Joint Committee on Education and Social Protection debate -
Wednesday, 15 May 2013

Rent Supplement Scheme: Discussion with Department of Social Protection

Chairman

I welcome officials from the Department of Social Protection who will make a presentation on the rent supplement. I welcome Ms Helen Faughnan, Ms Jackie Harrington and Ms Lisa Doyle.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give this committee. If a witness is directed by the committee to cease giving evidence in relation to a particular matter and the witness continues to so do, the witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and witnesses are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. The opening statements submitted to the committee will be published on the committee website after the meeting.

Members are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

Ms Helen Faughnan

I thank the committee for the opportunity to appear before it today on the matter of the Department's rent supplement scheme. I propose to update the committee members on rent supplement matters in general and to address the specific issues raised by the committee specifically on rent limits, rent deposits and the processing times.

The Department's primary role in this area is the provision of income support through the rent supplement scheme for which the Government has provided a sum of over €403 million for 2013. The purpose of rent supplement is to provide short-term income support to eligible tenants 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.

There are currently approximately 86,000 rent supplement recipients, of which more than 54,000 have now been in payment for more than 18 months, representing over 60% of the total. The Department provides on an ongoing basis relevant details of these long-term claimants to the Department of the Environment, Community and Local Government, with a view to transferring them to the rental accommodation scheme, known as RAS.

Budget 2012 provided for a number of changes to the rent supplement scheme including a review of the maximum rent limits which were set after an analysis of the most up-to-date market data available. During 2012, approximately 48,700 rent supplement claims were awarded at the revised limits. As the Department currently funds almost 30% of the private rented sector, it is essential that State support for rents is continually kept under review, that it reflects current market conditions and that it does not distort the market in a way that could increase rent prices for others such as low-income workers. The Department acknowledges that the rental market has changed since the limits were revised. It is currently carrying out a review of the current maximum rent limits. It is expected that these new limits will be introduced in June of this year.

The review process includes an analysis of the private rental market using publicly available data sources as well as consultation with other bodies and organisations involved in the area of housing support.

The emphasis in a rent review is on ensuring maximum value for money for tenants and the taxpayer is achieved, while at the same time ensuring people in receipt of rent supplement are not priced out of the market for quality private rented accommodation.

Customers' minimum contributions were also increased, effective from 1 January 2012. The adjustment aligns more closely the minimum contribution payable by households under the rent supplement scheme with rents payable under the rental accommodation scheme, RAS.

I shall discuss the issue of rent deposits. An exceptional needs payment may be made under the Department's supplementary welfare allowance scheme to help meet the cost where the applicant is unable to do so out of his or her resources. There is no automatic entitlement to an exceptional needs payment. Each application is determined based on the circumstances of the case, taking account of the nature and extent of the need identified. All recipients of rent supplement do not receive a rent deposit. In 2012 approximately 5,600 rent deposits were paid, totalling approximately €2.7 million. Every effort is made to ensure multiple rent deposits are not paid to the same person. Applicants are advised that the deposit is refundable. Rent deposits are recouped by the Department, but details of this refund category are not currently maintained specifically. The Department is reviewing the approach to rent deposits and the mechanisms in place for recording recouped deposits. The refund of rent deposits may not always be applicable depending on individual circumstances. For example, if the landlord or tenant terminates the tenancy, the tenant can use the returned deposit to secure a new tenancy. There is churning and rent supplement tenants tend to move from one unit of accommodation to another.

On foot of the commitment in the programme for Government to introduce a tenancy deposit protection scheme, the Minister of State responsible for housing and planning, Deputy Jan O'Sullivan, asked the Private Residential Tenancies Board to commission research on same. The final report and recommendations were submitted to her last November. The report is detailed and comprehensive and identifies a number of options for delivering on the programme for Government commitment, all of which present particular challenges. The Department of the Environment, Community and Local Government is in the process of critically examining the report with a view to identifying the best way to address the issue of tenancy deposit protection. It intends to provide for the establishment of an appropriate scheme in the context of the consideration by the Oireachtas of the Residential Tenancies (Amendment) (No. 2) Bill 2012. The Department of Social Protection welcomes the proposed establishment of a deposit protection scheme that will protect the funds of the State and individuals. The current process of issuing rent deposits under the exceptional needs payment scheme will be reviewed in the context of the new scheme.

The Government has two initiatives to deal with long-term reliance on rent supplement. The rental accommodation scheme has been in operation since 2004-05 and the more recent housing policy initiative. Both initiatives give the local authorities specific responsibility for meeting the long-term housing needs of persons in receipt of rent supplement. Officials in the Department of Social Protection work closely with those in the Department of the Environment, Community and Local Government to progress the transfer.

To support local authorities in the collection of rents, the Department of Social Protection introduced, in the Social Welfare Act 2012, an amendment to make it a requirement that local authority tenants who consented to their differential rents being deducted under the household budget facility could not withdraw their consent without the agreement of the local authority. The household budgeting scheme facilitates a person in having a specified amount of his or her social welfare payment deducted by An Post to pay certain utilities such as the gas company, the ESB and local authorities.

I trust that my presentation has been of assistance to the committee. I am happy to answer whatever questions it may have.

Chairman

As a vote has been called in the Dáil, I propose that we suspend the sitting until after it has taken place. Members can ask questions when we resume. Is that agreed? Agreed.

Sitting suspended at 1.35 p.m. and resumed at 1.50 p.m.

Chairman

I will now take questions. I have the agreement of spokespersons to call Senator Marie Moloney first as she is due to speak in the Seanad.

Senator Marie Moloney

Thank you, Chairman. I thank the departmental representatives for attending. I am the person who requested that they attend to brief the committee on a number of issues, one of which is the important matter of rent caps. My firm belief is that the rent caps are too low across the country. Rents are demand-led. I will speak about the area I know best - Killarney - where there is a huge demand for rental properties. Rents have decreased somewhat but not significantly. The cost of renting a property in Killarney is still very high. In the guide for the Kerry area a single person is asked to stay below the cap of €84 per week. Nowhere in Killarney town will one find accommodation on offer for €84 per week.

