Wednesday, 11 December 2019
Ceisteanna Eile - Other Questions
Tenant Purchase Scheme
45. To ask the Minister for Housing, Planning, and Local Government his plans to change the conditions of the tenant purchase incremental scheme 2016 due to the small take-up of the scheme; and if he will make a statement on the matter. [51115/19]
49. To ask the Minister for Housing, Planning, and Local Government when the promised new tenant purchase scheme will be published and activated; and if he will make a statement on the matter. [51804/19]
The incremental tenant purchase scheme of 2016 is a total failure because a very small number of houses is being purchased. Houses cannot even be purchased when somebody can put the total purchase price down on the table. We have been promised a review of the scheme time and again. When will we have it? We keep getting the same answer, "soon", but it seems there is a new dictionary definition of "soon" that interprets it as "never".
I propose to take Questions Nos. 45, 49 and 91 together.
I thank the Deputy for raising the issue again. We have had quite a lot of discussion on this over the past couple of years. I have been talking to the Deputy’s colleague about it. Other parties are also very interested in this issue. The Housing (Sale of Local Authority Houses) Regulations 2015 provide the basis for the incremental tenant purchase scheme for existing local authority houses.
The scheme is open to eligible tenants, including joint tenants, of local authority houses that are available for sale under the scheme. To be eligible, tenants must meet certain criteria, including having a minimum reckonable income of €15,000 per annum and having been in receipt of social housing support for at least one year.
In line with the commitment given in the Government's Rebuilding Ireland action plan on housing and homelessness, a review of the operation of the first 12 months of the tenant purchase scheme has been finalised and a full report has been prepared setting out findings and recommendations. This has included an examination of the minimum income requirements of the scheme. That is probably the main issue raised here and at all the various council meetings that the Minister and I attend.
What is intended now is that a comprehensive package of social housing reform measures will be brought to the Government in the near future and the review of the tenant purchase scheme will be included in that package, with the report to be published thereafter. Until such time as these reforms are completed, the 2016 scheme will remain open and be utilised. It is quite a generous scheme and suits many people. While one can argue that the numbers might be lower than in previous years, one should realise the scheme is probably more generous than in previous years. It remains open and people are actively utilising it.
The Minister of State says the scheme suits many people. How many houses have been sold to tenants since the inception of the scheme in 2016? Can the Minister of State confirm that there is an income requirement of €15,000? This income is fair enough but there is a quibble clause stating that if most of the income is made up of a social welfare payment, even a permanent one such as a State contributory pension, it is not taken into account, making one ineligible for the scheme. The effectively excludes many tenants on State pensions from availing of the scheme even though they are likely to have saved money over their lifetime and are well able to afford the house.
It is a bit like waiting for the 32 bus in Portmarnock, which I learned recently comes very infrequently. We have been asking for this for a very long time. Could the Minister of State give us more precise information?
Let me add to the point that most income has to come from employment. I know of somebody who is on a social welfare payment but who inherited money from a family member. The individual would be able to pay for the home up front but is not allowed to purchase it. The individual has been living in the home for many years. We need to see reform soon. If the Minister of State cannot bring in the new scheme, could he please modify the old one to allow for social welfare income to be part of the formula?
I have been asking the Minister of State about this regularly. He may remember that we discussed this during the last round of oral questions. He made a commitment to finalise and publish the review by the end of the year. He mentioned in his response that he has finalised it. When will it be published so we can see what the recommendations are? The Minister of State talked about the full social housing review. I suggest taking this piece out and publishing it separately. Unfortunately, we are asking questions in the dark here again. I do not know what the recommendations are. All of us are receiving queries from people who genuinely want to apply for the scheme but we do not know what the new scheme and recommendations involve. When will publication be? Will it be before the end of this year? The Minister of State made a commitment to appear before the housing committee on this matter after publication so the matter can be teased out on a cross-party basis.
