Rent supplement problem - Dept of social protection want to set rent amount

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laois1

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An elderly friend has a 3 bed house rented to tenants for about 4 years now. Amount set at 950 pcm.

For the last 2 years they have been on rent supplement plus top up amount to meet the 950 (as they both lost their jobs). Tenants love the house and are happy to do so. Landlord is v happy with tenants.

Problem now is rent supplement department say maximum rent for tenants in their county is 690 per month. They say this MUST be the amount on the lease or else they must seek cheaper accommodation. They are looking for a copy of the lease with this amount stated.

The market rate in the area is approx 900 - 1000 for similar houses.

I got the below from the citizens information website which illustrates the position;
"The amount of Rent Supplement that is calculated will generally ensure that your income, after paying rent, does not fall below a minimum level. This level is the basic Supplementary Welfare Allowance rate for your circumstances (€186 for a single person and €310.80 for a couple) minus €30 (or €35 for a couple). You must always pay at least €30 towards your rent. However, you may pay more depending on your means - see 'Rules' above.

The rent paid to your landlord (that is, your contribution plus your Rent Supplement) must not be above the maximum rent limit set for your county or area. The maximum rent limit for your county is set by the Department of Social Protection (DSP). However, the Community Welfare Office may set lower rates within these limits. There is a maximum rent limit for each area (see below). If your actual rent is higher than the local maximum, you may be refused Rent Supplement entirely "

What can the Landlady do in this position ? She does not want to defraud the system by issuing a false contract with the lesser amount as surely this would be illegal. The tenants are willing to continue to pay the rent at the set amount. Any ideas ? She is not a professional landlord and does not know what to do ?
 
I'm afraid that is the system, the tenants are not meant to be topping up the rent by anymore than the amount specified by DSP. Rent limits were reduced all over the country last year.

DSP point of view is that if these tenants are able to top up the rent by more than the minimum in the scheme then if they were renting somewhere cheaper the amount of rent supplement that needed to be paid to them would be less.

The usual thing that happens here is that the landlady has to drop her rent if she wants to keep these tenants or alternatively they need to look for somewhere else which falls within the guidelines.
 
The other thing to bear in mind is that if she issues a lease for the lower amount, she has nothing legally enforceable to ensure the tenants pay the original amount.

There are those who argue that RS was keeping rents artificially high, but these blanket cuts that don't take into account the condition of the property or the circumstances of tenant/landlord have made things very difficult for a lot of people.
 
Effectively the DSP are trying to set a new lower "market" rent. €690 would not even cover the rent for a 2 bed in this particular area. They are developing a situation where fraud will be the only way around i.e. a false lease agreement or 2 separate lease agreements.

There is no problem with the DSP having some sort of limit but setting it at a rate per county makes no sense as rents differ hugely between estates never mind towns. I also would question whether they should interfere with any top up between a tenant and their landlord.

Surely this is overstepping the mark - if the tenant does not want to pay a top up they dont have to they have the option of finding smaller/cheaper accommodation elsewhere.
 
Yes but if they have sufficient money for a top up then they should have less need of supplement, rent supplement and social welfare in general is only supposed to be just enough to live on, not have surplus, which in effect they have if they can afford a bigger top up.

Not my rules, just explaining the reasoning behind it.
 
Thanks. The reality is that they have been living in this house for several years and do not want the hassle of moving. They have made friends and are settled there. Their child is settled in school with lots of friends etc. They do not want to be paying extra in top ups which they will now if they are to stay. A difficult situation for all involved. Just to add insult the tenant visited the CWO today and was advised to consider moving a over the county border into the Dublin catchment area in order to qualify for a larger amount of rent supplement - thereby costing the taxpayer more. So goes the logic of the DSP !!! Is this a mad country or what ....?
 
It's not so mad. The cap on rent has saved the State a lot of money. Certainly it has inconvenienced people who have had to either negotiate a lower rent with the Landlord or seek alternative accommodation. The CWOs advice was clearly flawed.

Is the Landlady in a position to lower the rent? If not she has no option but to rent to tenants not in reciept of RA.
 
This is simple really.
The dsw are trying to lower the rent.
He LL can either suck it up or stand up.
The tenant is irrelevant here.
 
Options are:

A false lease, with all the problems this can cause, and I do not recommend it, but some landlords do this

Reduce the rent, be glad of the good tenants

Evict tenants and find someone who can pay the current rental
 
Bronte said:
Options are:

A false lease, with all the problems this can cause, and I do not recommend it, but some landlords do this

Reduce the rent, be glad of the good tenants

Evict tenants and find someone who can pay the current rental
Click to expand...
and possibly be prepared for a void period while finding a new tenant + probably cost of redecoration as the current tenant has been there for nearly 4 years.
 
Unfortunately this is another case of the government trying to put the genie back in the bottle.
Some families in my area have had to uproot their families and move to other accommodation because their rent allowance was unilaterally slashed, very sad for the kids losing their friends/schools etc. Surely they could have reduced the cost without ripping up peoples lives. For example ,give the landlord who accepts a reduced rent allowance a more favorable tax rate on rental, The rental market is good now from a Landlords perspective,and Landlords are not taking the hit ,they are just getting new tenants. The whole rent allowance system is on a downward slope, wouldn't like to be waiting on that letter in the post that will turn your world upside down.
 
If the market rent is higher, why should a landlord take a loss by having a social welfare recipient as a tenant. A supermarket does not lower it's prices for SW customers, why should a landlord?

Landlords are running a business and have their expenses to cover.
 
facetious said:
If the market rent is higher, why should a landlord take a loss by having a social welfare recipient as a tenant.
Click to expand...

You might do it because you want to keep a good tenant. But in this thread the rent drop was very significant so unlikely the landlord would go for it. Plus they might need the rent as their income and therefore cannot reduce.
 
Whatever ab out the limits, a 2 parent, 1child family unit is over accommodated in a 3 bed house. I can see it from the taxpayers perspective here. A 2 bed unit should suffice. I understand the arrogance of the DSP here...they thought they could control rents and at least in Dublin we're seeing this is not the case.
 
Some landlords have a lease and then a service contract (mow the lawns, take out the bins etc. for €200 a month ;-) ). I'd love to know the legality of that tactic.
 
lease agreement which sets out management charges

hi,

would a lease agreement which sets out additional charges for parking, refuse, satellite tv etc not solve this problem?
in the residential tenancy act 2004 section 16, it is legal for the tenant to pay any agreed charges or taxes.

thanks,
rusty
 
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