, and many of us have accepted this issue of funding. It needs to be done fairly in relation to Fair Deal. I have several times spoken about increasing the contribution from the PPR. You have ignored this and persisted in a proposal that would raise substantially less money but would put enormous extra stress on many individuals and their families at a time which is, for many, already very stressful (I don't know if you have ever dealt with supporting someone with acquired disability?).

As for raising more funding generally, you also ignore the proposal for a levy on all estates after death. If you don't perchance suffer a disability you get off scott free. Yes the "loser loses it all" as they are the only ones who pay directly - up to a limit but a limit which is arbitrary and can be changed.

As for the housing aspect of it, you have also ignored the incentive proposal, which seems much more feasible and practical. So I wonder if this is a red herring.

One of the advantages of encouraging people to pay for themselves is that they would realise the true cost of it.

An advantage of a contribution towards costs is that it discourages excessive, inappropriate use. That is quite different from getting people to "pay for themselves". In the context of a public system funded through taxation that is a "loser loses it all" approach.

(Does the health system need to be reformed? Yes, but that is completely different)

But now that you mention it, people should pay for their own healthcare if they can afford it.

Brendan

Not at all. If I have assets of €300k when I go into a nursing home, I am not financially vulnerable. I can pay my own way.

I find "the loser loses it all" works for me for as an aide memoire for this principle. I don't know why you object to it.

 

[Early Riser]

Where they can provide for themselves, they should do so and not rely on the state to pay it.

The state should pay only where the person can't afford it.

So the people who can pay for themselves pay for the people who can't pay for themselves.

Also, the people who can pay for themselves should pay for the themselves.

The people who can pay for themselves might have thought when they were paying taxes that they were paying for themselves as well as the people who can't pay for themselves.

This needs to be explained to them

 

[twofor1]

I will repeat. I should not pay for your nursing home care, so that you can leave your assets to your children.

And I repeat that this is only one issue.

The bigger issue at the moment is leaving perfectly good houses which could accommodate people empty. We should be encouraging the owners to put them back into use.

Brendan

I agree, you should not pay so my children can inherit more, and presumably my children would have no issue inheriting less once I was looked after.

I agree we should be encouraging owners to put vacant homes back into use.

But compelling the elderly to rent their vacant homes is not the answer for the numerous reasons already pointed out by many here.

Increasing both the 7.5% contribution and the 3 year cap has to be done to meet the ever increasing cost of Fair Deal.

Apart from the tax relief on rental income being considered by minister Murphy for those who can and want to rent, an incentive could also be introduced for those who want to sell but are discouraged as the proceeds of the sale are assessed indefinitely, whereas if they keep the house it is disregarded after 3 years.

Would such incentives not be far simpler and compassionate way of putting many of these vacant homes back into use ?

Those who for whatever reason want to keep their family home unoccupied can continue to do so.

 

[twofor1]

If we're reforming the Fair Deal Scheme, let's talk about the 50% of people contributing nothing TOO, rather than just seeing what more blood we can squeeze from the stone that's already contributing 80% of income + 7.5% of assets + 7.5% of the value of their home multiplied by three.

Without a doubt, there are some freeloaders who contribute nothing and get the benefit of everything, that unfortunately is always going to be the way.

But there are also many who worked hard all their lives in less well paid jobs, lived in rented accommodation etc and after a lifetime of work still have nothing other than 80% of their state pension to contribute. I have no issue with these people receiving state support.

What definitely needs to be included in any reform of Fair Deal is more stringent measures to ensure all income and assets are declared.


http://www.independent.ie/business/...r-of-people-underdeclare-assets-35404772.html

 

[Gordon Gekko]

I vehemently disagree with your view on this Brendan.

Applying the same logic, a "wealthy" person should receive no State support for healthcare or pension until his/her asset base is exhausted.

It's something I'd expect from Boyd-Barrett, not Burgess!

And in any event, I suspect it's the squeezed middle who'd fall victim to your suggestion, as Fair Deal doesn't make sense for wealthy people.

 

[Protocol]

I think we need to look at the whole picture realistically: The social insurance model was never designed to pay for nursing home care - pension and unemployment yes but not residential NH care. General taxation was designed to pay for, as well as everything else, basic health care. The model of health care has developed over the last few decades, driven by medical and scientific research to the level we are approaching, which is laying massive costs on public health systems. General taxation has not kept up with the contribution needed to fund this, in a sustainable way. The NHS is under incredible pressure an is in danger of breaking apart.

There is an economics literature about what insurance should be private and what should be social.

Note that in Germany people do pay compulsory long-term care insurance.

The SI system in Germany is as follows:

Health insurance = 7.3% ee + 7.3% er = 14.6% [employees pay an extra cont, so 8.5%]
pension insurance = 9.35% ee + 9.35% er = 18.7%
UN insurance = 1.5% ee +1.5% er = %
LT care insurance = 1.275% + 1.275% = 2.55%, with childless workers paying an extra 0.25% on top = 1.525%

Total is approx 21%.

 

[Protocol]

I will get out my copy of Nicholas Barr Economics of the Welfare State, and see what it says about LT care.

Page 178 - ".....LT care is a suitable case for social insurance."

Although he goes on to say it's an unresolved area.

 

[Gordon Gekko]

I note that Eoghan Murphy has clarified that the elderly in nursing home care will NOT be hit with any Vacant Home Tax.

A welcome move.

