Calculating Mortgage Interest Supplement
From 1 January 2014, the Mortgage Interest Supplement scheme is closed to new entrants and no new applications will be accepted from this date. This measure does not affect current claimants immediately (people who were getting Mortgage Interest Supplement before 1 January 2014). The scheme will be wound down for existing claimants over a 4-year period.
Before you start to calculate your Mortgage Interest Supplement you must check whether you qualify. More information on the qualifying criteria is available in our document on Mortgage Interest Supplement.
You will only get help with the interest portion of your mortgage repayments. You will not get help with the portion that pays off the actual loan and house insurance. Your interest is assessed as your gross monthly interest less any mortgage interest relief and any mortgage allowance or mortgage subsidy payable towards the interest part of your mortgage by the local authority.
Calculating Mortgage Interest Supplement is very complex. The Department of Social Protection's representative (formerly known as the Community Welfare Officer) will calculate your entitlement to Mortgage Interest Supplement. If you have any questions about your entitlement to Mortgage Interest Supplement you should contact your local DSP representative.
This document shows you the steps involved in calculating Mortgage Interest Supplement. There are 5 steps:
- Step 1 is to find your weekly household income.
- Steps 2 and 3 are to find out your weekly assessable income. Only a certain amount of your weekly household income is taken into account. Your assessable income is the amount of household income which is taken into account when calculating your Mortgage Interest Supplement.
- Step 4 is to find your total monthly contribution to mortgage interest by adding your weekly assessable income and the minimum Household Contribution.
- Step 5 is to find your Mortgage Interest Supplement by subtracting your total monthly contribution to your mortgage interest from the monthly mortgage interest due to your lender.
Step 1: Find weekly household income
Find your total weekly household income. For example:
Income source Amount per week
Assessable income from part-time employment - see Note 1
Social welfare payments
FÁS training allowance
Family Income Supplement
Cash income (for example, maintenance)
Capital (for example, property, savings and investments) - see Note 2
Assessable income from part-time employment is gross income less PRSI and reasonable travel expenses.
How your travel expenses are assessed can depend on where you live.
The capital value of property (except your own home), investments and savings will be assessed on a weekly basis as follows:
First €5,000 is not taken into account
Next €10,000 is assessed at €1 per €1,000
Next €25,000 is assessed at €2 per €1,000
Any capital over €40,000 is assessed at €4 per €1,000.
Step 2: Subtract income disregards
Subtract any income not taken into account in the assessment for Mortgage Interest Supplement. Income not taken into account is also known as an income disregard.
Main income disregards
The following items are not taken into account as income for calculating Mortgage Interest Supplement:
- Child Benefit
- Mobility Allowance
- Foster care payments from the Health Service Executive (HSE)
- Payments for accommodating children under the Child Care Act
- Income from Gaeltacht students
- Grants or allowances from schemes promoting the welfare of blind people
- Money received from charitable organisations, for example, St Vincent de Paul
- Compensation awarded by the Compensation Tribunal in respect of Hepatitis C contracted from certain blood products, to those who have disabilities caused by Thalidomide and to those receiving compensation under the Residential Institutions Redress Board
- Maintenance grants paid by VEC or Local Authorities for educational purposes
- Domiciliary Care Allowance
- Respite Care Grant
- Guardian's Payment (Contributory) and Guardian's Payment (Non-Contributory)
- Pensioners: If you are aged 65 or over (or where one of a couple is of pensionable age) and have a combined household income greater than the rate of SWA appropriate to your household circumstances, the difference between the maximum rate of State Pension (Contributory) appropriate to your circumstance and the rate of SWA appropriate to your circumstances is not taken into account.
- Carers' payments: The half-rate Carer's Allowance is never taken into account.
- If you are getting Carer's Allowance, the amount of Carer's Allowance above the appropriate SWA rate for your situation (either the adult dependent rate for a couple or the personal rate of SWA) is not taken into account. So if you are one of a couple and getting Carer's Allowance the amount of Carer's Allowance being paid less the SWA adult dependent rate is not taken into account and if you are single or a lone parent the amount disregarded is the rate of Carer's Allowance being paid less the personal rate of SWA.
- Any amount of Carer's Benefit in excess of the basic SWA rate for your situation (either the adult dependent rate or the personal rate of SWA) is not taken into account.
Income from working as a home help with the HSE used to be disregarded for all social assistance payments but from January 2012 this income is taken into account.