We are forcing tenants to give a top-up in cash to their landlords. Most people I have dealt with are operating through this scheme. They are getting the landlord to say the rent is €84 and then top it up with cash. No one can deny that is going on across the country. A landlord will make €30 that he does not have to declare for tax purposes as it is cash under the table.

To get decent accommodation in Killarney on the rent allowance scheme, one would have to go 15 miles outside the town. Many people do not have cars but they are being forced out there to try to find rental accommodation within the cap limits. I understand there is a review under way of the caps in the allowance. What will the review do? It is impossible to get information from the Department on the review and the new limits. What does the Department propose for rent limits?

Victims of domestic violence are finding it impossible to access rent supplement because they have a house in their own name. This is driving them back into the home from which they had to leave due to domestic violence. The Seanad had a useful debate on this matter last week and this was one issue that was raised.

I made a suggestion on rent deposits to the Minister of State, Deputy Jan O’Sullivan, who ran it past the Private Residential Tenancies Board, PRTB, and which will be introduced as an amendment in the Seanad to the residential tenancy Bill. Over the past six years, the State has paid out €30 million in deposits for rental accommodation, none of which has been recouped. The Minister agreed with me in the Seanad about this although the representatives do not appear to agree with me. If money has been recouped, perhaps they could tell us how much. I understand people move on but the money is not paid back to the Department. I have suggested that, instead of handing out cash, we introduce a guarantee scheme so if the rented property was damaged, the rent was in arrears or the tenants leave, the Department would then give over the deposit to the landlord but not beforehand. This would also mean the Department could use the money rather than having it sit in landlords’ accounts.

In the presentation, the Department stated it did not have statistics. Why is that the case? Surely it is the Department’s job to have statistics and make them available to us. The Department stated a rent supplement application can be assessed in five days. I have dealt with many applications but have never seen one assessed in five days. As a matter of fact, it can be five weeks and in some cases five months. It is very disingenuous of the Department to make this claim about assessing an application in five days. Surely the Department has statistics from its offices around the country to show that is not the case. The discretionary rent supplement is also gone because there is a central rent office. We should restore that aspect to the local community welfare officer, who can have discretion about whether accommodation within the caps can be found.

I am sure other members have points to raise, but I will speak again later if there is time. I would appreciate the Department's comments on the issues I have raised.

Deputy Aengus Ó Snodaigh

I, along with other committee members, have raised the top-up or under-the-counter payments with the Minister on several occasions. The answer I usually get is that the Department has no record of this being a wide-scale practice. It might not have records of it because the clients paying this top-up payment do not want to come forward as they are afraid of losing an apartment or a house they have managed to secure despite the shortage. They will only complain to Deputies or councillors at constituency clinics.

This practice has got much worse in recent years, given the shortage of properties available, particularly in Dublin. The only solution, which I have suggested to the Minister, is that rent supplement and housing assistance payments be paid directly to the landlord. I understand changes are due to be made to the rent supplement scheme and the housing assistance payments, but if the Department has any influence, it should ensure those payments are made directly to landlords. There would be several advantages in doing this. First, it would cut out the top-up payments. Second, it would ensure the landlord gets the money and it is not abused like in the case of a chaotic drug user who would be tempted by having the rent cheque in their pocket. Third, it would also facilitate the registration and legal compliance of landlords.

When the changes were made to the maximum rent limits, the Department stated an analysis was done. Other members mentioned Killarney and Galway, where there are also high rents, but in Dublin, which I know best, the new maximum rent limits did not reflect what was happening on the ground in any shape or form. It has contributed to chaos for many people. I am not one who wants to subsidise private landlords as I believe the State should be putting most of this money into building social housing. I am not suggesting we should give private landlords more than they deserve, but the Department claims it was trying not to distort the market. In some ways, it was distorting it downwards with many landlords opting out of making their properties available to social welfare recipients. This, in turn, contributed to fewer properties being available to rent. If one wants proof of how few properties are available at present, Dublin City Council now cannot source properties for the rental accommodation scheme. It is dire and has forced many people into chaos. Hopefully, the Department will have seen sense and when it is analysing the figures again, it will move the maximum rent limit upwards for a temporary period until the housing assistance payment is introduced, which will be a significant change. Does the Department have any details of when the housing assistance payment scheme will be introduced? What areas have been suggested as pilot schemes and for how long will they go on?

I know of some cases where people have had difficulties in getting deposits back. In some cases where the landlord’s property has been foreclosed on by the banks, the tenant’s deposit has been lost. It is with the bank.

We are finding more and more of that. One will find that when all of these buy-to-let properties are being repossessed by the banks in the next year or so that the deposit disappears with them because the tenant is the smallest creditor. I urge the Department to be aware of that and to be aware when people come looking for a second deposit that they lost the initial one through no fault of their own. The suggestion made regarding a guarantee might be a quicker way of dealing with it and might progress rent allowance applications more quickly.

Chairman

Could Ms Faughnan go through those questions?

Ms Helen Faughnan

With regard to Senator Moloney's queries, we determine rent limits by using the most available data sources to ascertain both the market trends and current asking prices for the various one, two and three-bedroomed properties throughout the country on a county-by-county basis. In particular, we have access to the Private Residential Tenancies Board, PRTB, databases. A departmental employee is on the board of the PRTB. We also consult leading websites that advertise properties for rent. The bonus of being able to access the PRTB data means that we know the actual rents being paid rather than the asking prices on the rental websites. We also use the CSO rental indices and local knowledge. As part of the rent review, we consult with many organisations working in the housing sector including local authorities, the Simon Community and Threshold. Departmental staff have built up a huge amount of expertise in carrying out these reviews over the past number of years. We are aware that the market is changing substantially, which is why we are carrying out our current review. We hope to have the new rent limits available with effect from June 2013. They were supposed to come in from July but we have intensified the work and are bringing them forward by a month. We should have our report completed at the end of May and the new limits should be available from June. The report and how we came about the data will be published on the Department's website as well.

