# Pregnant sister refused rent allowance



## gar32 (10 Jul 2009)

Hello all,

My sister and I own an apartment small 1 bed in Dublin city centre. We got 110% mortgage when buying but I have paid off my half already. She lost her job and decided she could not pay her mortgage so moved to get cheaper rent. 

We rent out the apartment which just about covers her mortgage and management fees for the year. (I get nothing which is OK with me).

After she moved and got sorted in her new place in Wexford she went about rent allowance. She was told that she owns a place and should sell it and live on that. If she sold it at today’s prices she would be 20k short of what she has mortgage for. Only having 1 moth before baby comes she got upset and left after 30min of trying to explain this to them. 

She is thinking of moving back into place just to get them to pay mortgage which would be more. Someone please shed some light on this as it just does not make sense. 

Thanking you in advance.

Gar32


----------



## Raskolnikov (10 Jul 2009)

*Re: Pregnant sister refused rent allowance HELP!!*

Mortgage interest supplement is what you're looking for.

http://www.citizensinformation.ie/c...-welfare-schemes/mortgage_interest_supplement


----------



## ml10 (10 Jul 2009)

*Re: Pregnant sister refused rent allowance HELP!!*

she's better off moving into the apartment she owns and get them to pay that, they pay it for 12 months or something.  Bu if she has any money in the bank they take that into account and deduct it from what there given her.  She really should contact Citizens advise to find out exactly were she stands, that way when she goes to the sw she knows what she's entitled to.  Believe me d social don't tend to tell ya what ur entitled to it's only when u know yourself what u should get they discuss it.


----------



## wbbs (10 Jul 2009)

*Re: Pregnant sister refused rent allowance HELP!!*

Family member who has split with partner and moved out of house was told that as long as their name appeared on the mortgage and deeds they would not be entitled to rent allowance.  (full mtg has been transferred to partner in house who can just about pay it) ex partner is unemployed and getting jb.


----------



## gipimann (10 Jul 2009)

*Re: Pregnant sister refused rent allowance HELP!!*

One of the criteria for Rent Supplement is to be in need of accommodation, and to be assessed as such by the local authority.  As your sister owns (or part-owns) accommodation which she can make use of, she cannot meet this criteria so cannot qualify for Rent Supplement.

As another poster said, she can apply for Mortgage Interest Supplement which will be assessed on her income and any savings she may have.


----------



## Complainer (10 Jul 2009)

*Re: Pregnant sister refused rent allowance HELP!!*

Hi Gar

I think it will help people to understand your situation if you can give some hard numbers, i.e. mortgage amount outstanding, estimated value of property, monthly rent? I have a few more questions below.



gar32 said:


> My sister and I own an apartment small 1 bed in Dublin city centre. We got 110% mortgage when buying


Did any Irish bank ever do 110% mortgages? How did this work out? Where did the 10% go? Is it a standard repayment mortgage, or interest-only? For what period?



gar32 said:


> I have paid off my half already.


This could put you in a difficult position, if it ever came to a forced sale. The banks won't see it that 'your half' has been paid off. They just see that half the amount has been paid off. Do you have any kind of written agreement between you about what happens when you sell, or when one wants to buy out the other?



gar32 said:


> We rent out the apartment which just about covers her mortgage and management fees for the year. (I get nothing which is OK with me).


Have you covered off any tax liability within these figures?


gar32 said:


> After she moved and got sorted in her new place in Wexford she went about rent allowance. She was told that she owns a place and should sell it and live on that. If she sold it at today’s prices she would be 20k short of what she has mortgage for. Only having 1 moth before baby comes she got upset and left after 30min of trying to explain this to them.


I can see her concern from a cash-flow point of view. But she needs to look at the full picture. Assuming that this is a standard repayment mortgage, each month's rent is making her richer (i.e. reducing her outstanding mortgage balance). Is it really fair for the state to be expected to pay her rent while she is using her rent to build up her investment?

How much of the €20k gap is down to the fact that ye got a 110% mortgage, and is it really fair to expect the state to pick up the tab for this investment decision?


gar32 said:


> She is thinking of moving back into place just to get them to pay mortgage which would be more. Someone please shed some light on this as it just does not make sense.


Has she explored every other opportunity? Perhaps you could buy out her interest in the property, leaving her with a cash lump sum to cover her rent for while?


----------



## gar32 (10 Jul 2009)

*Re: Pregnant sister refused rent allowance HELP!!*

Ok so Apartment we own has 100k mortgage which is my sisters half. The mortgage is €650 with managment fees €1500 a year. Renting it for €800 a month for 9 more months. She pays €550 rent in wexford for 2 bed and as I said baby on its way next month. Mother lives near so she feels better there. She only gets unemployment weekly money and has no savings totalk about. I do not want her to sign over to me as it is a long term investment for us both. and she has paid into it for 3 years now. We paid 235k for it but its maybe wort 180k asking price maybe less  

What can we do other then her moving back in or signing to me. Selling is last resort.

what do you smarth people think ?


----------



## Complainer (10 Jul 2009)

What's the remaining mortgage term, Gar?


