Mark Daly (Fianna Fail)
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My query relates to the payment of rent allowance directly to persons in receipt of social welfare benefits. This system was changed a number of years ago in order that landlords would no longer receive the rent allowance and that it would be paid directly to social welfare recipients. I have received information from a number of agents that recipients of rent allowance are telling their landlords that their rent allowance has been cut. Of course, landlords are hearing on radio that all manner of cuts have been imposed. The landlord and the agent will often reduce the rent for the social welfare recipient but the social welfare recipient has overstated the amount of the reduction in his social welfare allowance and he is pocketing an extra few bob from social welfare. This is the reason I have raised this matter and I ask if it would be possible to revert to the old system whereby the landlord is paid directly by the Department and in this way the amount of the allowance would be known. The landlord would be paid the rent payable in that particular social welfare area. I know the Minister's office has conducted research on rent payments. An agent contacted the Department of Social Protection office in Tralee and pointed out what is happening in reality, that people in receipt of social welfare payments were receiving the allowance and were telling the landlord that the allowance had been cut so that they could obtain a reduction in the rent of €20 to €40 while the allowance might have been cut by a mere €15. In such a case, the landlord will have reduced the rent substantially but the guy has a profit of €15 a week or a month. This is happening in many towns and I know it is happening in the Kenmare area where landlords are being told that allowances have been cut and that they should cut the rent by €50 in some cases. The recipient is then profiting. In my view, the form should be signed by the landlord detailing the rent amount and this should be sent directly to the social welfare agent in charge of the case file. There are a number of anomalies in the system. The rent is now not paid directly to the landlord but there is a lot of money being wasted which could be used elsewhere by the Department rather than landlords and their agents reducing the rent to social welfare recipients and people making money out of the difference. I suggest the Minister should revert to the previous system whereby the money would be paid directly to the landlord.

Fergus O'Dowd (Louth, Fine Gael)
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I thank Senator Daly for raising this matter. The purpose of rent supplement is to provide short-term support to eligible people 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 scheme is intended as a temporary income support payment and is not designed to be a medium to long-term housing support or a permanent solution to a person's housing needs.

Under the legislative provisions governing rent supplement, the Department's relationship is with the tenant who in turn makes the application for rent supplement and payment is made to the tenant. Rent supplement is specifically for the benefit of tenants to assist them with their accommodation needs. There is no direct relationship between the landlord and the Department in the administration of the scheme.

Under the current arrangements, even with direct payment, landlords must collect the tenant contribution towards the rent, a minimum of €120 per month. The amount of rent supplement payable depends on the tenant's income. In some cases tenants pay only the minimum contribution while in other cases tenants make an additional contribution to their rent based on their financial circumstances. For example, where a person is in part-time employment and receives just 10% of his or her rent directly from the State, the landlord would receive the 10% directly while collecting the 90% from the tenant. Account will be taken of cases where a tenant is in a lease agreement which has a number of months to go before cessation. While tenants will be expected to try and renegotiate their rent, where this is not possible payments at the old rate may continue. However, once the lease has expired the tenant will be expected to find suitable accommodation at or below the new limits in force.

If the Department were to become involved in the negotiations of rental agreements directly with landlords, the efficiency of the scheme would be significantly affected. For example, the Department would potentially have to create a formal relationship with some 96,000 additional clients, the landlords. This would involve greater complexity and significant resources to deal with a new set of third parties. There are no plans to amend the scheme so that rent supplement is the entitlement of the landlord.

It would not be an effective use of resources to have departmental staff negotiating rental agreements for those with a short-term need who generally enter the scheme with an existing tenancy agreement in place and leave again when they re-enter the workforce.

The Senator will be aware that the Government has effectively two initiatives to deal with long-term reliance on rent supplement. The rental accommodation scheme is in operation since 2004 and the new housing policy initiative was announced on 16 June 2011 by my colleagues the Minister for the Environment, Community and Local Government and the Minister of State with responsibility for housing and planning. Both initiatives give the local authorities specific responsibility for meeting the long-term housing needs of people receiving rent supplement. Latest figures show that since its inception, over 37,700 rent supplement tenancies have now been transferred from rent supplement to the rental accommodation scheme and other social housing options.