Senator Marie Moloney

Could Ms Faughnan give us any indication of the new limits today?

Ms Helen Faughnan

We do not have them. We are still in the process of working them out and checking the data. We would look at a county but would also go into detail because there are distortions with areas near a big urban centre or attached to a university or areas with a considerable amount of employment. That distorts the availability as well.

It is an income support payment. This was set up as a short-term measure so that we are the helping hand for somebody who has been renting and now finds himself or herself unemployed. We hope that person will get back into employment and be able to pay their own rent. Due to the recession, our short-term scheme has evolved into a longer-term scheme.

Senator Moloney also spoke about domestic violence. We offer specific care and attention to people who are suffering either domestic violence or intimidation, which, unfortunately, has become a feature of some housing areas. Where cases of domestic violence arise, that person will be helped to get accommodation away from that situation even if they have a share in the house. This is where the discretion of the former community welfare officer arises. I would be most concerned if cases are not being looked after and I ask the Senator to bring such cases to my attention because we will definitely look into them. That would be a top priority for us in terms of making sure that people are looked after.

Senator Moloney mentioned the different rent caps in Killarney. I do not have the specifics for Killarney but in the south Kerry constituency, the evidence available to us is that there are properties available in or around the rent limits there. We have a concern that people are telling us about the top ups, to which Deputy Ó Snodaigh referred. Unfortunately, we can only act on the evidence presented to us. If somebody tells us that the landlord is not willing to engage, our duty of care is to the tenant. We want to engage with the tenant to ensure that they can seek accommodation. I reiterate that we cannot make all accommodation available in all areas for customers. We will not offer the full spectrum of choice. The same applies to the local authorities. Some people want to live in a specific area but this depends on availability. If there is considerable demand for accommodation in that area, we may not be able to facilitate the person within the rent limits.

We have a duty of care to the taxpayer to ensure that we are getting best value for money. We are a big player in the rental market with a stake of about 30% so in terms of ensuring value for money, we cannot keep upping the rent limits because landlords will follow the trend. When we set the limits in the 2010 rent review, there was a 4% weighted average reduction in the rents. In effect, we are setting the bar. Landlords declare rent to the PRTB and the Department and the PRTB send on that data to the Revenue Commissioners. It is fraud if somebody-----

Senator Marie Moloney

The problem is that they are declaring the rent minus the top-up.

Chairman

Senator Moloney can come back when the other questions are asked.

Ms Helen Faughnan

We appreciate that it is an issue but our hands are tied if the tenant does not come forward to let us know. Under a recent Act, our social welfare officers have powers to ensure that if they are doing a check on a landlord, that landlord must declare actual rents. It is an offence if they are not declaring the right amount. These powers are available to our special investigation unit and our staff to enable them to improve that situation.

Senator Moloney mentioned the recoupment of deposits. We are aware of the deposits that are being paid. To put it into context, approximately 5,600 deposits were paid in 2012. From talking to NGOs, these are a key support, particularly to help people avoid homelessness. It helps people who need accommodation but do not have the resources, particularly those on social welfare or HSE payments, to save the money for a deposit. In 2012, approximately 48,700 rent supplement claims were awarded so the amount of deposits issued is a very small percentage at approximately 11%. The corollary of that is that 43,100 new awards did not receive a deposit. I accept the Senator's query about whether this is a circular process whereby a deposit must be made available. We agree that there are better uses for this money and welcome the scheme that the Minister of State with responsibility for housing and planning is looking at putting in place. We will be looking at the rental deposits scheme when this protection scheme comes into play.

The community welfare service and the supplementary welfare scheme transferred back into our Department with full effect from October 2011 and refunds are recorded under the general heading, supplementary welfare allowance scheme. In 2011, the amount recorded as refunded under the scheme was approximately €1.1 million and last year, it was more than €854,000. That is not broken down in terms of a possible recoupment under BASI payments, rent supplement or ENP deposits but we are going to look at that to try to ring-fence it in order that we are able to identify the different recoupment methods with our accounts branch.

With regard to processing times, because Senator Moloney's constituency fits into one of the divisions for which I have responsibility, I am concerned if rent supplement claims are taking five months to process. I might have a chat with her afterwards.

Senator Marie Moloney

It certainly would not be five days.

Ms Helen Faughnan

Prior to attending the meeting, we checked around the country to see if all the documentation is received and completed, whether rent supplements are processed fairly quickly and definitely within two to five days. A rent supplement form is not straightforward. There are many elements to it because we need the household or family details, including whether there are children in the house, the income details of the claimant and his or her spouse or partner, savings, third party details, the details of the property being rented, details of the landlord, including his or her tax reference number, and a housing needs assessment, and we need to know whether the person meets the habitual residence condition. By its nature, it is a detailed process but if all the elements are there, the decisions are made quickly. The issue is when some of the elements are missing and it is up to the client to come back with them. To try to assist in the processing of all of this, there used to be a rent pack. Having taken feedback from customers and NGOs, last August, a new rent supplement application form was produced. It is much more streamlined and there is a tick box to remind customers, employers and landlords of the different elements they have to complete. As a result of that form, the number of incomplete application forms has dropped. We are getting the completed application forms in and that is helping the processing times.

With regard to discretion, I assure the committee that the people processing rent supplement claims are former community welfare officers. The discretion remains and they have a huge amount of local knowledge. While we have rent limits, in some areas the rent paid might be less because the officials are aware in the area that accommodation is available at less than the rent limit amount. If somebody has a disability in the household or there is a specific case of concern, there is a small amount of discretion.

