# Reasonable living expenses



## robe (20 Feb 2014)

Is it not a bit crazy that the banks are using a loop hole in the RLE that once a chilld reaches the age of 18 the parents can no longer reasonabley put in the expense of that child.... so even if your kids are still in secondary school or college the banks are saying that there is no cost involved !!!


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## DebtCert (20 Feb 2014)

Which bank or banks?


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## Jim Stafford (21 Feb 2014)

We are finding that banks are being very fair and equitable about the interpretation of the RLE guidelines. (Some banks will allow an additional 25% above the guidelines.)

 if borrowers have children living away in order to attend college/university, then all of those costs (tuition fees, accommodation, travel) are allowed under the heading of Special Circumstances,

 Private school fees are not allowed under the RLE, on the basis that a local state school would do.  However, there is a recognition that not every town has a college/university, and therefore such expenses are allowed.

 Jim Stafford


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## robe (21 Feb 2014)

Hi Jim , I wonder if you are right. An informal response from PTSB has asked that the RLE decrease by 419 as each child reaches 18. ,and they want this written into the PIA. Can special circumstances come into play here? I would of thought this would of been a very standard expense.


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## Jim Stafford (24 Feb 2014)

"Special Circumstances" come into play where the child is still a  dependent.

 If the debtor is doing a 6 year PIA, then the PIP will carry out an annual assessment of what monies the debtor can afford to pay.

 Jim Stafford


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## robe (25 Feb 2014)

Thanks JIm
R


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## BrokeGuy (26 Feb 2014)

Anyone know what happens with maintenance? I pay €310 per month for a child who spends 50% of his time with me... where does that fit in with the RLE?


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## robe (11 Mar 2014)

Hi Jim is their anyway that the bank can refuse the RLE for a dependant child once they reach 18, ie. will they consider an 18 year old an adult and therefore not the parents responsibility? PTSB's response was very adamant that once each child reaches 18 they want the RLE reduced.


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## robe (13 Mar 2014)

Looks as if ptsb will not budge, on my kids 18th birthday I'll have to kick them out!!

Debt deals could cause difficulties for adult children who hope to go to college. 
LOUISE MCBRIDE – PUBLISHED 02 MARCH 2014 02:30 AM

PARENTS who sign up to the new state-backed debt deals could scupper their children's chances of going to college.





Under the deals, which are struck through the Insolvency Service of Ireland (ISI), debtors must meet stringent spending guidelines, known as "reasonable living expenses" Although an allowance for living expenses can be made for a borrower's children, it can be harder to secure such an allowance once a child passes the age of 18.

One adviser contacted us about a debt deal he was striking on behalf of two parents. "The bank will not allow any allowance for living expenses for the borrowers' children once they hit 18 years of age," said the adviser, who did not wish to be named. "In this case, two of the kids will turn 18 during the lifetime of their parents' debt deal. The borrowers are now looking at bankruptcy as the only way to protect their ability to continue to support their kids once they turn 18 – including provisions for third-level education."

The ISI's guidelines allow for "special circumstances" to be taken into account when drawing up debt deals "where the debtor is contributing financially to the care of an adult dependent such as, for example, an elderly relative or a college-going child."

"The costs of that child going to college would have to be reasonable but, subject to that qualification, they are permissible," said a spokesman for the ISI.

Banks must agree to any debt deal put forward by a debt adviser on behalf of a borrower – if that arrangement is to go ahead.

The Sunday Independent asked the banks if they made any allowance for living expenses for a borrower's children once the children reach the age of 18. Most banks said it was up to the debt adviser to make a case for allowances for such children – and that this case would then be considered by the bank.

"Any request for continuation of living expenses beyond the age of 18 would likely be considered on a case-by-case basis by creditors," said a spokeswoman for Bank of Ireland.

A spokesman for Permanent TSB said: "Permanent TSB reviews every case on its own merit and does not have a blanket policy. The issue is one for the ISI guidelines, not for the individual banks."

AIB said it makes allowances for dependants.

Ulster Bank said it aims "to come to a reasonable arrangement with any customer who approaches us. Expenditure is adjusted for childcare to reflect age," said a spokesman for the bank. "There can be an allowance for adults living in the house with special circumstances."

A spokesman for KBC said it reviews each case on its own merits "taking account of financial and other circumstances and the ISI reasonable living expenses."


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## fraggle (14 Mar 2014)

I assume there are plenty of parents in the country, who are not in debt, who cannot afford to send their child to college?

Why should those who are in debt be treated as a special case and have their debt decrease so they can do so?

Personally I think college fees should not be included, as nice as that might be.
However, I think perhaps any child over 18 still living at home should still receive some amount, perhaps reduced. I guess it might be seen a dole supplement by some though?


