Deirdre Clune (Cork South Central, Fine Gael)
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Question 95: To ask the Minister for Social and Family Affairs the progress made on the reform of rent supplement; and if she will make a statement on the matter. [39390/08]

Frank Feighan (Roscommon-South Leitrim, Fine Gael)
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Question 97: To ask the Minister for Social and Family Affairs if she will report on the welfare reforms proposed in the programme for Government for the rent supplement scheme; and if she will make a statement on the matter. [39416/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 95 and 97 together.

The purpose of the rent supplement scheme is to provide short-term income support to eligible people 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. In recent years, a significant number of people have come to rely on rent supplement for extended periods. There are currently more than 69,700 people in receipt of rent supplement, almost 32,000 of whom have been receiving a supplement for 18 months or more. For this reason, the rent supplement scheme must be viewed in the context of overall housing policy, particularly in the case of long-term recipients.

I am anxious that all avenues are explored in providing support for those on long-term rent supplementation, including options to support them in securing a home. One of the measures introduced to address this is the rental accommodation scheme, RAS, which gives local authorities specific responsibility for meeting the longer-term housing needs of people receiving rent supplement for 18 months or more on a phased implementation basis. Since 2005, more than 15,800 rent supplement recipients have been transferred to RAS units and other social housing options. The commitment in the programme for Government to the development of a mortgage support system is also being advanced in the context of housing policy, with provision being made in the new housing Bill for an incremental purchase scheme. This scheme will enable existing social housing tenants and households qualified for social housing support to become owners of houses newly built by housing authorities and voluntary and co-operative bodies.

The Department of Social and Family Affairs provides income maintenance support through the mortgage interest supplement scheme. This scheme assists eligible people who are unable to meet their mortgage interest repayments and contributes to the interest portion of the mortgage repayments only. Almost 7,000 people are now in receipt of a mortgage interest supplement.

With regard to the commitment to review the rent supplement scheme and the associated means test, significant changes in the means test for rent supplement were implemented in 2007. Where a person working up to 30 hours per week has additional income greater than the standard weekly rate of supplementary welfare allowance, the first €75 of such additional income, together with 25% of any additional income above €75, is disregarded for means assessment purposes. This ensures that those returning to work or participating in training schemes are better off as a result of taking up such an opportunity. A person accepted as having a long-term housing need under the RAS may engage in full-time employment and still qualify for rent supplement.

Rent supplement is calculated to ensure that an eligible person, after payment of rent, has an income equal to the rate of supplementary welfare allowance appropriate to his or her family circumstances, less a minimum weekly contribution which each recipient is required to pay from his or her own resources. When last set in 2004, the minimum contribution represented approximately 10% of the minimum social welfare weekly payment rate. While social welfare payments have risen by nearly €70 per week since then, no upward adjustment has been made to the minimum contribution. As part of budget 2009, I announced my intention to increase the minimum contribution from €13 to €18 with effect from 1 January 2009. This will represent 8.8% of the basic social welfare weekly payment and will significantly reduce the differential between the contribution paid by rent supplement tenants and the contribution payable under the local authority differential rent scheme.

The fact that more than 69,700 people are receiving rent supplement and the fact that more than 50,000 rent supplements have been awarded since the beginning of this year indicate that the scheme is effective in meeting needs. However, I intend to keep the rent supplement scheme under review, and the Department will continue working closely with the Department of the Environment, Heritage and Local Government in ensuring that RAS meets its objective of catering for those on long-term rent supplementation while enabling rent supplement to return to its original role of a short-term income support.

Noel O'Flynn (Cork North Central, Fianna Fail)
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I remind Members that in ordinary oral questions there is one minute for each supplementary question and one minute for each reply.

Olwyn Enright (Laois-Offaly, Fine Gael)
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I welcome the fact that changes are to be made in the legislation to enable people to purchase houses in voluntary schemes. That is important. I do not know whether the Minister read the Focus Ireland submission on housing last week. The main problem with the rent supplement scheme is that the capping levels do not reflect the market value, particularly in certain areas. We all know of many cases in which people are topping up payments to their landlords to give a total rent in excess of the rent supplement. People are either asking their landlords to sign the form on that basis or losing accommodation because they cannot get their landlords to sign on that basis. This needs to be adjusted. I appreciate the Minister does not want to drive up the price of rent, but an adjustment is required. I ask the Minister to ensure this is dealt with in the review because it is causing people difficulties. If one cannot pay a month in advance, the landlord will go to somebody else who can give that payment straight up. That is the second matter that must be urgently adjusted. I will not go into the quality issues because I will not be allowed.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Deputy put her finger on it when she said it is important we do not drive up the rent. When we examined the rent limit in August, rents had fallen by 5% and the supply of rental accommodation had doubled. Given the number of tenants who come under this scheme, there is always a danger that our raising the limits would drive up rent. The fact that so many people benefit from it shows that it is in some way right. We will re-examine it at the beginning of next year. I do not want to be the driving force behind the market on this. One third of private sector tenants in the country are on rent supplement, so it is a very significant driver in the market. We hear anecdotal evidence of people who have built office blocks and want to convert them into accommodation suitable for rent supplement, but we do not want to ghettoise people on rent supplement. In the current market landlords are very glad to get tenants, particularly given how the supply has doubled.

