Joan Burton (Dublin West, Labour)

I thank the Deputy for raising this very important issue. The new maximum rent limits were set after an analysis of the most up to date market data available. The emphasis of the rent limit review was to ensure that maximum value for money for tenants and the taxpayer was achieved while at the same time ensuring that people on rent supplement were not priced out of the market for good quality private rented accommodation.

As the Department currently funds approximately 40% of the private rented sector - about 95,000 people are in receipt of rent supplement and we will spend over €0.5 billion on it this year - it is essential that State support for rents are kept under review, reflect current market conditions and do not distort the market in way that could increase rent prices for others such as low paid workers and students.

Where a claim is under review and the rent is above the new maximum limit, the customer is being asked to contact the landlord to renegotiate the rent. Where a landlord does not agree to reduce the rent to the new rates, I have specifically asked that departmental officials discuss the options open to the tenant, up to and including seeking alternative accommodation.

The Department is monitoring the impact of the implementation of the new limits. If Deputy Murphy has examples of children having to change school as a result of the change to the limits, she should pass the information on to the Department as soon as possible. I recognise what she is saying about differences from area to area. This was built into the study and we will take this into account.

Although the new limits have only been in place for two months, the current trends would suggest that the market is adjusting and the level of availability at the new limits is increasing.

The purpose of rent supplement is to provide short-term income support to eligible tenants living in private rented accommodation whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. Since 2005, rent supplement expenditure has increased from €369 million to a provisional outturn of €503 million in 2011. The number of persons claiming the allowance increased from 60,200 in 2005 to over 96,800 at the end of 2011, representing a 61% increase. The Deputy has acknowledged how difficult the economic circumstances are.

On the question of the clustering of rented properties, I am sure the Deputy will agree that rent supplement is not a long-term solution for those with a housing need. The Government has effectively two initiatives to deal with long-term reliance on rent supplement: the rental accommodation scheme, RAS, which has been in operation since 2004; and the new housing policy initiative, as announced by my colleagues, the Minister for the Environment, Community and Local Government and the Minister of State responsible for housing and planning, on 16 June 2011. The full implementation of these initiatives will address concerns about social mix and the clustering of social accommodation, allowing rent supplement to return to being a short-term income support payment.

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