I refer to rent supplement and landlords. If the tenant comes to us and says he or she wants the payment made directly to the landlord, we will facilitate that. Approximately 20% of rent supplement payments are paid currently to a person other than the tenant. In some cases, a person acts on behalf of the tenant but the rent supplement scheme is designed specifically for the benefit of tenants to assist them with short-term accommodation needs. If we were to start paying landlords directly, this would create a new relationship between them and the Department. Currently, that would mean up to 86,000 additional clients and that is not on the cards for us but under the housing assistance payment, HAP about which Deputy Ó Snodaigh asked, it is planned that the payment will issue directly to the landlords because currently under the rental accommodation scheme, that is what happens. However, the rent supplement scheme is designed to be short term. When landlords have grievances about non-payment of rent, etc., by a tenant, there are specific measures in place through the dispute resolution process of the PRTB if they wish to go through that.

I will update the committee on HAP. The Department of the Environment, Community and Local Government is taking the lead in the development of the payment with significant interaction with our Department. Detailed legislation will be required on the housing side to bring in HAP and the Department of the Environment, Community and Local Government is working on that. In tandem with that, its officials are carrying out a detailed economic assessment of this proposal and they are also examining the business planning process behind this because this will be a fundamental change in how housing supports are administered. There is also a major concern among local authorities. Many of their tenants have fallen into rent arrears and there is a concern that the proposed set up under HAP should not make this situation worse.

I referred in my opening contribution to the household budgeting facility. This scheme is operated by An Post on behalf of my Department. It is an excellent scheme, which helps people, particularly those on low incomes, to manage their budget more effectively. They can pay their gas and electricity bills and so on out of that. Currently, 33,000 local authority tenants are paying their rents under the household budgeting system. Part of the difficulty was when they signed up to a tenancy agreement with a local authority and household budgeting, they were able to unsign a week or two later. We introduced a provision in last December's Social Welfare Bill to make it mandatory that when a tenant signs up to the household budgeting facility under the new tenancy agreements, he or she cannot unsign without the agreement of the local authority. We hope to have this new facility by the end of next month and that will be a help to the local authorities.

The pilot schemes will commence once the necessary housing legislation is in place. The Department of the Environment, Community and Local Government is working with the local authorities to select the pilot locations. I do not have the details to hand but they will become available once the Department publishes the housing Bill. It is not clear how long the pilot schemes will be. That element has not been worked out yet but as part of the business processing, we will test the various elements to ensure the interaction between the local authorities, our Department, the Department of the Environment, Community and Local Government and whatever housing agencies make this new process work. We will tease out any of the issues that might arise before full roll-out commences.

Deputy Brendan Ryan

I thank Ms Faughnan and her team for their presentation. I add my voice to those who said the caps are too low. The average rent in Fingal, which I represent, is €1,200 for two to three-bedroom homes, which is well in excess of the cap of €775 for a one-parent family or a couple with one child and €825 for a one-parent family or a couple with two children. The gap is too great.

The other factor in relation to Fingal is that caps are €100 lower than in other parts of Dublin city. The idea that one can find rental accommodation in places such as Swords, Malahide, Dunabate, and Skerries for €100 less than in other parts of Dublin city is erroneous. That should be factored in in the departmental review. The cap reduction was well intentioned at the time, but the lowering has not resulted in a reduction of rents in recent years. In 2012 rents were up 5% in the Dublin area and are projected to rise further this year. They have remained high owing to demand among a particular demographic, young working couples and families who traditionally would have been buying their homes but are not doing so in the current economic climate.

A serious issue arises from the high demand for the limited supply of rental properties. It is a landlord's market. Given the demand for rental properties among working families, landlords are in a position to decide not to rent their properties to rent supplement recipients. That is a serious issue and it is becoming increasingly common to see "no rent supplement" attached to many advertisements for rental properties. I have tested this by visiting letting agents in Swords and elsewhere in my constituency. Landlords are specifying that they want to rent their properties but not to persons in receipt of rent supplement. People who, through no fault of their own, are in receipt of rent supplement are being pushed into areas in which they may not like to live as their children are in schools in other areas. They may be forced to live in another part of the constituency in which they do not have supports and must then look for school places for children who are already attending school.

Rent supplement recipients get very little support from the Department and are left to their own devices in negotiations with landlords. I do not know whether anything can be done about this, but I ask the officials to factor this in to the review. Very often families such as single parent families, those without too many supports around them or other vulnerable families must negotiate individually with landlords. Negotiating with landlords is a major issue for them and it leaves them open to being pressurised by landlords to make off-the-book payments. Others have mentioned such payments and I believe a significant percentage of people in receipt of rent supplement make top-up payments. Being vulnerable they are forced to do so because they believe they have no option but to pay. At one level - I hope this is not the case - the Department could be happy that if rents are higher than the cap, other family members are forced to support them, which should not be the case.

Deputy Patrick Nulty

I thank the Chairman for allowing me to contribute to this discussion. I also thank the officials from the Department, Ms Helen Faughnan and her team, for their input. Everybody present would probably agree that the long-term solution to this problem is the provision of social housing, but, unfortunately, the State has failed to provide it. While rent allowance may, in theory, be a short-term support, in practice it is an integral part of housing policy.

I, too, will comment on top-up payments. I have spoken to community welfare officers who tell me that they know when signing off on rent forms, the rent is a fiction. They are trying to keep families in their homes. Tenants must renegotiate their rents each year, year in year out, and if they do not succeed in negotiating downwards and remaining in their homes, they must take their children out of school and uproot themselves from the neighbourhood and neighbours with whom they have built links. It is Orwellian to suggest there is no evidence of top-up payments being made; no one can accept this. I am sure members recognise that top-up payments are rife in the system.

