Joan Burton (Dublin West, Labour)

-----in regard to people, the buy to rent landlords, who may be in difficulty with their mortgages? It should be noted that the banks have been capitalised at very great cost to the taxpayer. It is not the job of the Department of Social Protection to fund the mortgages of buy-to-let landlords. We are sympathetic to their problems but the implication in the Sinn Féin motion is that we should in some way arrange to subsidise buy-to-let landlords when in fact the taxpayer is already putting very significant committed funds into the banks to restore the funding basis of the banks and to deal with the mortgage crisis.

The points raised by Sinn Féin are very interesting but as for their economic impact and the fairness of the proposals vis-À-vis the ordinary taxpayer who may not be a landlord at all, those proposals need to be thought out quite carefully. A total of 25,000 rent supplement claims, which represent more than 27% of total claims, have now been awarded in 2012. This is a strong indication that accommodation can be secured within the new limits. While I acknowledge there are certainly difficulties in particular areas, the staff in the community welfare services of the Department are working with tenants where special circumstances exist to offer assistance in individual cases. These new limits will not cause homelessness for anyone in receipt of rent supplement. The maximum rents may be exceeded in certain circumstances, for example, in respect of people with a disability in specially adapted accommodation or homeless people whose needs cannot be met within the standard term of the rent supplement scheme. In addition, local rent caps can be set lower than the prescribed maximum limits where the local market conditions dictate, thus ensuring that recipients are provided with suitable adequate accommodation.

The next national review of maximum rent limits is due to be completed before June 2013. I say to the Sinn Féin Senators that what has happened so far indicates that we have a capacity to get better value for money in respect of this scheme for hard-working taxpayers. This is a legitimate concern as well as concern for landlords. I ask Senator Cullinane to bear this in mind.

The Department of Social Protection through its homeless persons unit and the asylum seekers and new communities unit, provides assistance to people in sourcing the most appropriate accommodation available. I refer to the statistics for last year and the previous year. In 2010, some 97,000 individuals and families were in receipt of rent allowance with 96,000 individuals and families in receipt last year Just over 60% of these were people of Irish nationality and the remainder comprised people who have come to Ireland. Senator Mooney will be well aware that people coming into a country are, generally speaking, among the hardest working because they are moving to a new country in expectation of working hard and making a new life for themselves and their families. We have to give serious consideration to whether we are creating a very serious employment trap not just for Irish people, but also for people who have come to Ireland, in that the rent supplement inhibits transfer to employment because in some cases it is such a significant portion of a person's income that to lose it means he or she is deterred from taking up employment. This needs to be considered very carefully.

Senators will know that the officials in my Department and the community welfare officers go out of their way to help people who have problems with homelessness. On the point of the Department negotiating directly with landlords, the people on social welfare are our clients. If the Department were to take on the landlords as well, this would be an extra 92,000 people or businesses to deal with and the Department does not have the resources to do this. I have emphasised that reform of the rent allowance scheme is required. It needs to be changed from what it has become and what it was never meant to be, a long-term housing assistance. It was meant to be short-term assistance for people who had lost their employment. Senator Ó Clochartaigh referred to such reform. What is envisaged is that the scheme would transfer to the local authorities who have housing departments and who are well equipped to deal with landlords and the overall provision of accommodation, as part of the general provision of services within a county or a city area.

Reference was made to top-up payments to landlords. Rent supplement is calculated to ensure that the person, after payment of rent, has an income equal to the basic supplementary welfare allowance rate, less a specified minimum contribution which recipients are required to pay from their own resources. Where a person has an additional income above the rate of supplementary welfare allowance, he or she is allowed in certain circumstances to top up the rent as the additional income will mean there is sufficient income to meet basic needs after paying the rent. A second type of top-up payment can occur where the application to the Department declares a rent lower than that actually being charged by the landlord. Any instance of false declarations should be reported to the relevant Departmental official administering the scheme who has specific legislative powers to deal with such offences. The recent Social Welfare Bill introduced powers of inquiry for appropriate staff such as social welfare inspectors to formally request and oblige landlords to provide information in respect of their rent supplement tenants, principally to verify the agreed rent, the identity of the tenant and the existence of the tenancy and to ensure the person in receipt of the allowance is using the accommodation. This measure will improve both the governance and oversight arrangements in place and it will complement existing compliance arrangements between the Department and the Revenue Commissioners. This is to ensure that landlords report such income for taxation purposes.

My intention is to return rent supplement to its original purpose, which is to provide short-term income support for those temporarily unemployed. The rental accommodation scheme has been in operation since 2004. The Department of the Environment, Community and Local Government is working on the housing assistance payments scheme. Collaborative interchanges between Departments and organisations, such as housing authorities, depend for success on a synchronisation of information technology. The transfer to a housing assistance payment scheme would allow for direct rent payments to landlords by the local authority. Differential rents will be set and collected by the local authority and this system applies currently to local authority tenancies. It is anticipated that it will be a condition of tenure that the tenant enters into a household budgeting facility arrangement with rent deducted at source by An Post from the tenant's welfare payment. This is an important initiative which will ensure that the rent is paid up to date. Whether a rent supplement tenant or a local authority tenant, a sign of serious economic difficulty in a family is that people fall behind with their rent. I want a system like that in order that tenants will not be able to opt out of paying the rent unless they have, for some reason, the specific permission of the local authority. I have listened to Members from both Houses say they are concerned at the level of local authority arrears because of the way the system is structured. I am working with the Minister for the Environment, Community and Local Government and the Minister of State with responsibility for housing on a scheme that transfers rent supplement back to, as was intended, a short-term support and puts in place longer-term structures, through the medium of the local authority, to assist those who need accommodation and help with housing. Members will be aware that in many counties people are on rent supplement for very long periods. If this had been arranged via the local authorities, we would probably have found, for most of those people, a long-term local authority provision either through local authority renting or, as was traditional, through the local authority building and developing or working in conjunction with housing agencies.