----------



## gar32 (10 Jul 2009)

29 years  we got 33 year mortgage from INBS as my sister used to work there.


----------



## Complainer (10 Jul 2009)

gar32 said:


> INBS as my sister used to work there.


She has my deepest sympathies.


gar32 said:


> Ok so Apartment we own has 100k mortgage which is my sisters half. The mortgage is €650 with managment fees €1500 a year. Renting it for €800 a month for 9 more months. She pays €550 rent in wexford for 2 bed and as I said baby on its way next month. Mother lives near so she feels better there. She only gets unemployment weekly money and has no savings totalk about. I do not want her to sign over to me as it is a long term investment for us both. and she has paid into it for 3 years now. We paid 235k for it but its maybe wort 180k asking price maybe less
> 
> What can we do other then her moving back in or signing to me. Selling is last resort.
> 
> what do you smarth people think ?


I understand that the property is a long-term investment for you both, but I really don't think that's what the welfare system is for. It is not down to the welfare system to help her to keep up her investments. The welfare system to provide the bare minimum to stop her from going hungry, not to support her long term investments.

It looks like the repayment amount is calculated based on the original loan, not the current outstanding amount. Will INBS (or even another lender) allow you to reduce the monthly repayment to reflect the current balance €100k rather than the orginal balance. This could put you in the situation where the property is generating a modest income of maybe €300 a month for her, possibly enough to put a good dent in her Wexford rent for her.


----------



## Swallows (10 Jul 2009)

Hi, I've read the post a few times now and basically what you are asking is how can your sister get help with her rent where she lives now? She is eight months pregnant and needs no hassle at the moment. As far as I can see the best option for her is short term help until the baby is say six months old. Can the family rally round to support her for this period of time saving her all the stress in dealing with Social Welfare etc.

Also maybe there is some chance the father of her unborn child would take some responsibility and help her financially?  As I see it, €3000 would go a long way to taking the heat out of the situation in the short term. She could then move back to her apartment and get help with the mortgage.


----------



## gar32 (11 Jul 2009)

I was thinking the government would be able to do the maths If we sell she would not have a penny. If she stayed there they would end up paying more for mortgage then the rent allowance. The father of the child is around but having a french passport he only gets €100 a week from SW. He was born there but has Algerian Mother and Father. He has been looking for a job for 8 months now like 400,000 other people. Just does not make sense with the maths to me. thats €880 she gets and €400 get a month with €550 rent leave €730 a month or €182 to buy food pay bill etc for 2 people without expense of paying for new born. 

I am luck and have work for 17 years now but I really was thinking the govenment would look after people better. 

Well people thanks for the advice and help we will look after her of course 

Regards


----------



## gipimann (11 Jul 2009)

Just to say that the fact that your sister's chap is getting €100 pw has nothing to do with his being French, as that doesn't make sense.   Assuming he's signing on, he's getting a reduced amount either because he's living with family and is means-tested on their income, or is under 20 and is not entitled to more than €100 pw.


----------



## gar32 (11 Jul 2009)

I don't know all the facts but one fact I know is he does not have money and he lives with my sister so its another reason. but thanks for your input


----------



## Complainer (12 Jul 2009)

Hi Gar

I don't think you're being entirely fair on the Govt. Rent Allowance isn't intended to support those who are investing in property on the side. The rules may not fully cover your sister's situation of being in negative equity, but there you go, we are in interesting times. You can't go blaming the Govt and everyone else for being in negative equity when you took out a 110% mortgage in the first place. You were in negative equity on the day you signed for the property, so don't expect the State to go bailing you out.

In fact, maybe the Govt HAS already done the maths! AFAIK, mortgage interest supplement is not given for an indefinite period, in the way that RA works, so it may well be cheaper for the state in the long term.

Maybe she should just sign over the property to you, as it seems like she hasn't really put much into it, and it is becoming a bit of a millstone round her neck? Anyway, she really shouldn't be making her decisions about where to live based on the welfare options. With a new baby coming, she's going to need family around her. Is moving back home an option for her?


----------



## gar32 (6 Aug 2009)

Just back from Holidays cheap one in Poland 

Seems like my sisters is just about to have baby next week and she is now happy in house if wexford near our mum. As I have paid my 50% off its my sister in the red now. She could cut her losses and we sell the place or continue as is and hope we have someone to rent it on going. Their is so much talk about bottoming out I am not sure what to advise her. That's for all your input clears my mind of the maths issue. Govenment do care about maths thats why we are in thiss mess. just look at what they borrowed now  madness


----------



## Bronte (6 Aug 2009)

How do you mean you paid off your half of the mortgage? The best solution for both you and her is that you take the house and split the difference of the negative equity. The rent is after all covering the mortgage. Or you both sell it. You pay off the remaining mortgage from the proceeds and your sister pays you (over time) for her part of the loss. This is not a long term investment, you both have invested in negative equity.

You do realise that you are liable for the remaining mortgage if your sister defaults? You now have the situation of your sister in a relationship, with a baby due and you co-own a house with her. You need to think about your potential liabilities. 

Gipimann who is an expert in social welfare has not made it clear if your sister would be paid the full mortgage supplement in a situation where you co-own the house.


----------