I will comment on rent caps. My colleague, Deputy Brendan Ryan, mentioned Fingal. I am using it as an example because I know it and the Dublin 15 area best. This morning I looked at the properties available for the different categories under the caps. For a family with two children, I found three properties; for a single adult, I found one property; and for a family with three children, I found two properties. There is a disconnect between the prevailing market rate for houses and the rate at which the cap is set. The availability of properties for renting in Dublin is at its lowest level since 2007 according to daft.ie. There is no relationship between demand and supply. In addition, recent legislation was introduced to govern bedsits and the quality of private rented accommodation. In the Dublin area the differential for a single person in contrast to a couple, both with no children, ranges from €175 to €225, yet these two household units are competing for the same properties. The only rationale for the differential is that it was assumed that single people would move into bedsits, but that is no longer the case. Have the departmental officials recognised that the cap for a single person in the Dublin area must be increased significantly if he or she is to access housing?

The take-up of the rental accommodation scheme, RAS, has been moderate at best and poor in practice. One of the commitments in the programme for Government was to reduce the criterion in respect of eligibility to six months to move to the RAS. I have tabled parliamentary questions on this issue and the response from the Department is that this will not be done. Will the officials confirm that one will be able to move to the RAS after six months and, if not, why not? Is the programme for Government wrong or is the response from the Department wrong? A very clear commitment was made in the programme for Government that the criterion in respect of eligibility would be reduced to six months. NGOs have been campaigning on the issue for three or four years.

Senator Marie Moloney raised the question of the exceptional needs payment. I have come across cases - I do not like to use individual cases, but they illustrate the point - of women who experience domestic violence and have had property damaged in incredibly difficult circumstances. The landlord refuses to return the deposit and they must go through the ordeal of going to the PRTB and a very long process to get the deposit back. They have encountered major difficulties in getting the money for another deposit together. That is what is happening in practice.

While I appreciate the report, it is Orwellian when compared with the experiences of individuals, often on very low incomes, who are seeking or are in receipt of rent supplement and trying to access supports.

Senator Aideen Hayden

I thank the delegation for its presentation. We are all aware of current financial circumstances and all Departments have attempted to make savings. I note the following: "The Department currently funds almost 30% of the private rented sector..."; however, three years ago the Department funded 40% of the private rented sector. Therefore, the proportion of the sector being funded by the Department has fallen very significantly. I also note that the budget for 2013 is €403 million and we know that it has been reduced from a figure of €500 million a number of years ago. This is in the face of 250,000 people having become unemployed. It is inexplicable that the proportion of the rental sector being funded by the Department has fallen so substantially in the face of such increased demand.

It has been said that access to rent supplement has been limited by stealth. This has been done by centralising the system, making it difficult for people to access the rent supplement, limiting the capacity of organisations and individuals such as Members of the Oireachtas to intervene on the behalf of clients and so on. There has been a high level of unemployment over the past number of years. Why has the Department's contribution to the rental sector fallen substantially over the period?

I can only echo what other colleagues have said about rent caps. In my area of Dún Laoghaire the Citizens' Information Centre carried out research and discovered not one property in the area was within the rent caps. Dún Laoghaire is a very mixed area. I am sure that the assistant secretary would accept that people are entitled to live in the area.

Recently I carried out an analysis on Cork. I discovered that for a single person wishing to rent in Cork city there was a difference of €150 between the rent cap and rent for property at the same level. The Threshold organisation has consistently carried out research that shows that the level of topping-up is between 50% and 60%. I am a former member of the Private Residential Tenancies Board and my experience of PRTB cases also showed that topping-up is rife.

Aside from what all of the people around the table and in the room have said, evidence suggests that the Department's rent supports dropped by 25% over the past number of years. Last Monday the PRTB Rent Index was published which showed that rents have stabilised since 2010. If rent support fell by 25% but rents stabilised then that demonstrates that the tenants in receipt of rent supplement have been topping-up by a minimum of 25% and rents have remained stable.

With regard to penalising tenants, I accept that moving outside of the law is a different situation but tenants cannot access properties within the rent caps. I do not think that people around the table have lied to the assistant secretary. The reality remains, people must access a roof over their heads in some size, shape or form. It is not a mystery why people do not report their landlords. It is a reality that they must top up in order to find somewhere to live.

I question the sources of the Department's data for a number of reasons. First, the PRTB rent index stated the rents charged but I could not disagree more with its statement. It is my experience that the rents declared on the PRTB registration forms are rents that reflect the stated rent caps, not the rent paid. For example, if the rent cap is €560 then the rent declared is €560 even though I know from having seen PRTB cases that the figure declared does not reflect the rent that is paid.

I have used daft.ie as a source of information. The website reflects rent sought, which give a realistic picture but not a totally accurate one because it does not reflect the prices that are being charged for properties at the bottom end of the market. That happens for a number of reasons. Bedsits or studio style accommodation is not usually reflected in the Daft index because many of the transactions at the lower end of the market are informal. For example, if a dwelling has nine units and a tenant notifies the landlord of his or her intention to leave more than likely someone's friend or sibling will avail of vacant unit. I contend that the Department's sources of data are flawed for two reasons. First, the stated rents on registrations forms do not reflect the rents that are being paid. Second, the Daft index does not represent properties at the lower end of the market.

I wish to make two more points and I apologise to the Chairman for going on. Recently a presentation to the Dublin City Council's housing strategic policy committee noted that the level of people presenting as homeless has doubled in the past 12 months due to a lack of available property at rent supplement level. Homelessness, in particular, is an issue for single people. From past experience I know that a community welfare officer could exercise his or her discretion, particularly when it came to difficult situations such as people exiting homelessness. My information now is that CWOs are discouraged from exercising discretion. I understand that if one exercises discretion one must give an explanation to the Minister, which would not encourage a CWO to exercise discretion. The assistant secretary may correct me if I am wrong.

