Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 60: To ask the Minister for Social and Family Affairs the steps she is taking to reduce the cost of rent supplement to the Exchequer; and if she will make a statement on the matter. [40837/09]

Róisín Shortall (Dublin North West, Labour)
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Question 61: To ask the Minister for Social and Family Affairs the steps she will take to reduce the cost of rent supplement to the Exchequer. [40998/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to answer Questions Nos. 60 and 61 together.

Rent supplement is payable to people who are unable to meet the cost of renting private accommodation and is intended as a short-term support. There are currently more than 91,600 people in receipt of rent supplement, an increase of almost 24% since the end of December 2008. It is essential to ensure that State support for rent supplemented tenants, who form a substantial section of the rental market, does not give rise to inflated rental prices with particular negative impact on those tenants on lower incomes, including people in low paid employment. It is also important to ensure that taxpayers' money is not being used to pay excessive prices to landlords.

To that end, the April budget provided for new maximum rent limits with effect from 1 June 2009 to reflect the general reductions in private sector rent levels. In order to bring the minimum contribution towards rent and mortgage interest supplement in line with payments required of local authority tenants, it was increased by €6, to €24 per week. Payments to existing rent supplement tenants were also reduced by 8% with effect from 1 June 2009.

The supplementary budget also provided for new arrangements for applications for rent supplement. To qualify for rent supplement, a person must now have been residing in private rented accommodation or accommodation for homeless persons for a period of 183 days within the preceding 12 months of the date of claim for rent supplement. A person may also qualify for rent supplement where the person is deemed by a housing authority to be eligible for and in need of social housing support.

The aim of this restriction on entitlement to rent supplement is to ensure that housing authorities remain the principal agents both for assessing housing need and for meeting the long-term housing needs of people. Community welfare officers have discretion to provide assistance where exceptional circumstances exist in any individual case.

My Department continues to work closely with the Department of the Environment, Heritage and Local Government in ensuring that rental accommodation scheme, 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. Trends in the private rental market are monitored on an ongoing basis and maximum rent limits will be reviewed in the light of a continuing drop in rental prices in recent months.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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I thank the Minister. The savings target in this year was €50 million. How much has been saved to date and will the target be reached by the end of the year? Why has the Government failed so dismally to transfer people from rent supplement to RAS. Since 2005, 22,400 people have been transferred from rent supplement to RAS or to local authority accommodation. This is a damning indictment of the delivery of a stated commitment of Government. This is especially true in light of the fact that 32,600 people would be deemed eligible at this time. What is the Minister doing to ensure this happens and how are we in a situation where people are refusing to join RAS or refusing to move into local authority accommodation and staying in the rent supplement scheme?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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There are two basic questions from Deputy Naughten, who I welcome to the portfolio. The savings outlined at the beginning of the year amounted to €48 million. Those savings have been achieved by virtue of the changes introduced. However, they do not show up on the bottom line of expenditure on rent supplement because demand has increased. The published Estimate for the year was €490 million but we will spend approximately €500 million by the end of the year.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Has the Minister already saved €48 million?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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We have built savings of €48 million into that. The additional claims accounted for amount to €77 million. Unfortunately, it is one of those cases where there was an increase in demand.

Deputy Naughten's second question is central to reducing expenditure on rent supplement, which is to get people to move to RAS. The responsibility of local authorities is critical in this matter. We found that people were reluctant to move from private rented accommodation in a location of their choice to local authority housing. Since we increased the minimum payment that people must pay, finance is not having a deterrent effect. In some cases we found that people were paying less on the minimum contribution on the rent supplement than one would pay in local authority housing. We have removed this disincentive but it is something on which we are keeping a close eye. I work closely with the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Michael Finneran, on this issue because of its link with housing.

Róisín Shortall (Dublin North West, Labour)
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There is no evidence of the Minister working hard on this issue. Our questions concern how the Minister will reduce the cost of housing in terms of rent supplement. Unfortunately, very little progress has been made in this area and it seems the Minister is washing her hands of the matter. The Minister referred to savings made through actions taken in the past two budgets but she does not seem to get the point. Major savings can be made if more people transfer from rent supplement to RAS. Rather than wash her hands of this matter, as she did in the past two budgets, and place the onus on tenants - many of whom are vulnerable - by telling them to negotiate with their landlords, why is the Minister not taking responsibility for this and dealing with it on a State-wide basis by driving down rents? Is the Minister aware that Dublin City Council achieved savings of 16% on rents by negotiating directly? The council is in a powerful position and this should happen throughout the country.

