Thursday, 28 June 2012
Topical Issue Debate
Rent Supplement Scheme
The Minister is trying to reform the rent supplement scheme. Some of the changes made in the budget proved to be problematic for people availing of rent supplement in Dublin South-East and across the country. As part of the budget, new upper limits for the rent supplement scheme were published. They make it extremely difficult for applicants to find suitable accommodation across the country and particularly in Dublin 2 and Dublin 4, where there is strong market demand. The changes will also have a significant impact on those in my constituency who have found suitable accommodation that met the old criteria but which is no longer acceptable as it exceeds the new limits. Exceptional market demand in my constituency means the price of one-bedroom flats ranges from €700 to over €1,000 per month. This is far in excess of the rent supplement limit of €475 for all of Dublin.
The new limit represents a reduction of approximately 10% on the previous threshold and is well below the rental price of even a bed-sit or studio apartment in many areas of my constituency. If these changes are implemented, they will force people in receipt of rent supplement out of certain areas in Dublin, even though they may contain numerous social housing units. People will be driven from the areas in which they grew up and raised their own families and in which many of their loved ones still reside. Others may be forced into illegal arrangements whereby they agree to top up their rent by way of under-the-table payments to their landlords.
Nevertheless, I welcome and accept the necessity of the Government's efforts to reform the rent supplement scheme. It has grown into something far larger and more all-encompassing than was originally planned. I also welcome the moves to place the scheme under the joint control of the Department of the Environment, Community and Local Government and the local authorities, which will allow it to operate in a far more effective manner. Rent supplement should not function as a poverty trap and a disincentive to take up employment.
As a consequence of campaigning by families currently in receipt of the domiciliary care allowance, the Government has agreed to review the threatened cuts to that payment. This development is most welcome.
-----put together an organised protest, people who are affected by the cuts to the rent supplement scheme are also getting organised. I hope the Government will respond in the same way to their campaigning efforts.
The effect of the reduction in rent caps is that people are being threatened with eviction and driven into the homelessness services. The Government claimed it would force landlords to reduce rents, but that is not happening. Instead, landlords are giving tenants notice when the latter indicate that a reduction in rent is being sought in accordance with the reduced rent supplement thresholds. People are being put in terrible situations. In Dún Laoghaire, for example, those who present themselves to the council to declare themselves homeless are being told they will be put in a hotel in Drumcondra or in Rathdrum in County Wicklow. Families are being separated, which is deplorable. In other cases, people are being forced, as Deputy Kevin Humphreys observed, to make under-the-counter payments, with the landlord lying to the authorities about the actual rent being charged. In addition, there are many anomalies in the system whereby foster children, for instance, are not recognised when assessing eligibility for rent supplement. In addition, people who take up part-time work are losing their allowance, which acts as a disincentive to employment.
I call on the Minister for Social Protection, Deputy Joan Burton, to reverse the reductions in the rent caps. She should concentrate on doing what should be done, namely, taking some of the tens of thousands of vacant properties throughout the State into local authority control in order to meet people's housing needs. That is far preferable to forcing them into homelessness.
I am taking this Topical Issue matter on behalf of the Minister for Social Protection, Deputy Joan Burton, who conveys her apologies to the Deputies for being unable to respond in person. 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. The overall aim is to provide short-term assistance, not to act as an alternative to the other social housing schemes operated by the Exchequer.
There are approximately 93,000 persons in receipt of rent supplement, for which the Government has provided a sum of €436 million for 2012. New maximum rent limits were introduced from 1 January 2012, following analysis of the most up-to-date market data. The emphasis of the rent limit review was to ensure maximum value for money for tenants and the taxpayer, while also ensuring that people on rent supplement are not priced out of the market for private rented accommodation. In the case of each county, all major urban population centres were tested as part of the review to ensure rent supplement applicants would be able to access temporary housing arrangements while seeking employment opportunities.
