Ciarán Lynch (Cork South Central, Labour)
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Question 89: To ask the Minister for Social and Family Affairs if his attention has been drawn to the Central Statistics Office's consumer price index detailed sub-indices report of February 2008 which indicates that rents have increased by 10.5% in 12 months; and when he will increase rent supplement limits to reflect this trend. [12187/08]

Martin Cullen (Waterford, Fianna Fail)
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Rent supplement is administered on my behalf by the Health Service Executive (HSE) as part of the supplementary welfare allowance scheme. Rent supplement is subject to a limit on the amount of rent that an applicant may incur. Rent limits are set at levels that enable the different eligible household types to secure and retain basic suitable rented accommodation, having regard to the different rental market conditions that prevail in various parts of the State. The objective is to ensure that rent supplement is not paid in respect of overly expensive accommodation having regard to the size of the household. There are currently over 61,000 rent supplements in payment. Some 52,000 have been awarded since the current rent limits were set in January 2007. This suggests that the limits are set at reasonable levels at present.

Setting maximum rent limits higher than are justified by the open market would have a distorting effect on the rental market, leading to a more general rise in rent levels. This in turn would worsen the affordability of rental accommodation unnecessarily, with particular negative impact for those tenants on lower incomes, including people in low wage employment. Notwithstanding these limits, under existing arrangements the HSE may, in certain circumstances, exceed the rent limits. This discretionary power ensures that individuals with particular needs can be accommodated within the scheme and specifically protects against homelessness.

In January 2007 a review was completed of the maximum levels of rent which a person may incur and still be eligible to receive rent supplement. The purpose of the review was to inform the process of setting new limits, applicable from January 2007 until 30 June 2008. The review included consultation with the HSE, the Department of Environment, Heritage and Local Government, Central Statistics Office, the Private Residential Tenancies Board and voluntary agencies working in this area. This process ensures that the new rent limits reflect realistic market conditions throughout the country. Arising from the review, rent limits were adjusted upwards, from January 2007, for a number of household types in 14 counties at an annual cost of €13 million. I intend to have rent limits reviewed this year with a view to implementing any revision found to be necessary, from 1 July 2008. A consultative approach will be used to conduct this review.