Is the State paying too much in Rent Supplement?

[csirl]

Another thread on this forum posted link to the current Rent Suppliment rates:

http://www.welfare.ie/EN/Schemes/SupplementaryWelfareAllowance/Pages/RentSupplement.aspx


It appears that a single parent or couple with 3 children get €1,100 per month. A quick search on Daft shows that this will allow them to rent the following accommodation:

A large 3 bed, 3 bathroom house on Clontarf:
http://www.daft.ie/searchrental.daft?id=1090285

Large semi in Whitehall
http://www.daft.ie/searchrental.daft?id=1077288

Lucan Semi-D
http://www.daft.ie/searchrental.daft?id=1042346

Recent build 4-bed in Castleknock
http://www.daft.ie/searchrental.daft?id=1094885

4 bed in Knocklyon
http://www.daft.ie/searchrental.daft?id=1081939

So why is the Government paying for rent suppliment people to live in spacious houses in middle income areas when suitable houses are easily available in the greater Dublin area at much lower rate? This is a total waste of money and a big disincentive for people to work. Many working people cannot afford to live in the areas above and have been forced into more reasonably priced accommodation. Why cant the unemployed live in appropriately priced accommodation at €300-€400 per month less than they are currently paying e.g.

Mullhuddart 3-bed - €700pm
http://www.daft.ie/searchrental.daft?id=968493

Clondalkin 3-bed €700pm
http://www.daft.ie/searchrental.daft?id=1065547

Saggart 3-bed €700pm
http://www.daft.ie/searchrental.daft?id=1027904

Rush 3-bed semi €800pm
http://www.daft.ie/searchrental.daft?id=1095437

 

[Alwyn]

Good thread.

Was it a system set up to keep our previous Governing elite, who had property interests with a guaranted income?

Where I am living I am one of a few people left who pay a mortgage. Most are people in receipt of rent supplement. Its a completely crazy system.

What bothers me is the amount of people who complain about people who are genuinely struggeling to pay their mortgage, yet they don't have anything to say about the drain on the economy that this running tap of rent supplement seems to have on the system.

I'm starting to think work is only for fools.

 

[Knuttell]

yet they don't have anything to say about the drain on the economy that this running tap of rent supplement seems to have on the system.

The price the State pays Landlords to house S/W tenants also allows the state to pass on big item costs it would have to carry if it were to act as their Landlord.

It no longer has to provide 24 hour maintenance,insurance,chasing after or collecting rents,replacing and repairing plumbing electrics,washing machines etc....this responsibility is passed onto the Landlord,meaning a big saving for the State...

but this is not often apparent or indeed commented on when people speak about rent allowance and private Landlords.

 

[DerKaiser]

The price the State pays Landlords to house S/W tenants also allows the state to pass on big item costs it would have to carry if it were to act as their Landlord.

It no longer has to provide 24 hour maintenance,insurance,chasing after or collecting rents,replacing and repairing plumbing electrics,washing machines etc....this responsibility is passed onto the Landlord,meaning a big saving for the State...

but this is not often apparent or indeed commented on when people speak about rent allowance and private Landlords.

That's not the point here. The point is that there are plenty of private landlords willing to accept an awful lot less than what the state pays. Cut allowances 30% and see if we have a problem finding private rented accommodation for SW recipients.

 

[Hillsalt]

The price the State pays Landlords to house S/W tenants also allows the state to pass on big item costs it would have to carry if it were to act as their Landlord.

It no longer has to provide 24 hour maintenance,insurance,chasing after or collecting rents,replacing and repairing plumbing electrics,washing machines etc....this responsibility is passed onto the Landlord,meaning a big saving for the State...

but this is not often apparent or indeed commented on when people speak about rent allowance and private Landlords.

Very valid point. I have never heard that argument put forward before.

 

[Knuttell]

That's not the point here.

Please take the time to read posts before jumping in feet first,I was replying to the tired cliche that rent allowance paid by the State to private Landlords is not without considerable benefit to the State

 

[Sunny]

Please take the time to read posts before jumping in feet first,I was replying to the tired cliche that rent allowance paid by the State to private Landlords is not without considerable benefit to the State

Again that it is not the point of the thread so you should probably take the time to read posts. No-one is suggesting that they remove the supplement. I agree that rent supplement should be cut. People may not be able to live where they want to live but that's the same for all of us. Of course, there are dangers and problems with this but it is worth examining.

 

[horusd]

The price the State pays Landlords to house S/W tenants also allows the state to pass on big item costs it would have to carry if it were to act as their Landlord.

It no longer has to provide 24 hour maintenance,insurance,chasing after or collecting rents,replacing and repairing plumbing electrics,washing machines etc....this responsibility is passed onto the Landlord,meaning a big saving for the State...

but this is not often apparent or indeed commented on when people speak about rent allowance and private Landlords.

I simply don't get the logic of this. Who pays the rent is irrelevant in a capitalist system. The private landlords are capitalists, so they should have no problem with this concept.They are free to rent to whoever they like.