As a rent review is under way, I can ask that appropriate CWO discretion be reinstated in two instances: First, in the case of persons who are homeless or at risk of homelessness, and second, where it is clear and obvious that rent caps do not reflect the rents that are being charged.

My last point relates to the transfer cost to the new housing assistant payment, which has been welcomed by all of the voluntary associations working in the sector. HAP will level the playing field for people at the lower end of the private rental market. Does the assistant secretary have a view on how to progress the initiative more rapidly?

Ms Helen Faughnan

I shall respond to the last speaker first regarding the reduction in the amounts paid. Approximately €80 million was the difference between last year's rent supplement expenditure and that of 2011. Approximately €20 million of that sum was related to rent limits and the remainder was for increase in the minimum contribution. Budget 2012 increased the minimum contribution that each tenant had to pay which reduced the expenditure on rent supplement.

There was also a reduction in the number of people claiming rent supplement. I want to reiterate that rent supplement is a demand-led scheme. People are finding accommodation and 48,700 rent supplement claims were awarded last year. People are securing accommodation and their payments are being met. Last year there was a drop in the live register of about 45,500 people over the 2011 figures. A small proportion of people on the live register claim rent supplement, approximately 10% if I remember correctly. Therefore, I do not accept Senator Hayden's claim that access to the supplement was limited by stealth. Rent supplement is a demand-led scheme and people will be assisted if they present with a need for accommodation and discretion still exists, particularly for the homeless.

I was responsible for the homeless male and female units in Dublin. The staff who work in those units do fantastic work in engaging with people who are at risk of becoming homeless. Part of their work is liaising with organisations such as the Simon Community, Threshold and the Fr. McVerry Trust. If someone at risk of homelessness is brought to their attention they will try to secure accommodation for them even if discretion is required. They will find a housing solution for them where local authority or social housing is not in place. The units also reach prisons and hospitals. The staff go into prisons and hospitals prior to people being discharged in order to make sure that people have accommodation when they get out.

We are caught between a rock and a hard place when it comes to rent reviews and existing data. If landlords are lying on their returns to the PRTB then they are lying to the Department and Revenue. It is difficult for my Department to get a handle on the problem if the tenant is complicit. It is difficult for the Department to take action if the tenant and landlord are signing declarations on the Department's application forms stating a certain amount is paid.

It is very difficult for us to take action on that. In terms of the balance of where the Department fits and given that it has perhaps 30% of the rental market, we have a duty of care to the taxpayer to ensure we get best value for money. It has been shown that landlords follow the rental market we set. We must, therefore, ensure we get the best bang for our buck in setting the rent limits. We are also trying to ensure that we meet people's accommodation needs. In many cases, staff engage with tenants. To pick up on Deputy Ryan's point, we do not engage with landlords; our engagement is with tenants. Generally, a tenant comes to us when he or she has sourced the accommodation he or she wants and has negotiated the rent with the landlord. If someone comes to us who is having difficulty, in particular where he or she is in accommodation already from which he or she is trying to move, staff on the ground will support the person to get accommodation. We allow people time where that is required to move from one place to another.

I was asked about data sources. We have the PRTB data and we must go by what is declared. We also have local information. Our staff are based and live across the country and have a good handle on rent levels and that feeds back into our reviews. We deal with NGOs also who feed us the information they get on the ground. Regarding assistance to tenants, we must not forget the community information centres which are under the Department's remit. They provide advice and support to tenants also. Sometimes they assist with the completion of application forms, but also in dealing with landlords.

Deputy Nulty mentioned top-ups. We are aware from what people are telling us that it appears to be an issue. We cannot ensure that we have access to accommodation in all areas and that is similarly the case with local authorities. There is availability out there given that almost 50,000 households secured rent supplement accommodation. Despite what they have said about not wanting rent supplement tenants, landlords are engaging in this market. I accept that the long-term solution will be with local authorities under RAS or the housing assistance payment scheme. That is where the issue rightly fits. It was originally intended that the Department would provide emergency support, but that, unfortunately, grew over the years. On the six-month point, 54,000 of our 86,000 rent-supplement tenants have been in receipt of same for more than 18 months. Approximately 44,000 have been moved since 2005 to a RAS solution. We can look at six months, but to implement it will only increase the numbers local authorities are trying to deal with.

References were made to availability in Dublin, Fingal and Dún Laoghaire. We monitor that on a regular basis. The prices quoted on daft.ie are the asking price. It becomes clear that often the asking price is not what the tenant must pay. There can be some negotiation.

Senator Aideen Hayden

It is more. Rents have increased by 10% in south Dublin.

Ms Helen Faughnan

We are aware that there are particular issues in the Dublin area, mainly because of availability. I am aware from the Daft report published in the first quarter of the year that Dublin rents have increased 5% year on year. The increase is almost 6% in the Dublin city centre area. There are availability issues as the number of properties available for rent has fallen sharply. Fewer than 2,000 properties are available to rent in April, which was the lowest number of any period in the last eight years. We have a particular problem in Dublin which we will have to address as part of our rent limit review. We are conscious of that.

Mention was made of the centralised rent units. We are aware that there have been issues in relation to the administration of those rents. They were particularly based in the Dublin area and were established to meet a particular need and problem. On the transfer of the community welfare service into the Department, 27 temporary CWOs were lost and the number of claims increased substantially by approximately 62%. It is not ideal and we are looking at the mechanisms around how we process rent claims. The majority of claims are processed in small hubs where a person seeking rent supplement can come in and hand in an application which can be checked to ensure all necessary documentation is being provided. The person can also receive any necessary support in terms of processing a claim.

Deputy Brendan Ryan

On that, someone referred earlier to waiting times, etc. The advantage of having a decision made locally was that there were no waiting times. Decisions were made very quickly. Someone looked at a form and if a person did not have relevant documentation, he or she could be helped there and then to complete the application. There are real advantages to that system.