The tax code is full of exemptions for people who are forced to move out of their home; the State recognises that a tax penalty shouldn't arise in such circumstances.

 

[Brendan Burgess]

idea being put out there that's just is about putting more strain on I cannot agree with.

There is no strain. They have a valuable asset which they are not using. It should be used to pay their expenses rather than impose the bill on me. And I don't want to pay the bill either for those who won't pay their mortgage or who can work but won't. But the failure to tackle one does not mean that we should not tackle the others.

Brendan

 

[Brendan Burgess]

the State recognises that a tax penalty shouldn't arise in such circumstances.

Where is the tax penalty?

People who are capable of working should work.
People who are capable of earning an income through letting a property should do so.

Brendan

 

[Gordon Gekko]

Where is the tax penalty?

People who are capable of working should work.
People who are capable of earning an income through letting a property should do so.

Brendan

A "Vacant Home Tax" is being floated by Minister Murphy. However, he has clarified that nursing home residents would be exempted from any such charge.

In much the same way that PPR Relief or the Dwelling House Exemption provide concessions for forced absences, the elderly will be protected.

Should recipients of social welfare be forced to take lodgers in? Where would this stop?

 

[Early Riser]

A "Vacant Home Tax" is being floated by Minister Murphy. However, he has clarified that nursing home residents would be exempted from any such charge.

In much the same way that PPR Relief or the Dwelling House Exemption provide concessions for forced absences, the elderly will be protected.

Should recipients of social welfare be forced to take lodgers in? Where would this stop?

Gordon, did you ever get the impression of being wound up ?

 

[Brendan Burgess]

Should recipients of social welfare be forced to take lodgers in? Where would this stop?

Hi Gordon

I was discussing this thread with a friend of mine.

He lives in a three bed house in a very lettable which he owns outright.

He is on Jobseekers Allowance and when they visited him and found he had a tenant, they said they would have to reduce the social welfare, so he got rid of the tenant.

So the answer to your question is "Absolutely yes.". A person with two spare rooms in a mortgage-free house in Dublin probably should not be getting any social welfare.

Brendan

 

[Brendan Burgess]

People who are working and in good jobs who have a spare room could also take in a tenant and help solve the housing crises just as good an idea as asking someone who cannot work or look after themselves to solve the housing crises,

We are not paying social welfare to people who are working and in good jobs.

We should pay social welfare only to people who have no other source of income. If someone has a source of income but chooses not to exploit it, then they should not be getting social welfare.

Brendan

 

[Early Riser]

From “The Daily Chronicle”

Gardai were called to a house in a South Dublin suburb this morning when a member of the public reported suspicious activity. Following the discovery of a body, the scene was sealed off and a murder investigation commenced. Family members have been contacted and are understandably distraught.


Subsequently a well known economic commentator criticised the investigation. "From what I understand the house in question is in a desirable neighbourhood and mortgage free. I should not be paying the Gardai to investigate the crime while the family have assets to pay for it themselves”, he said. “Those who can afford to pay should do so”.


He then queried if they had arranged to rent the house as we have a housing crisis. “It's immoral to have a system which encourages them to leave it empty”, he insisted.

Listeners were at first bemused but he then went on to explain that “it is as if we had shortages of food in Ireland and we were paying some farmers not to produce food. The freeloader culture should be tackled.”

 

[Thirsty]

You know I was being more than a bit 'tongue-in-cheek' when I suggested that those who need Hospice care, or cancer treatment or parents of children with disabilities should be made to repay those costs from their estate.

But if what you propose comes to pass and I find I am terminally ill, I will save both the state and my children a bucket load of money & just take my own life..... problem solved.

 

[Dan Murray]

But if what you propose comes to pass and I find I am terminally ill, I will save both the state and my children a bucket load of money & just take my own life..... problem solved.

Fair enuff - so long as whatever emergency services, post-mortem, coroner's court and all other related costs are deducted from your estate. There's no way that I should be paying for your decision to your Quietus make....

 

[AlbacoreA]

...
We cannot leave houses empty during a housing crisis. We have to get over the complexities involved in either selling the house or letting it out.
....

....An amendment to the Fair Deal Scheme so that those in receipt of it should rent out their houses. ..

The problem with that is the Govt has consistently shown itself unable to manage the private rental market. (or housing). Either deliberately or not.
Everything they do makes the shortage worse and encourages property to leave the private long term rental market.
They've stripped all rights and protection from the LL making its a undesirable business for many.

So how on earth is it good idea for elderly people in care should be LLs or the Govt should manage it for them.
Ever try to get a local authority help as LL? Good luck with that.

So then sell it. Consider then how long it takes the legal process to sort out the mess when people go into care and leave property, even if they die it takes forever.
So who will manage the property in the meanwhile. Who pays to up grade it to a required standard etc.

Its a minefield.

 

[Brendan Burgess]

The problem with that is the Govt has consistently shown itself unable to manage the private rental market. (or housing). Either deliberately or not.

Its a minefield.

Fully agree with both of these, but they are not arguments for not doing this.

Sure the governments and society have messed up housing. They have made it very difficult for landlords to operate. But that does not mean that empty houses should be made available to rent if we are paying the costs of the accommodation of the owners of those properties. It means that we should make it easier to rent properties and easier to get rid of tenants.

It is a minefield. But again, we should not be afraid to tackle difficult problems. One of the arguments used against this proposal is that some of the houses would be difficult to let. Maybe so, but most would be easy to let. And the legislation should be changed to make properties easier to let.

Brendan