When you rent out a room in your home in Ireland, you can qualify for the rent-a-room relief scheme. This scheme allows you to rent out a room in your primary residence, tax free, up to €14,000 a year in rental income. To learn more about what this scheme is and how it works you can read this blog post here. 

In today’s blog, we wanted to address a specific question we often get asked in relation to renting out your spare room, tax free. That question is: does the rent-a-room relief scheme impact any allowances or payments you are already receiving from the government. Let’s dive in.

Can You Rent Out Your Room Without Losing Your State Allowance?

The short answer is yes! But let’s look at the most common types of allowance individually and see how renting out your spare room may impact them. 

1. Means Tested Weekly Social Assistance Payment
If you are receiving a weekly means tested social assistance payment, for example, the social welfare payment or jobseekers allowance, and you wish to rent out your spare room and still avail of the rent-a-room relief scheme, you can now do so without it impacting your payment, provided you are earning under the 14k in rent per year. This measure was brought into effect in May of 2022. 

2. Supplementary Welfare Allowance
If you are in receipt of supplementary welfare allowance, which is a weekly allowance paid to people who don’t have enough income to meet their needs or the needs of their family, you are also entitled to avail of the rent-a-room relief scheme, and can do so without it impacting this allowance, again, provided you are earning under the 14k in rent per year. 

3. Working Family Payment
Previously called the Family Income Supplement, the working Family Payment is a weekly tax free payment for employees with children who are on low pay. If you are receiving a working family payment and wish to rent out a room in your home and avail of the rent-a-room relief scheme, you can do so without it impacting your payment, provided you are earning under the 14k in rent per year. 

4. Medical Card Holders
Medical cards are for those who live in or intend to live in Ireland for at least one year and whose income is below a certain figure in relation to the size of your family, which is determined by the HSE. 
If you do hold a medical card, renting out your spare room under the rent-a-room relief scheme won’t impact that either, you are entitled to earn income under the scheme like everyone else without it changing the status of your medical card. You can read more about that here.

5. Social Housing
As of May 2022 if you live in social housing you are now also allowed to rent out your spare room under the rent-a-room relief scheme and earn up to €14k per year, tax free. You can read more about that in this article here. 

6. Household Benefits Package
The Household Benefits Package is an allowance that is applied per household and helps with the costs of running the household. If you are receiving a household benefits package payment you can also benefit from the rent-a-room relief scheme, without it impacting your payment, once you earn under the allowed 14k in rent.

7. Fuel Allowance
If you receive a fuel allowance payment and you wish to rent out your room and avail of the rent-a-room relief scheme, you can do so without it impacting your payment, provided you are earning under the 14k in rent per year and that the person you are renting the room out to can also qualify for the fuel allowance payment in their own right. 

8. Disability Allowance
If you are in receipt of the Disability allowance, you can also avail of the rent-a-room relief scheme without your allowance being impacted. 

9. Carers Allowance
If you receive a carers allowance and want to rent out a spare room in your home you are also able to do so and avail of the rent-a-room relief scheme without it impacting your allowance. 

10. Non Contributory State Pension
If you are in receipt of a non-contributory state pension you can still rent out a room in your home and enjoy the benefits of the rent-a-room relief scheme. You can earn € 269.23 per week (14k per year) in rent without it impacting your pension. For more information on this click here.
 

11. Mortgage Interest Relief
If you qualify for interest relief on your mortgage, and are renting out your spare room under the rent-a-room relief scheme, your interest relief will not be affected. 

12. Owner Occupier Relief
If you are in receipt of owner occupier relief, and qualify for the rent-a-room relief scheme, your relief payment won’t be impacted. 

13. PRSI & USC
Under the rent-a-room relief scheme your rental income is also exempt from PRSI and USC

14. Capital Gains Tax
Renting under the rent-a-room relief scheme has no impact on your capital gains tax principal primary residence exemptions, should you decide to sell the property at a later date. 

You can find information and further confirmation about the above listed payments on Citizens Information and Revenue. 

In summary

The rent-a-room relief scheme is a great way to earn money from your spare room without it impacting your current payments or income, provided the rent you earn qualifies under the scheme. If you’d like to verify that you do qualify under the scheme, you can read this blog post here.  

We always advise our hosts to verify their own individual situation with Revenue in terms of the payments and allowances they receive. 
The good news is that if you become a Hosting Power Host, the chances are you will qualify for the rent-a-room relief scheme. This is because all our guests stay for a medium rental term (no less than 28 days) and most of our hosts tend to earn under the 14k threshold allowed under the scheme per year.

If you’d like to become a host, you can tap the button below to apply today.