Mary Hanafin (Dún Laoghaire, Fianna Fail)

Expenditure on rent and mortgage payments has increased significantly in recent years and there are currently over 88,000 recipients of rent supplement and 12,900 recipients of mortgage interest supplement.

Increased expenditure on these payments is driven not only by rises in the live register but also by an increase in recipients on other schemes such as one-parent family payment and illness related payments. The estimated number of recipients for both schemes in 2009 was reviewed during preparation of the supplementary budget. As a result of this analysis, the provision for the rent supplement was increased to €490.4 million, which is €50.7 million more than the 2008 outturn on this scheme. The allocation for the mortgage interest supplement was also increased, to €40.1m, or €12.5m more than the outturn for 2008. Expenditure on both schemes is being closely monitored on a monthly basis, taking into account trends in recipient numbers, average monthly payments and savings arising from the supplementary budget measures.

As Deputies will be aware, rent supplements are subject to a limit on the amount of rent that a recipient may incur. Setting or retaining maximum rent limits at higher levels than are justified by the open market can have a distorting effect on the rental market, leading to a more general rise in rent levels and in landlord income. This in turn may worsen the affordability of rental accommodation unnecessarily, with a particularly negative impact for those tenants on lower incomes.

The recent supplementary budget provided for decreases in both the maximum rent payable in respect of new tenancies and in rent supplement payments to existing tenants. These changes were informed by data from the Private Residential Tenancies Board, the CSO and a leading property rental website. It is vital that taxpayers money is not paying inflated rents to private landlords when rental prices in general have dropped considerably.

Overall, I can assure Deputies that the Government is conscious of the needs of the increasing number of people who are coming to rely on State assistance with their rent and mortgage interest payments. We have substantially increased provision for these schemes, while also taking steps to ensure that we are not paying landlords excessive rents.

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