Additional Household Income Disregard
If you are working or getting maintenance or have additional household income* you should apply the Additional Household Income Disregard.
Additional Household Income Disregard is a certain amount of your household income above the SWA rate which is not taken into account. €75 of any additional household income is not taken into account. Also, 25% of your additional household income over €75 is not taken into account. There is no upper limit on the amount that can be disregarded – see Note 3.
*Additional household income includes income from the following:
- Part-time employment or part-time self employment
- Any employment or training scheme, for example, Community Employment, Back to Work Allowance, Back to Work Enterprise Allowance or FÁS course.
- Family Income Supplement
- Maintenance payments over €95.23
To calculate the Additional Household Income Disregard:
Additional household income
Less Supplementary Welfare Allowance rate – see Step 3 below
Less 25% of any income you have after you have subtracted €75
Income (less SWA rate ) €200
Get 25% of total: €125 ÷ 4 = €31.25
Add both disregards: €75 + €31.25 = €106.25
Household Income Disregard = €106.25
Note 3: Rehabilitative Earnings Disregard
If you are working and getting Disability Allowance or Blind Pension you can either use the Rehabilitative Earnings Disregard or the Additional Household Income Disregard (but not both). Use whichever is in your interest.
Rehabilitative Earnings Disregard is a certain amount of your income from rehabilitative work which is not taken into account. €120 from rehabilitative training or employment is not taken into account. In the assessment for contribution to Mortgage Interest Supplement all earnings over €120 from rehabilitative training or employment are taken into account and will affect your Mortgage Interest Supplement.
Step 3: Deduct Supplementary Welfare Allowance rate
Subtract the basic Supplementary Welfare Allowance (SWA) weekly rate for your household from the weekly household income after disregards that you calculated in Step 2, unless you have applied the Additional Household Income Disregard. If you applied the Additional Household Income Disregard in Step 2 you will have already deducted the appropriate SWA rate for your household.
If you are 26 years of age or over, the basic weekly SWA rate in 2014 is:
People under 26 years of age get a reduced age related rate of Supplementary Welfare Allowance. However, there are exceptions and some people under 26 may get a higher basic SWA rate. More information on the SWA rate for people under 26 can be found in our document on Supplementary Welfare Allowance.
You should now have calculated your weekly assessable income.
Step 4: Find your monthly contribution to mortgage interest
Find the total amount you must pay towards your mortgage interest.
To do this, add your weekly assessable income (this is the total figure from Step 3) and your minimum Household Contribution (either €30 or €40 per week – see Note 5).
Then multiply this figure by 52 and divide by 12 to get your monthly contribution to mortgage interest
Weekly assessable income €
Add Household Contribution €____
Total weekly contribution to mortgage interest €
Monthly contribution to mortgage interest €
Note 5: Further information about the Household Contribution
You must contribute at least €30 towards your mortgage interest. Couples pay €40.
Non-dependent household members who are solely dependent on a personal social welfare payment must also contribute at least €30. However, if benefit and privilege has been assessed against your social welfare payment you will not have to contribute €30.
The Department of Social Protection's representative (formerly known as the Community Welfare Officer) can reduce the amount of Mortgage Interest Supplement payable by an amount which in their opinion should be payable by each non-dependent household member in employment. Custom and practice is that the assessable income of the non-dependent household member (that is, gross income less PRSI and travel costs to work) is divided by the appropriate rate of SWA for their situation which is then multiplied by €30 to establish their liability to contribute.
Your 26 year old daughter is living with you and earning €700 per week:
€700 ÷ €186 (SWA) = €3.76
Multiply 3.76 by €30 = €112.80
Mortgage Interest Supplement is reduced by €112.80
A couple over 65 with an income equal or less than the State Pension (Contributory) for their situation will contribute €40 towards their mortgage interest. A couple who both have State Pensions (Contributory) and no other income will also contribute €40 towards their mortgage interest.
Step 5: Find your Mortgage Interest Supplement
To calculate your Mortgage Interest Supplement you subtract your monthly
contribution from the mortgage interest due to your lender.
Monthly mortgage interest due to lender €
Less your monthly contribution to mortgage interest - €_____
Total Mortgage Interest Supplement €
Note: The Mortgage Interest Supplement payable to you is the difference between your actual mortgage interest and your contribution to mortgage interest, as long as the difference between the two is a reasonable amount to meet your residential needs. Your local officer may use the maximum rent limits set out for Rent Supplement as a guide to decide what is a reasonable amount.