Mark Daly (Fianna Fail)

I welcome the Minister to the House. An enormous sum of money has been spent on this scheme over the past five years. In her speech to the House earlier the Minister spoke of her amazement at the proposal to pay landlords directly. Previously, rent was paid directly to landlords under this and other schemes but now it is paid to tenants. This has left some curious anomalies in the system which have been pointed out to me by people in Kerry and I am sure Senators from other parts of the country are also aware of them. A tenant can, for example, tell a landlord or agent that his or her rent allowance has been cut and ask for a rent reduction. The landlord then reduces the rent on the basis of information provided by the tenant and in some instances the new rent is actually less than what the tenant is receiving as a rent supplement. A lot of information is circulating among those in receipt of the payment about what is essentially a scam, whereby the rent supplement is actually higher than the rent being paid. This is due to the fact that the rent is going directly to the tenant. There is no safety measure in place such as the agent or landlord informing the Department of Social Protection of the terms of the lease and providing a signed copy of the agreement. In the absence of such a measure, what is happening in some instances is that the form provided to the Department has a rental amount on it that is different from what is being paid to the landlord.

I have raised this issue with staff in the Minister's office and urged them to put mechanisms in place to ensure that information on the actual rent being paid by the tenant is provided by the landlord or agent to the Department. This would prevent the taxpayer from being defrauded under this scheme which will cost €436 million in 2012 and has cost €2.4 billion over the last five years. This is not merely a loophole but a gaping hole in the system. Time and again I have been told by agents that tenants present them with a blank form to sign. The tenants then fill in the form to obtain the maximum amount of rent supplement which, in the case of Cork, is €770 per month and return it to their local social welfare office. At the same time, they are telling landlords they can only afford to pay €500 per month. Landlords are accepting rent of €500 because in this climate, as my colleagues know, they are delighted to get tenants. Rents are falling and landlords know that the best payer at the moment is the Government. This situation is costing the taxpayer tens of millions of euro and over the lifetime of the scheme could cost hundreds of millions. There is no mechanism whereby the amount of rent being paid to the landlord by the tenant is verified by the Department of Social Protection.

I have made the proposal to staff in the Minister's office but have been met with deafening silence. Does anyone want to check what landlords are receiving from tenants? The relationship between the Department of Social Protection and the landlord has been broken. Now the money goes to the tenant and the tenant passes it on to the landlord. There is a huge gap in the system which I have also tried to raise on the Adjournment. I do not see why we cannot fix this loophole because it is costing millions of euro annually. There are many elements to my colleagues' proposals to the Minister but this is a scam. I know it because I used to work in the industry. It is an absolute scam. All it needs is a requirement from the Department of Social Protection that the landlord or the tenant verify the amount of rent being paid. If that was done, we would know that the entire amount of money being paid to the tenant by the Department is actually being passed on to the landlord and that the rental amount as stated by the tenant is the actual amount of rent being paid. That is not the case at the moment. It is not always the case that the tenant is claiming dishonestly but it is happening a lot. If it is happening in say 10,000 cases, which is 10% of the total, that adds up to €43 million.

I ask the Minister to raise the matter in the Department and determine how to verify that the tenant is actually being charged the amount of money he or she stipulates is the rent for which a supplement is being claimed.