Social welfare legislation provides that for social assistance schemes all income and capital (such as savings, investments and property other than the family home) belonging to the claimant and his or her spouse/partner, where applicable, are assessable for means assessment purposes.
Where an individual is renting part of his or her family home, the cash value of the rental income is assessed. However, such rental income is reduced by a range of deductions. These include:
i. a proportion of any mortgage interest paid by the claimant on the part of the property rented;
ii. a 15% deduction for voids (i.e. periods when the accommodation is vacant between lettings); and,
iii. if the rooms let are furnished, a 5% deduction for wear and tear.
In this regard, the cash value of any rental income is not assessed in full, as at least 20% of such income may be disregarded.
Fully disregarding all rental income would run contrary to the policy of ensuring that social welfare expenditure is targeted to those who need it the most. It could also potentially negatively impact on the incentive to work for working age recipients. It should be noted that in the case of the State Pension (Non-Contributory) and Widow's/Widower's or Surviving Civil Partner's Pension (Non-Contributory), social welfare legislation provides that no assessment is made of any money received in respect of rent from a person who lives with the pensioner where, but for that person, the pensioner would be living alone.
Any change to my Department’s means assessment policies would have to be considered in the overall policy and budgetary context.