The state (i.e. us) should pay the going market rate for a service provided, regardless of any other factors and considerations. The state (i.e. us) isn't some cash cow for private landlords to defray costs they would in any event incur in any other private arrangement for the same amount of money. What the state "saves" by doing this is none of the landlords business.

 

[csirl]

The price the State pays Landlords to house S/W tenants also allows the state to pass on big item costs it would have to carry if it were to act as their Landlord.

It no longer has to provide 24 hour maintenance,insurance,chasing after or collecting rents,replacing and repairing plumbing electrics,washing machines etc....this responsibility is passed onto the Landlord,meaning a big saving for the State...

but this is not often apparent or indeed commented on when people speak about rent allowance and private Landlords.

All the examples I gave in my original post were houses owned by private landlords and so all benefit from the items you identified. This thread isnt about whether or not the unemployed should be housed in private or publicly owned accommodation and the economic benefits of private v public. This thread is about the fact that the money paid is well in excess of the going rate for appropriate accommodation to the extent that unemployed people can afford to rent much superior accommodation than many working people.

 

[micmclo]

rent supplement = landlord's dole

But it should be cut, the working person on low wages competes with the rent allowance tenant for the bedsit or room in a house.
The working couple compete with the family on the rent allowance for the nice apartment

Cut the rate to the market rate, it's over nine hundred a month in RA for a small family in Dublin, you'd easily get a two bed under this in the city, the rate is just too high and propping up rents

 

[DerKaiser]

Please take the time to read posts before jumping in feet first,I was replying to the tired cliche that rent allowance paid by the State to private Landlords is not without considerable benefit to the State

I read it very carefully and I agree with your point that it is no bad thing for the government to outsource to private landlords (if regulated properly).

That, however, is a tangent to the argument put forward that the state, rather than leveraging its unique bargaining power in the private rental market, is paying significantly over the odds in many instances.

 

[Firefly]

If the flow of money was the other way (ie from the private sector to the state) and cuts were proposed, we would have all the usual suspects on here bleating about the reduced spending in the economy as a result.

That aside, I think that housing provided either free or heavily subsidised to someone by the state should just be "adequate". By adequate I mean that it is cheap and cheerful and if you want something better then you should have to work to achieve it. As I've said before, anyone who is physically / mentally unable (ie not those "on the sick") to work should be given very nice accomodation.

Certainly, the government rentals should not affect the real market where working people are being forced to pay more for rent as a result. This is just another reason why so many are disillusioned with working right now.

 

[Sunny]

If the flow of money was the other way (ie from the private sector to the state) and cuts were proposed, we would have all the usual suspects on here bleating about the reduced spending in the economy as a result.

I don't really understand this point.

 

[Alwyn]

Here's an interesting example.

We are having mortgage difficulties. Scraping by each day. We meet with our mortgage provider, they put me us on interest only payments and tell us to rent some rooms in the house.

We get a handful of calls; nobody seemed interested but it was a learning exercise in itself.

One woman that came to view called us back a few days later saying that it was not really in her interest; as she could get a similar house all to herself and paid for.

Yet the bank tell us we didn't try hard enough.

On another note, we we had a guy looking to rent a room out for a couple of months; "his bird was renting close by" and he didn't want "nosy neighbours" reporting her for having him "living with her" but he had plans on moving in with her when the "spotlight was off her"!

Some, by know means all, are running rings around the system and here's me afraid to tell my bank that I will be unemployed in the coming weeks

 

[Shawady]

Is rent supplement given to the tennant or the landlord?

Is the landlord given a cheque for say €900 and if this does not cover the rent the tennant has to make the difference.

 

[Firefly]

I don't really understand this point.

Hi Sunny,
It is an off-point comment. If cuts to social welfare were proposed, for example, it would be argued that this would result in less money being spent in the economy. Therefore it could be argued that reducing the amount of money paid to landlord would result in less money being spent in the economy by them. Don't get me wrong..I think landlords should be paid the market rate for rentals by the state.

 

[Sunny]

I think the argument is that the rental supplement should be based on rental costs in the cheaper parts of Dublin. Why pay someone €1,100 a month for a three bed house when there is a three bed house in another part of Dublin for €800? As far I know, the rent limits are set by County but rents vary greatly across Dublin. (Open to correction)

However, like everything there are things other than cost that have to be considered.

 

[Sunny]

Hi Sunny,
It is an off-point comment. If cuts to social welfare were proposed, for example, it would be argued that this would result in less money being spent in the economy. Therefore it could be argued that reducing the amount of money paid to landlord would result in less money being spent in the economy by them. Don't get me wrong..I think landlords should be paid the market rate for rentals by the state.

Oh right thanks. See what you mean now.

 

[DerKaiser]

Well the point really hits home when you have three people renting a house and the rent supplement person is in a double room whilst someone struggling by on low paid work is in a single one.

 

[horusd]

It would surely be in the gov't's interest to off-load the management of rent supplement to an (private?) agency tasked with finding the cheapest rents. They could be incentivized to do this, and it provide income to rental agencies as well as saving the state money.