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## Matthew Moore (14 Mar 2014)

robe said:


> _
> Debt deals could cause difficulties for adult children who hope to go to college.
> LOUISE MCBRIDE – PUBLISHED 02 MARCH 2014 02:30 AM
> PARENTS who sign up to the new state-backed debt deals could scupper their children's chances of going to college._
> ...



Seems like a bit of sensationalist article considering none of the banks quoted said they would rule out allowing college expenses.

Anyway, in the unlikely event they did refuse to allow the reasonable college costs then they are probably forcing the debtor into bankruptcy and the OA would allow the college expenses then. 

If i was paying a PIP/Adviser and he wasn't able to swing the deal I'd be looking elsewhere for help. Surely the bank would recoup more in the PIA than bankruptcy considering it's twice as long and less costly.


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## so-crates (14 Mar 2014)

robe said:


> Looks as if ptsb will not budge, on my kids 18th birthday I'll have to kick them out!!
> 
> Debt deals could cause difficulties for adult children who hope to go to college.
> LOUISE MCBRIDE – PUBLISHED 02 MARCH 2014 02:30 AM
> ...


Playing devil's advocate here...

Why would you have to kick your child out? Surely an option could be they get a job and earn an income to (at least help) support themselves while still living at home? Perhaps part of that income could go towards their own savings towards college?

We are a little fixated on the notion of going straight to college from school. In fact in many cases people would be better off spending at least a year or two working and perhaps assessing what college course they would like to pursue outside of the hothouse of Leaving Cert. There would be difficulties settling back into a studying routine but as there are challenges settling into college anyway they shouldn't decide beforehand that it is so impossible to go back to studying, and given the example of "mature" students - it is entirely feasible for people to do so.


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## Matthew Moore (14 Mar 2014)

fraggle said:


> I assume there are plenty of parents in the country, who are not in debt, who cannot afford to send their child to college?
> 
> Why should those who are in debt be treated as a special case and have their debt decrease so they can do so?
> 
> ...



Why would you assume there's plenty of people who can't afford to have kids in college? Is sending a kid to college really that expensive? 
Everybody is entitled to free fee's once and the registration fee will be covered by a grant if your income is below pretty generous allowances. There's even funds for students facing difficulties. Loads of details here: 

I'd imagine the main cost is feeding, clothing, transport and a bit of pocket money. They could always get a part time job that would cover these things above if funds were so tight that the parents couldn't help.


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## robe (14 Mar 2014)

A lot of children will turn 18 during their final year of secondary school. .....It might be a bit much to expect them to get a job. 
The main point here is that going the insolvency route should be more attractive than becoming bankrupt. 
But the banks by applying the letter of the law( ISI guidelines) are pushing parents of soon to be 18 year olds into bankruptcy.


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## DebtCert (28 Jul 2014)

They won't fare any better in bankruptcy though since the OA applies the same guidelines.


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## Gerry Canning (29 Jul 2014)

Pat2; 

Quote{is sending child to college that expensive}

Food 50, rent 60, transport 20 , incidentals 20.
Easily 150 per week from a parents after tax income per child.
Ball park it then  @ 8,000 income cost per child.

So if you earn k45 with 2 @ college , means your (real) income drops to underk30.
So-crates; 
Inclined to agree on the fixation on 3rd level.Seems to me everyone now have degrees in any and everything, not sure they are really valuable versus going straight into work?


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## Matthew Moore (29 Jul 2014)

Gerry Canning said:


> Pat2;
> 
> Quote{is sending child to college that expensive}
> 
> ...



It's very possible you'd be feeding and housing them anyway regardless of whether they are in college. If I was in a position as outlined in your post I would be encouraging the kid to look for a part time job, if they're old enough to go to college then they're old enough to contribute. Even 10 hours at minimum wage would make a huge difference.

With regards to whether a 3rd level education is worth it, I have 1st hand experience. Left school at 15, long story short 15 years later I'm bankrupt and about to go to college for a 4 year degree. Despite having nearly 10 yeras experience owning and managing (albeit ultimately failing) a business with large turnover and many employees, I had much difficulty finding suitable decent paying work when I wrapped up my business. The feedback I continually got was that my lack of formal education was a huge hindrance. Big companies in paticular are reluctant to hire people like me without a degree, nevermind not even having a degree. 
A degree, and the marks you achieve will show that you have commitment and an ability to learn. 
The days of starting at the bottom of a company and working your way up are more or less gone. I've probably 40 years left before I'm at a pensionable age so I can guarantee by that stage there will be very little work left for the unskilled.


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## BrokeGuy (8 Aug 2014)

Yes we are dealing with AIB on a forced sale which is like an informal PIA and they are allowing the reasonable living expenses plus 20%


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