Ms Helen Faughnan

Exactly. We appreciate that and are looking at it. The Department has merged staff from the former employment and community services of FÁS and the community welfare service of the HSE. Approximately 1,700 staff have merged in with the existing staff of the Department and we are examining a more integrated service for the customer under the auspices of the new Intreo model which is being rolled out. Approximately ten Intreo centres have been developed and we are in the process of putting in place Intreo services in 33 other centres. One aspect of that is an integrated reception area. If someone comes in to access any of the Department's services, including rent supplement, he or she will be met at reception. He or she will be able to access a form and if he or she needs support to complete it, he or she will get it. The form will be accepted and processed through the back office. That is where the service is moving to.

Deputy Denis Naughten

I will be brief as much of what I wanted to raise has been raised by other speakers. I want to repeat the issue about making the payment directly to landlords. I reiterate that there is a significant benefit in doing that. It means that someone does not fall into significant arrears. I urge the Department to ensure that continues through whatever process is required to be put in place. It needs to happen.

The rent cap causes significant problems for me in County Roscommon. While Ms Faughnan makes reference to situations where one is adjoining another town, what she said does not happen in reality. We have one rent cap for County Roscommon and it applies equally in Monksland in the south of the county, which is literally the distance of the white line in the middle of the road from the town of Athlone.

On one side of the road, the rent cap is €100 more than on the other side. It is the same rent cap that applies 75 miles away in rural Arigna at the other end of the county. That cannot and will not work. The same situation arises in Roscommon town. The small rural village of Creggs, six or seven miles from the town, has a rent cap higher than in the town of Roscommon because it happens to be in County Galway. People cannot access accommodation locally because of the rent cap. There is a general cap for a full county, not taking into consideration the points articulated by the witnesses in respect of demand for property in a particular area and local needs. Officials in the Department of Social Protection who have come in from the HSE in Roscommon and Athlone have clearly articulated the problem to the Department. There is a knock-on impact in respect of local authority housing. If people are not resident in the county, the local authority knocks them off the list and they must justify getting back on the council housing list because they reside in a local authority area outside the county. This is causing major problems for people because there is no sensible approach to rent caps. I hope these anomalies are resolved because it is causing major hardship for families. If they want to remain in their community, they must pay a top-up whether they like it or not.

There is a persistent problem with a small cohort of people in receipt of rent supplement. They are persistent antisocial behaviour offenders. One estate in County Roscommon hit the local media last week. It has become a no-go area because of a couple of people in receipt of rent supplement. They are moved from one house to another and continue to receive rent supplement. They continue to destroy houses, terrorise the community and move on to another development or another part of the development. A certain amount of control can be exerted when people are in local authority tenancy agreements and the PRTB covers the private rented sector. I refer to the use of rent allowance to ensure we do not have people in receipt of the rent allowance viciously assaulting members of the Garda Síochána trying to keep the peace and calm in a housing estate in rural Ireland. This should not be happening and something must be done urgently. In those circumstances, it should be made crystal clear to people they will lose rent supplement if they continue to persist with aggressive, antisocial behaviour in communities. This is causing major problems for the community but also the policing of it by the Garda Síochána.

Chairman

The number of people receiving rent supplement may have reduced in recent years. Why is there a drop and to what extent, taking into account people in the rental accommodation scheme? The Minister is clamping down on social welfare fraud. Is there any such initiative on rent supplement? There may be arrangements whereby people fraudulently receive a rent payment. If someone in a particular part of the country cannot get a property under the rent cap, are they given any help in sourcing accommodation by the Department? What is the situation in Britain for similar payments? Do they have the same set up as us?

If the top-up problem is endemic, should they be brought into the open so that top-ups are allowed? There could be set payments according to the market, with the analysis the Department does, but we could also allow top-ups as they are happening anyway. Has the Department considered this?

Senator Marie Moloney

I thank the officials of the Department for attending and providing responses. We may not agree with all of the responses but the officials made an effort to come in and talk to us. I ask Ms Faughnan to acknowledge that the problem is not Dublin-based. She continually referred to a problem in Dublin but there is life beyond the Red Cow. The problems were articulated by other members.

Does Ms Faughnan accept that top ups are taking place? Ms Faughnan referred to discretionary payments but that is subject to the approval of the Minister and takes time. Committee members, who are trying to help clients, cannot get information because it is unavailable to us. We cannot tell our clients what is happening.

Ms Faughnan referred to a duty of care to the taxpayer but I put it to her that she has a duty of care to the vulnerable as well. These people are left unemployed, with no money to pay rent. What can we do? We cannot drive them out of the community. Ms Faughnan said that if accommodation beneath the rent cap is not available in that community, there is nothing the Department can do. However, we must keep people in the community as children may be established in schools and parents may be working in the community and involved in groups and organisations. We cannot drive people out of an area they are used to living in. We have a duty of care to those people as well. We cannot put more financial pressure on them by driving them out so that they must buy a car and incur petrol and diesel expenses going to the local town.

Ms Faughnan said she had local information on the ground but the feedback we receive suggests the Department does not have a handle on what is going on. There is no way the cap reflects rents in the area. Every committee member has said that but the Department does not seem to take that on board. When I rudely interrupted Ms Faughnan, as the Chairman pointed out, it was to say the PRTB reflects the rents minus the top-up. The PRTB is not going to tell about the top-up, nor is the tenant in case the accommodation is lost. There is no record of it and the landlords do not have to pay tax on the top-up because it does not exist. I thank the witnesses for attending and I appreciate their comments.

Deputy Aengus Ó Snodaigh

I welcome the fact that new rental limits will be announced in June. I hope that people see sense, particularly in my area. I presume the overall rent supplement budget or envelope within the Department cannot be breached if new rental limits are accepted. If the cap goes up in one area, does it go down in another area? How will the new rental limits be estimated within the Department or is it done solely on the cost of property?

