Ciarán Lynch (Cork South Central, Labour)
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Question 116: To ask the Minister for Social and Family Affairs if her attention has been drawn to the Central Statistics Office's consumer price index detailed sub-indices report of March, 2008 which indicates that rents have increased by 10.4% in 12 months; and when she will increase rent supplement limits to reflect this trend. [18619/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Rent supplement is administered on my behalf by the Health Service Executive 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.

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.

The current rent limits were set in January 2007 following a review of the maximum levels of rent which a person may incur and still be eligible to receive rent supplement. The review informed the process of setting new limits applicable from January 2007 until 30 June 2008. Arising from the review, rent limits were adjusted upwards for a number of household types in 14 counties at an annual cost of €13 million.

A review of current rent limits is now under way . A consultative process is being used to ensure that the views of all relevant parties are sought and taken into account in the process.

This includes 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 will help ensure that the new rent limits reflect realistic market conditions throughout the country. Any adjustments to rent limits, arising from this review, will be effective from 1 July 2008.