Of all expenditure in social welfare, rent supplement is the greatest waste of money because it is dead money. It goes into the pockets of landlords and the State gets very little in return. There are currently 33,000 people waiting to avail of RAS. That system is much more beneficial in enabling them to go to work without creating poverty traps. It is much more beneficial to the State because of the potential significant savings that can be made. Why are some people waiting for this scheme and what steps has the Minister taken to enable a greater number of people to move from rent supplement to RAS?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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In the April budget, when we reduced by 8% the rent supplement payment to all existing tenants, I was excoriated and people suggested this was far too penal. Now, I am told that others can make savings of 16%.

Róisín Shortall (Dublin North West, Labour)
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In an entirely different position.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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It shows that people have been able to negotiate with landlords and have been able to get a reduction in rents.

Róisín Shortall (Dublin North West, Labour)
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The Minister is being disingenuous.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Based on CSO and PRTB figures, rents have reduced by 13% since January and a full 20% in the past 12 months. Even since we introduced the reduction, rents have reduced by another 3%. There is scope on this issue. Some 23,000 properties are available for rent so there is plenty of scope for people to negotiate, as they have done successfully. I am well aware of the Dublin City Council case because I saw it in the answer to a recent question. It has achieved savings in the rent it pays and if one is doing this on a wider level - paying to a landlord directly - of course one will be able to get those kinds of savings. The rent supplement is not paid directly to landlords; it is paid directly to the tenants who seek supplementary assistance. The responsibility for housing rests with the housing authorities and rents with the local authorities. We continue to put pressure on them to ensure this message gets across. This is why I referred to working with the Minister of State, Deputy Finneran. We want to transfer people out of rent supplement into RAS.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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With 32,600 people on rent supplement over 18 months, the Minister is failing dismally to get people to transfer from rent supplement to RAS. If the Minister is working so closely with the Minister of State with responsibility for housing, Deputy Finneran, why did he introduce a long-term leasing initiative? Surely he should have put investment and support into rolling out RAS if that were the Government's priority. The fact is that public moneys are being squandered because of a lack of co-ordination between the Minister and the Department and the Minister of State with responsibility for housing. People are still not prepared to transfer from rent supplement and the Minister is failing dismally to deliver on that.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The responsibility for RAS and housing rests with the local authorities. The questions put by the Deputies are valid but I suggest that they table them for the relevant Department.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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The Minister cannot wash her hands of that.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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As far as I am concerned the more people who transfer the better as it saves on rent supplement. One cannot take two different attitudes in the same year to the same scheme. At the beginning of the year we were not doing enough to protect the vulnerable or giving enough to the poor unfortunate tenants. We were going to have them out on the street and homeless because of the changes we made. Now, Deputy Naughten is stating that it is dead money and we should finish the scheme for half the people on it.

Róisín Shortall (Dublin North West, Labour)
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The Minister is being entirely disingenuous in the way she is answering the question. What is more, she is showing that she has no grasp of the issue. If the Minister speaks to members of the Simon Community, Threshold or Focus Housing they will all tell her of the severe difficulties she has caused for people at the lower end of the market, the most vulnerable people in grotty bedsits who do not have the strength to negotiate with the landlords with whom they have legal agreements. The Minister took the soft option by forcing those people to take the hit on it; they are taking the hit personally rather than driving down rents. The Minister has no information at her disposal on the level of rents at the lower end and should stop spoofing about this.

Dublin City Council has shown that it is possible to achieve savings through the introduction of RAS. This could be done on a national level. In the past five years, the Government has spent €2 billion on rent supplement. That is an enormous amount of money. If the Minister could get 16% savings on that it would represent a massive amount. What is the Minister doing specifically to reduce that bill and to ensure more people have the option of going on RAS, given that there are 33,000 people waiting for it at present?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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This year, we have already decreased the amount of rent that was acceptable, therefore decreasing the amount of money paid to tenants to give to landlords and increasing the amount of money that tenants had to pay out of their own personal contribution.

Róisín Shortall (Dublin North West, Labour)
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Passing the buck to the tenants.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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This helped to make savings this year. Earlier this year we accepted - Deputies were critical of the fact that we were putting such pressure on people - that-----

Róisín Shortall (Dublin North West, Labour)
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Yes, of the way the Minister did it which was targeting tenants.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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-----for very many people it is only really possible to negotiate when their leases are up for renewal, which is on an annual basis. We anticipate more savings there. We are also actively examining the way in which rents are decreasing all the time. We will set new rent levels which will incur savings, bearing in mind differentials throughout the country and-----

Róisín Shortall (Dublin North West, Labour)
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Why does the Minister not actively examine expanding RAS?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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-----for various groups, such as a single person having more difficulty than a family which is able to find a semi-detached house somewhere. I accept the principle that moving people out of rent supplement and into RAS is the best way to make savings.

Róisín Shortall (Dublin North West, Labour)
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Why is the Minister not doing that?

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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It is not principles we need, it is actions.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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That is why I expect local authorities will increase their work in this regard-----

Róisín Shortall (Dublin North West, Labour)
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What is the Minister doing about it?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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-----where it is their responsibility.