Dáil debates

Tuesday, 12 June 2012

Priority Questions

Rent Supplement Scheme

2:00 pm

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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Question 112: To ask the Minister for Social Protection the status of changes to the rent supplement scheme; the number of tenants who have had to move accommodation as a result of the changes; and if she will make a statement on the matter. [28167/12]

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 113: To ask the Minister for Social Protection the total number of rent supplement claimants; the number to whom the new limits now apply and within that the number who were existing claimants prior to 1 January; her views on the increasing number of claimants who are struggling to convince their landlords to accept the lower payment and or who cannot find alternative appropriate accommodation at the lower rent limit;and if she will deal directly with landlords in these situations. [28165/12]

Photo of Joan BurtonJoan Burton (Minister, Department of Social Protection; Dublin West, Labour)
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I propose to take Questions Nos. 113 and 112 together.

There are currently approximately 93,800 persons in receipt of rent supplement, for which the Government has provided €436 million for 2012. New maximum rent limits were introduced from 1 January 2012, following 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 are not priced out of the market for private rented accommodation. The revised rent limits are applicable to new rent supplement tenancies from January 2012 and existing tenancies on review. Approximately 21,300 claims have been awarded in 2012, indicating that it is possible to secure accommodation within the revised limits. There were 96,800 persons in receipt of rent supplement at the end of 2011.

Where rents are in excess of the limit, customers are being asked to contact their landlord and renegotiate the rent. Where landlords do not agree to reduce the rent within the limits, staff will discuss the options open to the tenant, including seeking alternative accommodation. Information on the numbers who have secured alternative accommodation is not available. The Department does not intend to negotiate directly with landlords to reduce rents on behalf of a tenant. Department officials dealing with rent supplement tenants will continue to ensure their accommodation needs are met and that there will be no incidence of homelessness due to these changes.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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While I understand where the Minister is coming from in this regard, the people who she should be looking after are the meat in the sandwich between private landlords and the community welfare officers. I do not believe there is a Member of this House who has not had people in his or her constituency clinic reporting they received a letter from the community welfare office telling them to go back to their landlord and ask for reduced rates. The Minister has just confirmed this. It is distressing that she does not have numbers in regard to how successful these renegotiations were. She cannot state this has not led to homelessness because she does not know that, yet she included that platitude at the end. We have all come across cases of people on rental supplement, with very little income and bargaining power, who, in many cases, when the community welfare officer tells them they must get a cheaper place while the landlord tells them he or she will not reduce the rent, have had to leave and try to find new accommodation. It may be at a cheaper price but what happens in the meantime? That is the issue with which I have a problem. When people change their address they are no longer eligible to be on the local authority social housing list, must provide details of their new address and be assessed in terms of this accommodation and whosoever else might be living at the new address, all of which can take a considerable time. We know how complicated the form is for getting onto the social housing list. Many community welfare officers are not paying rental supplement in the intervening period because the people are not on the social housing list to begin with.

The Minister might offer an observation on having the rental supplement dealt with by the housing department in the local authority which would bring a joined-up approach to the issue.

Photo of Joan BurtonJoan Burton (Minister, Department of Social Protection; Dublin West, Labour)
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As stated in the programme for Government, in the Government's commitments and as I have stated in the House, the aim and objective is to transfer rent supplement to the local authorities which are expert on housing and have housing departments. The difficulty in regard to community welfare officers or the community welfare service, as it is now known in the Department, is that the community welfare service officer is dealing with the individual, not the landlord, whereas the local authority has the power and the capacity to deal with both the individual on a housing list and the landlord who is providing accommodation. There is an interdepartmental working group between my Department and the Department of the Environment, Community and Local Government, addressing the various complex issues involved. I hope for something like the RAS scheme, whereby the local authorities rent the property for a number of years and the individual is much freer to work. The problem with rent supplement is that there is an inherent employment or poverty trap involved.

I refer to the issue of negotiations with landlords. We have data we collected from around the country on an exhaustive basis, from all the different available sources. They indicated clearly that in some cases the Department of Social Protection, which is responsible for approximately 40% of rented properties in the country, was paying over the odds for rented accommodation. My situation is that, along with every Minister, I am required to find savings and get value for money. When one looks at availability of accommodation in various parts of the country and considers the kinds of falls in property values - this does not apply everywhere, obviously - it is surprising that rents have not reflected such falls to some degree. It is important that the Department gets value for money.

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I am opposed to State subsidisation of landlords. This is a reality, however, and is due to the lack of investment in social housing over decades since the State was founded. The Minister stated she is required to make savings and we accept that. However, the main problem, which I hope she will accept as such, is that she has passed the onus to negotiate with landlords to tenants, who are often very vulnerable, rather than to the Department or the community welfare officers who negotiate with the tenants. I wonder whether the Minister is aware that in many cases, the arbitrary figures that were implemented recently have led to tenants further impoverishing themselves by making under-the-counter payments, in addition to the payments they were already involved in, to ensure they can stay in the places where they have put down roots. I will give an example. I recently dealt with the case of a woman who has three school-going children and was living near her mother in Leopardstown. When her lease was due for renewal, the rental prices in that area were nowhere near what the community welfare officer was willing to pay. The nearest place where she could go was well out of the locality when she can avail of the family support, etc., that she requires. One of the consequences of this change is that it is forcing people to move their children from one school to another. I hope the Minister will accept the point I am making. Has she discussed with the Department of the Environment, Community and Local Government the possibility of using vacant NAMA properties to accommodate the rental accommodation scheme, as has been suggested? Specifically, I would like such properties to be categorised as social housing. That would be a much quicker way of reducing the rent supplement bill than passing people between the rental accommodation and rent supplement schemes.

Photo of Joan BurtonJoan Burton (Minister, Department of Social Protection; Dublin West, Labour)
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I understand discussions are ongoing between NAMA and the Department of the Environment, Community and Local Government on the question of procuring appropriate property which may be available to NAMA and would be suitable for social housing. The difficulty is that in many cases the available property is not in a place like Leopardstown, where Deputy Ó Snodaigh's constituent wanted to stay. As a consequence of the way property was developed around the State, it is more likely to be found in a place like the upper Shannon area.

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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There are many empty properties in Leopardstown and right across Dublin.

Photo of Joan BurtonJoan Burton (Minister, Department of Social Protection; Dublin West, Labour)
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That is being worked on at the moment. It is really a matter for the local authorities. The Department of Social Protection makes rent supplement payments and allows tenants to source properties. We are not directly engaged in the property market. That is why I reminded Deputy Fleming of our clear policy preference, which is for the rent supplement scheme ultimately to be transferred to local authorities. In 2000, approximately 42,000 people were receiving rent supplement payments, at an annual cost of €150 million. At present, approximately 93,000 people are receiving rent supplement payments, at an annual cost of €433 million or just under €0.5 billion. It is clear that we are spending a vast amount of taxpayers' money on resourcing the rent supplement scheme. I would prefer us to reach an holistic solution, whereby local authority housing departments become much more heavily involved than at present in finding solutions for people who are looking for accommodation. Although the rental accommodation scheme has been in existence for a considerable period, we are nowhere near having the amount of people that I would like on that scheme in different areas. I would also prefer if people who are in a local authority tenancy arrangement of some kind were not inhibited from taking up employment, as they are in the case of the rent supplement scheme. If such a person in the Dublin area who has a spouse and children takes up employment, he or she runs the risk of losing up to €1,000 a month in rent supplement. It is very hard to get one's foot into the employment market if one is facing such an immediate loss.