Róisín Shortall (Dublin North West, Labour)
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What is the Minister at regarding rent supplement? The budget provided for very meagre increases in social welfare, approximately 3%. For most people, apart from pensioners, that amounted to €6.50 per week. For people on rent supplement there is a clawback of an additional €5 per week, which means people on welfare in private rented accommodation on rent supplement get a net €1.50 per week from this budget. How can the Minister justify that? In real terms it represents a cut in the income of many welfare recipients. How does she expect those people to survive when already low levels of welfare payments will be cut in real terms in the coming year? How can those people survive?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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As I clearly stated, the rent contribution has not gone up in a number of years. It is entirely reasonable to expect somebody to pay €18 per week when the State pays anything up to €1,200 in some cases on their behalf, depending on family size etc. That €18 per week is much less than those same people would pay if they rented from the local authority.

Olwyn Enright (Laois-Offaly, Fine Gael)
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They would be in that house for life.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Increasingly the Government is anxious to try to bring it into line with some of the differential rents at local authority level. Some of those are, for example, €26 or €27 per week. When the levels were set in 2004, it was designed to be at approximately 10% of the social welfare rate and, having stayed the same over the last number of years, the new levels are only 8.8%.

Róisín Shortall (Dublin North West, Labour)
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That is not what I asked.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Therefore it is entirely reasonable to expect people to do that.

Arthur Morgan (Louth, Sinn Fein)
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Is the Minister aware of the great difficulty in which many low-income families are placed by side deals — under the table payments, as described by Deputy Enright a moment ago — which are put in by landlords? Is she aware that this is a consequence of what she is doing? Would she accept that the €400 million paid annually in rent supplement is money squandered because of the Government's inaction throughout the boom years to deal with the social housing crisis and the approximately 43,200 families languishing on housing waiting lists?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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No, I am glad to see that so many people are able to benefit from the scheme. The fact of more rental accommodation becoming available should help keep the prices down. The rent supplement budget for next year is €462 million. There is pressure on that due to the number of people losing their jobs. Approximately 72,000 people will benefit from it. It is a lot of money but given that 72,000 people are being housed for it, it is a good recognition of how the Government is trying to respond to people's difficulties. Deputy Enright already mentioned the new housing scheme introduced through the Department of the Environment, Heritage and Local Government. The RAS scheme, which did not work well in all local authorities for a while, is now operating effectively in all local authorities. I would hope to see more successes from that and to see people transferring from the rent supplement into RAS units or, more important, into social or other voluntary housing.

Olwyn Enright (Laois-Offaly, Fine Gael)
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I would be slow to describe this scheme as successful. Is it successful because all other Government housing policy has failed? There should never be this many people seeking rent supplement if alternatives were available. The Minister reiterated my point about market value. The Focus Ireland submission deals with that quite well by discussing its being a percentage of the market value and not the full market value, so its position paper had an opportunity to ensure rents did not increase in an area. As a review is ongoing, will this be taken into account? Last year we discussed the same points with the then Minister, Deputy Cullen, and it went ahead as it always does every year, in fact more negatively because of the increase for the tenant. It is one thing to pay for a local authority house when one knows one can stay in it for the rest of one's life. It is another matter to pay that rate for temporary accommodation that is often of very poor quality.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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We are anxious to do something about the poor quality accommodation and I am working with the Department of the Environment, Heritage and Local Government on that. As a result of the supply of rented accommodation some of it is of very good quality for people's €13 per week to date and €18 in future. The rent limit must be kept under review and I will re-examine it probably at the beginning of next year to ensure it is reasonable for people to be able to get accommodation in particular areas at particular rates.

Róisín Shortall (Dublin North West, Labour)
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There is a need for some joined-up thinking on the Minister's part. Arising from the budget and the Social Welfare (Miscellaneous Provisions) Bill, welfare recipients in private rented accommodation on rent supplement are getting an increase of a mere €1.50 per week on their welfare as a result of the clawback in rent supplement. There is no basis on which the Minister can defend that kind of meagre increase. I ask the Minister to reconsider this action, which will drive more people into severe poverty. Does the Minister want to preside over such a situation? The clawback on rent supplement is indefensible and I ask the Minister to reconsider her actions.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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It is entirely defensible to ask people to pay €18 per week for their accommodation.

Róisín Shortall (Dublin North West, Labour)
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No, I am talking about the Minister's actions which will result in the clawback on their meagre social welfare increase.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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It is entirely defensible on the basis that the changes introduced last year allow people to work. It is important that there should be no disincentive to people going to work. Many people on rent supplement will have additional income. If, in February, those same people were housed in Limerick in rental accommodation, they would pay €26 per week and in Dublin city €24.87 per week.

Róisín Shortall (Dublin North West, Labour)
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The Minister should get real, open her eyes and see the poverty around her.

Olwyn Enright (Laois-Offaly, Fine Gael)
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No wonder the Combat Poverty Agency was abolished.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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That is the differential rent rate in those two counties. It is substantially more than we ask anybody to pay at €18. It is reasonable. In hindsight it should have increased every year between 2004 and 2008, and it did not, so that is what it has come to.

Róisín Shortall (Dublin North West, Labour)
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Is it entirely reasonable to give people an increase of €1.50 per week?