Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

That is correct. The incremental purchase scheme has been introduced as a new purchase option to meet the needs of those requiring long-term housing supports and to assist those households with low incomes to make a start on the route to home ownership whereby the house is sold at a discount price and the purchaser becomes the full owner at the time of sale.

The incremental purchase scheme applies to newly built houses only and does not include apartments and flats. Existing tenants of a local authority, approved housing body or rental accommodation scheme, RAS, who are willing to move to a newly built house and approved housing applicants are eligible. The household means policy will determine income eligibility and affordability. A household must have a gross annual income of not less than €15,000. Income from social welfare, social assistance payments, allowances, pension allowances and other welfare benefits are not assessable income for the purposes of the incremental purchase scheme, except where this is a secondary source of income, for example, where a person receives a social welfare payment in addition to income from employment and-or where the spouse or partner of an employed applicant receives a social welfare payment. Some types of benefit will not be accepted as income. A household which previously bought a house from a local authority is not permitted to buy a house under the incremental purchase scheme.

Discounts to the purchase price are applied under three bands. Band No. 1, household income €15,000 to €19,000, will receive a discount of 60%; band No. 2, household income of €20,000 to €29,999, will receive a discount of 50%; while band No. 3, household income of €30,000 plus, will receive a discount of 40%. I ask the Minister of State to examine the provision for the amount to be saved in order to qualify for the scheme as this seems to vary and it needs to be clarified.

An incremental purchase scheme will also replace the tenant purchase scheme which closed for new applicants at the end of 2012. The new scheme will cover local authority houses, other than newly-built houses, or newly acquired houses and local authority apartments, which are covered by the existing incremental purchase schemes.

I refer to the main elements of the new model scheme. On the sale of the dwelling, the authority places an incremental purchase charge on the dwelling of the proportion of its value equal to the discount to the purchase. The charge withers away in equal annual proportions over the charged period, provide the tenant purchaser complies with the terms and conditions of the sale, notably, the use of the dwelling as the household's normal residence. If the purchaser breaches a condition of the sale during the charge period, the authority may suspend the annual release on its charge for the year concerned, in which case the dwelling's owner much, on the expiry of the charged period, make a payment to the authority to clear the outstanding charge on the property.

If the tenant purchaser wishes to resell the dwelling during the charged period, the housing authority has first option on buying it back at its current market value, less the value of the outstanding incremental purchase charge. Where the authority does not buy back the dwelling, the tenant purchaser must, on the sale of the dwelling during the charge period, pay the authority the value of the outstanding incremental purchase charge on the property, subject to not incurring a net loss on the resale.

Housing assistance payment will facilitate the transfer of responsibility for the provision of rental assistance to persons with long-term housing need from the Department of Social Protection, currently provided through the rent supplement scheme, to housing authorities, including the provision of a mandatory direct deduction facility to recover rent contributions due to the housing authorities from the welfare payment made to housing assistance recipients and local authority tenants.

Following the introduction of the housing assistance payments, rent supplement will continue to be audited by the Department of Social Protection for households in the private rental sector. In the main, such households have lost income through unemployment and require short-term income support to pay their rent. These households will not generally require a social housing assessment and it will be expected that a return to employment will obviate the need for long-term support for such households.

I welcome the provision of an additional €50 million for social housing, of which €20 million will be spent on vacant units, €10 million on capital projects largely directed at alleviating homelessness and €20 million on local authority construction focused on higher needs.

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