Questioning Burton | On the reasons for the cuts to rent allowance limits in Wicklow

Stephen asked the Minister for Social Protection:

if she will publish the report on the rental sector prepared by her prior to the announcement of changes to rent supplement rates;

if any other analysis of the sector was done prior to announcing the change to rent allowance; if she will publish same;

the reason County Wicklow has seen the biggest drop in the rent allowance rates payable; the measures that were taken to communicate these changes to landlords and tenants;

the supports being offered to assist tenants now faced with attempting to renegotiate their rent, such as mediation;

and the provision in place for persons who fail to renegotiate their rent and fail to find an alternative suitable rental home and are thereby threatened with homelessness.

Ref No:   5111/12

Minister for Social Protection (Joan Burton T.D.):

Rent supplement provides 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. Since 2005, rent supplement expenditure has increased from €369 million to a provisional outturn of €503 million in 2011. The number of persons claiming the allowance increased from almost 60,200 persons in 2005 to over 96,800 at end 2011, a 61% increase.

As the Department currently funds approximately 40% of the private rented sector it is essential that State support for rents are kept under review, reflect current market conditions and do not distort the market in a way that could increase rent prices for others, such as low paid workers and students.

New maximum rent limits came into force on 1 January 2012 and are based on the most up to date market data available.  The emphasis of the rent limit review was to ensure that maximum value for money for tenants and the taxpayer was achieved whilst at the same time ensuring that people on rent supplement are not priced out of the market for private rented accommodation.

Analysis of the rental market for Wicklow carried out by my Department found that rental prices for the Bray area were having a distorting effect on the overall analysis for Wicklow.  Accordingly for the purpose of establishing limits for the county, the Bray area was excluded and will now be managed separately.

Officials in my Department are in the process of drawing up local limits for the Bray area. This will ensure that tenants for the full county may continue to source accommodation within the prevailing market rates and ensure the best value for money is achieved for the taxpayer.

As existing claims come up for review or when an existing lease expires, they will be reassessed using the new limits. Where a claim is under review and the rent is above the new maximum limit the customer is being asked to contact the landlord to renegotiate the rent.  Where a landlord does not agree to reduce the rent to the new rates departmental officials will discuss the options open to the tenant up to and including seeking alternative accommodation. It is accepted that in limited circumstances rent supplement recipients may be forced to secure alternative accommodation. Such applicants will be afforded reasonable time periods to secure new accommodation. Department officials administering rent supplement will continue to ensure that the rent supplement recipients’ accommodation needs are met. There will be no incidence of homelessness due to these changes.

I will be publishing the rent limits review report in the coming days. [ENDS]