The revised rent limits are applicable to new rent supplement tenancies from January 2012 and existing tenancies on review. Latest figures show that approximately 23,000 claims have been awarded in 2012, indicating that it is possible to secure accommodation within the revised limits. The Department will continue to monitor rent levels throughout the country. Rent supplement is not generally paid where the rent charged for the accommodation is above the relevant maximum rent limit. However, departmental officials have flexibility to make payments above these limits where there are special housing needs related to exceptional circumstances. This would apply, for example, in the case of a person with a disability living in specially-adapted accommodation or homeless persons whose housing needs cannot be met within the standard terms of the rent supplement scheme.
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. Departmental officials dealing with rent supplement tenants will continue to ensure their accommodation needs are met. I assure the Deputies that there will no incidence of homelessness due to these changes.
I thank the Minister of State for his response. I ask him to convey to the Minister, Deputy Joan Burton, the need for greater flexibility. In some of the areas I represent, which include Ringsend, Sandymount, Pearse Street, Ranelagh and Rathmines, the very high levels of unemployment mean there is exceptional demand for the rent supplement scheme. Many of those seeking to rent homes in these areas grew up there and have family support nearby. It is simply not possible, however, to secure accommodation with the maximum allowance. Rent on a two-bedroom unit in parts of south-east Dublin ranges from €1,500 to €2,000 per month, which exceeds even the limit for two adults and three children under the scheme, which is €950.
An effective reform would be to transfer control of the scheme to the local authorities, with a differential rent scheme whereby the council makes up the difference with the help of an allocation from central government. Such an initiative would allow people to continue living within their own communities and also prevent rent supplement from serving as a poverty trap.
If the Minister of State's response reflects the best that the Government is prepared to do, there will inevitably be protests by those affected by these changes. The reality is that in many parts of Dublin - not just Dublin 2 and 4 but also Dún Laoghaire, much of south County Dublin and elsewhere - and in other cities such as Galway and Waterford, it is simply not possible to secure suitable accommodation within the new rent caps, particularly for families with two or more children. Before I came into the Chamber for this debate, I checked daft.ie to see what was available in Dún Laoghaire for the maximum threshold of €950. There is not a single three-bedroom house available for that price. The caps must be raised if people are to secure accommodation that fits their needs.
Despite the Minister of State's claims to the contrary, people certainly are being forced into homelessness. I brought a person to Leinster House last Thursday who is homeless as a result of the reduction in the rent allowance cap. This person is now separated from two of her children and is sleeping on a sofa in her grandmother's house, in which an elderly and ill great-grandmother also resides. People should not be forced into such desperately overcrowded conditions. Other people are being told to go to hotels in Drumcondra even though their children go to school in Dún Laoghaire. That is simply not acceptable. Will the Minister of State ask the Minister for Social Protection to raise the caps as a short-term measure in order to ensure people can find affordable accommodation? In the longer term, some of the thousands of vacant properties throughout the country should be placed under the control of the local authorities and used to provide secure, affordable housing where people will not have the threat of eviction hanging over their heads.
The new rent limits were introduced in January 2012 and are applicable to all new rent supplement applicants and to existing recipients upon review. Rent limits were previously adjusted effective from June 2010. The purpose of the review is to ensure availability of accommodation and supplement tenancies, but not to provide rent supplements to tenants with access to housing in all areas. Approximately 23,000 rent supplement claims have been awarded this year up to 15 June. Those claims include new claims, change of address and change of landlord cases. Where a claim is under review, which was Deputy Kevin Humphreys's point, 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, departmental officials will discuss options open to the tenant, up to and including seeking alternative accommodation. Departmental guidelines to officers administering the rent supplement state that where negotiation with the landlord fails, the then rent supplement may continue to be paid for a period of up to 13 weeks at a higher rate. However, once the lease has expired the tenant will be expected - it is important to put this on the record-----
Departmental officials dealing with rent supplement tenants will continue to ensure that their accommodation needs are met. There will be no incidence of homelessness. The Department's intention is to return rent supplement to its original purpose as a short-term income. This will be achieved through the rental accommodation scheme and the Government's new housing policy. Since 2005, local authorities have transferred a total of 39,910 rent supplement receipts to the rental accommodation scheme and other social housing offices.