Dáil Éireann Debate, Thursday - 16 July 2020
93. Deputy Éamon Ó Cuív asked the Minister for Housing, Planning and Local Government his plans to increase radically the income limits for eligibility for social housing in view of the fact many persons who will never be able to afford to purchase their own house are over the current income thresholds and are therefore caught in a housing poverty trap; and if he will make a statement on the matter. [16382/20]
View answer95. Deputy Violet-Anne Wynne asked the Minister for Housing, Planning and Local Government his plans to assess the income limits to access local authority housing in view of the fact they have not been reviewed since 2016 and in further view of the rising costs of rents. [16389/20]
View answerI propose to take Questions Nos. 93 and 95 together.
Applications for social housing support are assessed by the relevant local authority, in accordance with the eligibility and need criteria set down in section 20 of the Housing (Miscellaneous Provisions) Act 2009 and the associated Social Housing Assessment Regulations 2011, as amended.
Under the Household Means Policy, which applies in all local authorities, net income for social housing assessment is defined as gross household income less income tax, PRSI, Universal Social Charge and Pension-Related Deductions within the meaning of Financial Emergency Measures in the Public Interest Act 2009. The Policy provides for a range of income disregards, and local authorities also have discretion to decide to disregard income that is temporary, short-term or once-off in nature.
The income bands are expressed in terms of a maximum net income threshold for a single-person household, with an allowance of 5% for each additional adult household member, subject to a maximum allowance under this category of 10%; and 2.5% for each child, subject to a maximum allowance under this category of 10%.
The income bands and the authority area assigned to each band were based on an assessment of the income needed to provide for a household's basic needs, plus a comparative analysis of the local rental cost of housing accommodation across the country. It is important to note that the limits introduced at that time also reflected a blanket increase of €5,000 introduced prior to the new system coming into operation, in order to broaden the base from which social housing tenants are drawn, both promoting sustainable communities and also providing a degree of future-proofing.
Given the cost to the State of providing social housing, it is considered prudent and fair to direct resources to those most in need of social housing support. The current income eligibility requirements generally achieve this, providing for a fair and equitable system of identifying those households facing the greatest challenge in meeting their accommodation needs from their own resources.
However, as part of the broader social housing reform agenda, a review of income eligibility for social housing supports in each local authority area is under way. The review will also have regard to current initiatives being brought forward in terms of affordability and cost rental and will be completed when the impacts of these parallel initiatives have been considered.
There are a number of affordability measures to support people who wish to purchase their own homes. In particular, following a review of the previous two existing local authority home loan schemes, the House Purchase Loan and the Home Choice Loan, a new loan offering, known as the Rebuilding Ireland Home Loan (RIHL), was introduced with effect from 1 February 2018. The loan enables credit worthy first time buyers to access sustainable mortgage lending to purchase new or second-hand properties in a suitable price range.
As with previous local authority house purchase loan finance, the Rebuilding Ireland Home Loan is available to first time buyers only. This is to ensure the effective targeting of limited resources.
My Department publishes information on the overall number and value of (i) local authority loan approvals and (ii) local authority loan drawdowns for the RIHL. Local authority approval means that an official letter of offer has been sent to a borrower (and therefore relates to a specific property and loan amount). Information on the RIHL up to Quarter 4 2019, including in relation to the number and value of mortgage approvals and drawdowns and also average loan amounts, is available on my Department's website at the following link:
http://www.housing.gov.ie/housing/statistics/house-prices-loans-and-profile-borrowers/local-authority-loan-activity.
Furthermore, the availability of the Help To Buy Scheme for first-time-buyers offers additional assistance to purchasers of newly built properties. Up to 5% of the purchase price of properties below €400,000 could be available, which represents a significant contribution towards these deposit requirements. This should alleviate some of the challenges faced by first-time buyers in accessing the 10% deposit of the market value of the property. The initiative has been designed to provide immediate and targeted support for first-time buyers in meeting their deposit requirements and encouraging the construction of new housing units.
