Some qualifying social welfare recipients will be able to earn €14,000 more a year without a reduction in their state payments thanks to a recent extension to the ‘rent a room’ relief scheme.
The move was welcomed by Denis Naughten TD who described the move as “much-needed” for families trying to make ends meet in the midst of a cost of living crisis.
For the next two years a person who wants to rent the spare room in their home to someone - who is not an employee, or an immediate family member - will have up to €14,000 of rental income disregarded in the assessment of means to qualify for weekly social assistance payments, increases for qualified adults, the Working Family Payment and Supplementary Allowance.
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This will be of particular benefit to older people who can now receive €269.23 in weekly rent for a room - which equated to €14,000 per year - without it impacting their Non-Contributory State pension or the spouse or adult dependent of a contributory pensioner.
Speaking about these changes, Mr. Naughten said on Tuesday: “It could also provide much-needed additional income to families trying to cope with the increase in the cost of living if they have a spare room.
“Up to now the rent-a-room scheme allowed a taxpayer to earn up to €14,000 per year tax-free if they rented out a room in their home to private tenants, but those on a means-tested social welfare payment had that rent deducted from their payment.
“This effectively meant that any person in receipt of a means-tested social welfare payment was renting out their spare room for free while a taxpayer could earn €14,000 tax-free, which made no sense in the middle of a housing emergency,” he said.
The rent relief for welfare recipients has initially been introduced for a two-year period up to March 2025, and it is hoped it will not only provide vital housing accommodation but may also be of benefit to the older person by providing companionship.
“Having another person in the spare room also provides an overnight presence in the home for security and peace of mind for an older person, and I hope that community groups, active retirement groups, and not-for-profit organisations can now embrace this new incentive by assisting older people in selecting a suitable tenant,” concluded Denis Naughten.
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