Richard Bruton (Dublin North Central, Fine Gael)
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Question 192: To ask the Minister for Social and Family Affairs the new ceilings for rents under the rent supplement scheme; the guidance she is issuing to tenants who are expected to secure an 8% rent reduction from landlords, particularly in contracts which do not provide for unilateral requests for a rent review; and the protections she envisages for tenants where landlords refuse. [17107/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The purpose of the rent supplement scheme 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.

In recent years a significant number of people have come to rely on rent supplement for extended periods. There are currently almost 84,000 people in receipt of rent supplement, an increase of 40% since the end of December 2007.

Rent supplements are subject to a limit on the amount of rent that an applicant for rent supplement may incur. Rent limits are set at levels that enable different types of eligible households to secure and retain basic suitable rented accommodation, having regard to 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 and market conditions.

Setting or retaining maximum rent limits at a higher level than are justified by the open market can have a distorting effect on the rental market, leading to a more general rise in rent levels and in landlord income. This in turn may worsen the affordability of rental accommodation unnecessarily, with particular negative impact for those tenants on lower incomes.

Maximum rent limits are prescribed in regulations and are time limited so that they can be adjusted in the light of rent levels generally. The most recent regulations cover the period to 31 December 2009.

The recent Supplementary Budget provided for changes to be made to the rent supplement scheme. One of the measures being introduced is the reduction in the maximum level of rent supplement payable by the State in respect of all new tenancies or on renewals of tenancies. The limits will be reduced by up to 6% to 7% on average, ranging up to 10%, depending on the geographical area and household size and by reference to an analysis of rent supplement and the Private Residential Tenancies Board rent data as well as the downward trends in private rents as recently published by the CSO. Trends in the private rent sector indicate that rents have fallen considerably in the past 12 months.

The new maximum rent limits will be prescribed in regulations to be made in the coming weeks and to take effect from 1 June 2009. These regulations will be laid before the Houses of the Oireachtas/Dail.

Payments currently being made to existing rent supplement tenants are being reduced by 8% and the minimum contribution payable towards rent is being increased from €18 to €24 a week. While tenants are contractually obliged to pay the rent agreed to in their lease, it is expected that landlords will decrease the rent in recognition of the fact that rents have fallen generally and that there are now a large number of vacant rental properties nationally. It is essential that state support for tenants does not give rise to inflated rental prices and overcharging by landlords.

Existing recipients of rent supplement will be advised by letter in advance of the change being made to their rent payment and this communication can be shown to landlords as evidence of the revised rent supplement in payment in individual cases. Landlords will be advised through advertising in the print media of the general reduction in rent supplement payments.

It is also open to any rent supplement recipient in dispute with their landlord over the level of rent being charged to refer the dispute to the Private Residential Tenancies Board (PRTB) for mediation or adjudication when a rent review is due.

Community Welfare Officers have discretion to provide assistance where exceptional circumstances exist in any individual case e.g. where homelessness might result due to the inability of a person to meet their rent payment.

The Department intends to mail-shot up to 94,000 people whose entitlement to rent or mortgage interest supplement will be reduced automatically. The letter will advise people of their existing rate of payment and the new rate payable from 1 June 2009. The mail-shot will issue the week commencing 25 May 2009.