Housing allowance

According to InfoMonitor S.A. Economic Information Bureau, high bills for electricity, gas and water are the most burdensome expenses for Poles. Other problematic expenses are those related to the purchase of fuel, food, heating fuels, and expenses for rent or loan instalments. At the end of October 2022, the total value of consumer debt was nearly PLN 77.4 billion, and almost 2.7 million people already had a problem with paying their current obligations.

Housing fees are monthly expenses that have been steadily increasing in recent times, putting more and more burden the household budget. Therefore, the government has prepared various types of housing subsidies for Poles. In addition to the government’s ‘Flat for Start’ Programme, the Borrower Support Fund, the Rental Housing Fund, and the ‘Flat Plus’ Programme, an interesting form of subsidizing the cost of maintaining an apartment or a house is the housing allowance.

The housing allowance is regulated by the Act of June 21, 2001 on housing allowances (Journal of Laws 2001 No. 71, item 734) and is granted to:

• tenants or sub-tenants of residential premises, residing in these premises,
• persons living in residential units to which they have a cooperative right to dwelling,
• persons living in residential units located in buildings they own and owners of independent residential premises,
• other persons with legal title to the occupied dwelling and incurring expenses related to its occupation,
• persons occupying a dwelling without a legal title, waiting for a replacement dwelling to which they are entitled or a social rental of the premises.

One of the eligibility criteria is the amount of family income. For this purpose, the average monthly income per member of the applicant’s household is determined. This income is calculated on the basis of the household’s incomes from three months preceding the date of application and then related to the average salary in the national economy as for the date of the application. The condition is considered fulfilled, when that relation does not exceed 40% in a one-person household and 30% in a multi-person household. According to the Statement of the President of the Central Statistical Office of February 9, 2022, the average salary in the national economy in 2021 amounted to PLN 5 662.53. Thus, the above-mentioned income criterion is PLN 2 265.01 for a one-person household and PLN 1 698.76 for a multi-person household.

Income – after deducting the amounts of alimony paid to other people – are revenues minus deductible costs, income tax charges, social security contributions not included in revenue costs and health insurance contributions.

If the amount of calculated income per household member is higher than the above amounts, and the amount of the surplus does not exceed the amount of the housing allowance, then the due housing allowance is reduced by this amount. Moreover, if the amount of the housing allowance would be less than 0.5% of the amount of the average salary in the national economy (that is, currently less than PLN 28.31), this subsidy is not granted. It is also worth noting that the municipal council, by resolution, may increase the percentages of the average salary in the national economy.

The usable area of the premises is another important condition for obtaining a housing allowance. Subsidies can be received if the area is not higher than 30% of the legal normative area, which is:

• 35 square meters for a 1-person household,
• 40 square meters for a 2-person household,
• 45 square meters for a 3-person household,
• 55 square meters for a 4-person household,
• 65 square meters for a 5-person household,
• 70 square meters for a 6-person household.

The Act allows a larger apartment size in two cases:

if there are more than six people living in a household, then each additional person increases the normative area of that apartment by 5 square meters,

if a disabled person lives in the apartment, then the normative area is increased by 15 square meters (regardless of the number of household members).

The larger area of the premises does not automatically eliminate the possibility of applying for a housing allowance. In fact, the Act allows for a situation that the area of the premises exceeds the standard by no more than 30% or even by no more than 50% in case when the share of room and kitchen area in the usable area of the apartment does not exceed 60%. The housing allowance is then reduced accordingly. It is charged only on the normative area, while meters above the norm are paid normally.

The table below presents information about the area of the apartment, for which the housing allowance is available, depending on the number of household members.

TABLE 1. APARTMENT AREA VS. NUMBER OF HOUSEHOLD MEMBERS

source: own study

The municipal council may increase the maximum normative area or the maximum permissible degree of exceeding the normative area.

The amount of granted housing allowance depends on the amount of housing expenses, which include, among others, rent rate, operating costs, common property management costs (renovation fund) and fees for heat, water, sewage, garbage collection. However, expenses do not include, for example, those incurred for insurance, property tax, gas or electricity charges.

The amount of the housing allowance is the difference between the above-described housing expenses, corresponding to the normative area of the occupied premises, and the amount of expenses incurred by the applicant in the amount of:

• 15% of household income – in a 1-person household,
• 12% of household income – in a 2-4-person household,
• 10% of household income – in households of 5 persons and more.

The amount of the housing allowance may not exceed 70% of the expenses attributable to the normative area of the occupied apartment, or 70% of the actual expenses incurred for the dwelling if the area of the dwelling is lower than or equal to the normative area. However, the municipal council may increase or decrease their share by 20 percentage points.

The housing allowance is granted for six months. Typically, the funding is not received in cash or on a personal bank account of the beneficiary, because the subsidy is transferred on the bank account of the property manager and reduces the amount of the due payment for the premises. The exceptions are the owners of single-family houses who receive subsidies directly.

The average allowance in 2021 was PLN 247.80. In recent years, the number of housing allowances paid has been systematically decreasing. In 2015 it was almost 4.4 million, while in 2021 only 2.5 million. By 2020, this has translated into a constantly declining total amount of allowances paid, which in 2015 amounted to almost PLN 900 million and in 2020 to just over PLN 580 million. In 2021, the amount of housing allowances paid out was over PLN 615 million. The situation described above is reflected in the graphs below.

GRAPH 1. NUMBER OF HOUSING ALLOWANCES PAID (MILLION) IN THE YEARS 2015 – 2021

source: own study based on CSO data

GRAPH 2. AMOUNT OF HOUSING ALLOWANCES PAID (PLN MILLION) IN THE YEARS 2015 – 2021

source: own study based on CSO data

People in a difficult financial situation who have problems with paying for a flat should remember about many possibilities of financial support offered by the authorities, including housing allowance.

Monika Kubisz
AMRON System Coordinator