Do you get confused when you see a letter with lots of acronyms and have no idea what they mean? You’ve most likely seen the headlines about mortgage sustainability and affordability but don’t quite know where the numbers come from. We’re here to help break down the myths and common terms you may come across. This time, we’re talking about Reasonable Living Expenses or their acronym – RLEs.
What are Reasonable Living Expenses?
Reasonable Living Expenses (RLEs) are guidelines to help ensure that a borrower in mortgage arrears maintains a reasonable living standard while trying to resolve their debt problems.
RLEs cover the borrower’s day-to-day expenses, which are necessary to have a reasonable standard of living. The Insolvency Service of Ireland (ISI) monitors and updates the RLE guidelines annually (required by the Personal Insolvency Act 2012). The ISI considers that, for the purposes of the Act, “a reasonable standard of living is one which meets a person’s physical, psychological and social needs.”
These guidelines cover expenses such as food, clothing, health, household goods and services, communications, socialising, education, transport, household energy, childcare, insurance and allowances for savings and contingencies.
Why are Reasonable Living Expenses used?
RLEs are designed to help protect borrowers by ensuring they have enough money each month to cover expenses without overstretching themselves. This commitment to having essential expenses covered can greatly impact the borrower’s physical and mental well-being. RLEs can help a Personal Insolvency Practitioner (PIP) determine the best possible arrangement for a borrower in home mortgage arrears.
It lets the PIP know what spare income is left over at the end of each month to pay back the borrower’s creditors. This benefits the borrower as they are paying into an arrangement at a rate that matches their means. Borrowers in mortgage arrears can access the services of a PIP for free through the Abhaile scheme through a voucher.
You can find the list of Abhaile PIPs
How are Reasonable Living Expenses determined?
- Household Composition– number of adults and children (if any) living in the house.
- Need for a Motor Vehicle – is a motor vehicle required, or is public transport in the area sufficient? Costs will be reflective of which option the household requires.
- Housing Costs – what is considered reasonable and sustainable accommodation for the household composition? What are the costs for alternative accommodation, if available?
- Childcare – if childcare is used as this is a significant expense.
- Motor Vehicle and Home Insurance – due to the varying nature of motor vehicle requirements and insurance and inflation in the building industry impacting home insurance, these were moved from set costs in 2021 to its own standalone category.
- Special circumstances – any specific household or individual requirements that need to be reflected on a case-by-case basis – e.g. disability.
What are considered Reasonable Living Expenses?
The table below is taken from the ISI and displays the monthly set costs considered to be Reasonable Living Expenses. Note about children’s costs – some additions are applied if your family has more than two children.
You can read the RLE guidelines in full at this link – Guidelines on a reasonable standard of living and reasonable living expenses. Published by the Insolvency Service of Ireland (ISI).
It is important to note these are guidelines. A borrower is not required to spend their money as listed in the breakdowns; they have total control over their spending.
How do I work out my RLE?
The ISI has a helpful online RLE calculator to help you work out what your household’s reasonable living expenses are.
If you would like more information on RLEs and the mortgage arrears supports available through Abhaile, call the MABS Helpline on 0818 07 2000 to speak with a Dedicated Adviser.
Disclaimer: This blog does not represent legal advice and is intended for guidance only. If you are concerned about your current or future personal financial situation, then please contact an adviser from MABS. Advisers are available by phone, email and in-person in locations nationwide.
Note: We welcome references to and use of the content in this blog. However, please reference MABS, and link said content if you choose to do so.
Originally posted: July 2020.
Updated: 15 January 2024.