Mr. Seamus McCarthy:

The supplementary welfare allowance scheme acts as a form of safety net within the welfare system. It is designed to provide speedy and flexible assistance to people who do not qualify for other scheme payments or who are awaiting decisions on claim applications under other income support schemes. Supplementary welfare was formerly administered by the community welfare Services division of the HSE on behalf of the Department of Social Protection. In October 2011, the community welfare staff transferred to the Department, which now has direct responsibility for scheme administration.

The assistance available consists of basic income support and a range of payments to cover certain living expenses that claimants may not be able to meet including urgent and exceptional needs payments. Rent supplement and mortgage interest supplement are also elements of supplementary welfare. Together with basic income support, these account for more than 80% of supplementary welfare expenditure. These are the three elements covered in the report before the committee today.

Each category of supplementary welfare examined has distinct target groups albeit with some overlaps. In effect, they are different schemes administered within a common organisation structure. Due to the different scheme risks and claimant profiles, the report recommended that the Department should treat them as separate schemes and that separate control policies should be developed for each.

Three out of every four claims for basic income support relate to people who are awaiting decisions on applications under primary schemes such as jobseeker's allowance or disability allowance. Expenditure on basic supplementary income support in 2011 was €169 million after recoupment of around €137 million from other schemes. The Department's policy is to check interim supplementary welfare claims weekly. The report recommended that an automated link should be established to trigger an immediate review of a claimant's basic supplementary income payment when a decision is made on an application under another scheme. This should ensure that when decisions are made about the primary scheme applications, appropriate action is also taken promptly on supplementary income support including any required recoupment of interim payments.

Rent supplement is an additional payment available under certain conditions to tenants in private rented accommodation who are in receipt of any social welfare or HSE payment or are on low incomes. It is not restricted to those on supplementary income support. Expenditure on rent supplement in 2011 was over €500 million. Almost 100,000 households were in receipt of support at end year. While rent supplement was originally intended as a short-term support, many recipients depend on the scheme over the medium to long term. At the end of 2011, more than half of the dependent households were in receipt of rent supplement for a year or more. The duration of claims may be understated because claimants who change address may in some cases be recorded as new claims. It would be preferable to measure the duration of claims based on length of household claim rather than length of tenancy. The Department sets maximum eligible rent rates for the scheme by reference to the location of the property and the composition of the claimant's household. In contrast, rents in the market are set by reference to property type. For risk management purposes, it was recommended that the Department develop its scheme management system to record and analyse expenditure by household composition and the type and location of accommodation rented.

A review carried out by the Department in 2011 estimated that the rent supplement scheme was funding about 40% of all households in the private rental sector. Analysis indicates that the maximum rent limits set by the Department have a significant influence on the rental market with evidence of many landlords using the rent supplement limits as benchmarks in setting rental prices in the respective areas. As a result, the Department has potential to influence the residential rental market to a significant degree. The Department of the Environment, Community and Local Government is also a significant market player through the rental accommodation scheme. The Department carries out reviews of the maximum rent limits about every 18 months. A review carried out at the end of 2011 resulted in reductions to the rent limits in almost all locations reflecting market decline in rents. I understand that another market-based review has recently been completed resulting in further adjustments to rent limits.

Controls are required to verify the accuracy of rental amounts paid by claimants because these determine the level of rent supplement that may be payable. Scheme guidelines require claimants to provide evidence of their tenancy and of the amount of rent being paid but the examination found that such evidence was not on file in 80% of sample cases examined. The Accounting Officer stated that additional staff training would be provided on the proper maintenance of records and that powers of enquiry have recently been granted to appropriate staff to request and oblige landlords to provide information in respect of rent supplement tenants.

The Department rarely refuses to pay rent supplement on the grounds that the accommodation is not to an acceptable standard. Staff administering the rent supplement scheme are not required to make a judgement on whether accommodation is of a suitable standard as they are not qualified to do so. Staff can refuse to pay rent supplement where the Department has been notified by a local authority that the relevant accommodation standards are not being complied with. If a notification relates to an existing claimant, the situation is discussed with the claimant and the Department staff attempt to act in the claimant's best interest. Home visits by staff provide evidence that the claimant is living at the address they have stated and can also be used to assess the standard of accommodation and its suitability for the claimant's needs. In two local offices visited, the examination team found very different approaches to the conduct of home visits. In the Bishop's Square office in Dublin, all 15 cases examined had a home visit at claim award stage. In contrast, the examination found that 14 of the 15 rent supplement claims examined in Galway had never been the subject of a home visit either when the claim was put into payment or at a later review stage.

The discrepancy between offices in the home visit rates is striking and may reflect different legacy approaches taken in HSE regions. Given the level of expenditure incurred and the vulnerability of many of those dependent on welfare assistance, it is important to ensure that accommodation of an acceptable standard is provided. For that reason, the report recommends that occasional home visits to rent supplement recipients should be undertaken. In cases where deficiencies in the standard of accommodation are evident, the Department staff should refer the accommodation to the relevant local authority for inspection. Results of such referrals should be monitored and taken into account in reviews of claims.

Mortgage interest supplement is paid to assist eligible households with the interest portion of their mortgage repayments. The number of claimants increased from around 3,700 in 2007 to 18,700 in 2011. Expenditure in 2011 was around €67 million. A review published by the Department in July 2010 confirmed that the overall objective of the mortgage interest supplement scheme remained valid but recommended a number of changes. Legislation enacted in June 2012 provided that applicants must have secured alternative payment arrangements with lenders for at least 12 months prior to applying for mortgage supplement. The Accounting Officer will be able to update the committee in respect of other changes to the scheme and their impact on eligibility and expenditure levels.