Let me deal with the issue of the income. I can confirm that there is an income limit. It has to be €15,000. The minimum reckonable income for the 2016 scheme is determined by the relevant local authority in accordance with the detailed provisions of the Minister's directions, which include the figure of €15,000. In the determination of the minimum reckonable income, local authorities can include income from a number of different sources and classes, such as from employment, private pensions, maintenance payments and certain social welfare payments, including pensions, where the social welfare payment is secondary to employment income.
In determining reckonable income, the income of all tenants of the house, including adult children who are joint tenants, named and paying rent, is included, as is the income of the spouse, civil partner or other partner or cohabitant of a tenant who lives in the house with them, thus ensuring the appropriate level of discount is applied to the purchase price.
A number of income sources, including certain social welfare payments, are disregarded for the purpose of determining reckonable income. The list of income disregards includes child benefit, carer’s allowance, and the family working payment, formerly the family income supplement, as these are deemed not to be long-term in nature. The income sources have to be long-term in nature.
We have had this conversation and we are trying to find ways to accommodate cases such as the one Deputy Jan O'Sullivan and others mentioned in respect of the €15,000.
I am glad the Minister of State clarified that where a couple is on the State contributory pension, or perhaps two State contributory pensions, their other income is regarded as secondary and they are excluded from the scheme, even if they can pay up front.
We need to nail that issue today, because it is one of the most common queries we receive about this scheme. Some people have the money, one way or another, to pay for and buy the house. The logic behind the rule is that if people in that position bought the house they could not afford to maintain it. Can the Minister of State confirm that this is the reason? It is the reason I have been given in writing. Most people would find that quite farcical.
I wish to reiterate Deputy O'Brien's question. It is an issue which I also mentioned. Could this provision be taken out of the major piece of work that is being done? We have been telling people over and over again that this review is coming soon. They come back and ask if we have any news, which we have not. These are people who have been living in their homes for many years and have a reasonable income but unfortunately it is not primarily from work.
I wish to simply ask when the Minister of State will publish the review. There has been no real acrimony about this. We just want to see the recommendations. I think we are entitled to do that. We are fielding questions from our constituents about the social housing review. I am not sure what else is in it. In response to questions I put earlier the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, alluded to other decisions that have been made. Do they form part of this? Will the Government publish this before Christmas? Does it have a date in mind? Once we get it, we can move on and evaluate the merits of these secret recommendations. I do not understand the reticence in publishing these recommendations. The Minister of State said they are finalised. I know the Government has a printer which has not been used for the last year. Surely it could print the report and publish it.
As I said, we will be bringing the social housing package forward in the very near future. After that, there will be discussions around this recommendation. I have discussed it with some of Deputy O'Brien's colleagues and we can discuss it further. We have had conversations about what people wanted from this. The sense we got was that people wanted a way of dealing with that €15,000 income barrier. I will clarify why it is there. It is not a madcap idea. There is a logic to it. The tenant purchase scheme has quite a long history of cases where people could not afford to maintain houses after purchasing them. In order to ensure the sustainability of the scheme, it is essential that an applicant's income is of a long-term and sustainable nature. This is necessary to ensure the tenant purchasing the house is in the financial position, as the owner, to maintain and ensure the property for the duration of the charge period, in compliance with the conditions of the order transferring ownership. A condition of the transfer of the ownership of the house is that for the duration of the incremental purchase charge, which goes on for 20 or 30 years, the tenant purchaser must keep the house in good repair and condition and maintain house insurance on the property. The tenant purchaser is also responsible for the normal changes associated with home ownership. Our research and the history of the scheme showed that this did not always happen without that income barrier. To be fair, the €15,000 minimum might not be the best way to address that because it prevents someone who has won the lottery or benefitted from a settlement of some sort from buying their house. We are trying to find ways to deal with that. That will also form part of the package.
An impression has probably been given that this is the reason people are not buying houses. In one sample year more than 2,400 applications were made under the scheme. Fewer than a quarter were refused because of the eligibility criteria. Those criteria did not affect the other 75%. I must be clear that this is not the main issue. It is an issue in some individual cases, but it is not the main reason people are not using this scheme.