Joan Burton (Dublin West, Labour)

I thank Deputy Gilmore for raising this important issue. What does the poverty trap mean in terms of housing? A person on social welfare with two children and who receives rent allowance would need a gross income of between €30,000 and €40,000 to make it worth his or her while to go back to work. This is the true story of the poverty trap that bedevils the rent allowance and social welfare system. Where once we were praised for having an agile economy we now have a rent and social welfare system that is designed to discriminate against working class families on housing lists. The darker side of the booming economy is the number of families existing exclusively on social welfare income and locked out of employment, education and training, especially if they are also in receipt of rent allowances.

Some 60,176 rent supplements are paid to individuals and families at a cost of approximately €400 million annually. I am not sure if the Government is aware of the extent to which a new set of poverty and unemployment traps has developed in recent years for people receiving rent allowances. The Minister may have seen the reports published today by the Economic and Social Research Institute, ESRI, of a doubling of youth unemployment among recent school leavers, particularly young men who have dropped out of school early. The Government's policy on rent allowance is directly contributing to this problem.

Another contributory factor is the discriminatory structure of charging differential rents for local authority houses. Many schemes such as those in Fingal County Council are based, without limit, on the earnings of the highest earner in the house. Thus if a young guy works on a building site and earns €1,000 a week, as happens, the rent for the house for the entire family will be based on his earnings. Such would be the rise in rent that most people in that situation would be forced out of home within a short period. It is a new eviction strategy by this Government. Alternatively the parents, usually the mother, may fail to report fully the young person's earnings, end up owing thousands of euro in arrears to the county council and often resort to money lenders, locking the family into another cycle of poverty. Thus this Government's housing policy actively discriminates against young people born and reared in a rented local authority house. The Minister of State knows this and it is appalling discrimination against young people.

Differential rent schemes push young people out of their parental home and direct them to the private housing market. It should be borne in mind that many of these people being pushed out of their homes are in their late teens and early 20s. They pay through the nose to rent an apartment and are too young and inexperienced to deal with life on their own with large wage packets and the temptations that apartment living can offer. Equally the affordable purchase option is not realistic because they have had no time to save up to qualify for the scheme. The Minister of State should not roll his eyes. I am telling him about reality as it happens in Dublin West.

See this speech in context