The following issue with rent supplement has arisen a number of times and in most cases the community welfare officer has been willing to budge. It applies to single men, in particular, who have overnight access or weekend access to their children but cannot get rent allowance for a property bigger than a single bedsit. Is there a directive in respect of single men with court order access to their children?

My other issue relates to the fact that there are not as many single-bedroom properties available in the city. I presume the situation is the same in rural Ireland. Sometimes, the only available property in an area is a two-bedroom one. In such a case, does a community welfare officer have discretion to allow a person to move into that property, which is normally capped for people with children?

Deputy Brendan Ryan

I wish to address Deputy Ó Snodaigh's question on whether a fixed amount of money is available for rent supplement in this year's budget. How would any increase in the caps associated with a review be decided? Is there scope for an increase? In comparison, if 1,000 people are made redundant, God forbid, the Department must find social welfare payments for them. If market rents increase and people need additional money, it ought to be found.

Ms Helen Faughnan

Deputy Naughten referred to the Roscommon area. We are aware of the issues, as our staff on the ground have fed them back to us. We will examine them as part of the review.

Deputy Denis Naughten

They have been feeding in for a long time. I am not referring to today or yesterday - this situation has been ongoing for a number of years. Staff have been feeding it in since the cap was introduced. It has caused significant hardship. Despite all of the reviews, nothing has happened. Will Ms Faughnan assure me that something will happen this time?

Ms Helen Faughnan

We will definitely feed that information back into the review this time. We can set out the current limits. It might also be useful for the Deputy if, ahead of the rent review, we provided information on the rent supplement tenants who are in receipt of support in the area.

I reassure Senator Moloney that we are aware of every area in the country. The staff based in Sligo know the highways and byways of Ireland through their work. We are aware of the county borders and that some discretion is being applied in that regard. We will take the various comments on board as part of the review, as this is an important matter. Under law, discretion is nominally applied on the Minister's behalf. Each local member of staff has that discretion. He or she need not go up the line seeking approval. An immediate response is possible.

Deputy Ó Snodaigh mentioned our budgetary envelope. The caps are set in line with the market. When we conduct our research and feed information in, we set a level that we believe is reasonable in terms of the market. We do not just bear in mind the taxpayer. We in the Department are conscious of the fact that we are the front-line support for the country's many vulnerable people. We take this responsibility seriously.

In terms of recipients, there has been a decrease in customer numbers. In 2010, there were more than 97,000 rent supplement recipients. In April of this year, the number was 85,800. This has reduced the pressure on our budgetary envelope as part of the Estimates process. It is a demand-led scheme. If our budget must be extended, we will negotiate with the Department of Public Expenditure and Reform.

Deputy Ó Snodaigh raised the issue of single men in split parenting arrangements. Every claim for rent supplement is determined with regard to an applicant's circumstances. Our staff - formerly CWOs - would engage with the person seeking the payment. We must be satisfied that whatever rental accommodation the person is seeking is suited to the residential needs of the applicant and his or her claimant. Due to a large number of marriage and relationship break-ups, there are split parenting arrangements. If a married or cohabiting couple has split, a man or woman is residing in the family home and the other partner, who is working and renting a two-bedroom or three-bedroom house or apartment, has visiting or access rights but then loses his or her job, we will not make his or her situation any worse. We will meet the accommodation needs.

Although I would not call it a trend, we are aware of some instances of single men seeking to leave their family homes and asking us for two-bedroom accommodation where they have no history of access arrangements in respect of their children.

We must be aware of various situations. Staff engage with customers, explore the issues and examine housing needs, particularly those of the children involved. Each case is decided on its merits.

Chairman

Even if the father does not have a tradition of access, surely it should be encouraged for the sake of the child. Obviously, there are exceptions to this general rule. Should the Department’s attitude not be that it is better for everyone concerned to facilitate the other parent, even if the access arrangements have not been used previously?

Ms Helen Faughnan

Yes. It is a question of people showing us proof of their access arrangements.

Deputy Aengus Ó Snodaigh

In some cases, they do not have access arrangements. They must go to court to get them. If a person is in a one-bedroom flat, he or she cannot get larger accommodation to accommodate his or her children. The person has gone to court because he or she wants to play a role, yet is not allowed to have his or her children in a single-bedroom flat, particularly if the case is one of the many instances of a father and daughter. The only option is to find a larger flat. It is at this point that there seems to be a blockage in the system.

It should not be down to us to negotiate the hassle or to encourage a CWO to reconsider a case. We are seeing more such cases. It is a difficult situation for everyone. While I hope that it is a temporary arrangement for people, the staff - formerly CWOs - should take greater cognisance of the fact that, if people go to court and win overnight access, they should be accommodated inasmuch as is possible until their situations change again.

Ms Helen Faughnan

Yes. That one parent is in receipt of rent supplement does not automatically debar the other person from receiving rent supplement. Each case is decided on its merits.

Fraud was mentioned. Control is an integral part of all of our schemes' maintenance, including rent supplement. Generally, we conduct a biannual review of all rent supplement claims and maintain ongoing contact within the Department to ensure that the correct amounts are being paid.

We are carrying out a fraud and error survey of the rent supplement scheme to try to identify the risk category into which the scheme falls. The previous survey was carried out in 2007 and the results indicated that the rent supplement scheme fell into the low to medium risk category, while the overall fraud rate was identified as low, at 2.4%. We are carrying out that fraud and error survey to see if there are any areas on which we need to focus.

Deputy Aengus Ó Snodaigh

Would Ms Faughnan consider engaging in a sting operation, such as what Deputy Brendan Ryan stated, and visiting some landlords to see what they are suggesting to people? The fraud level, at 2.4%, is low; clients may not be ripping off the Department, but there is fraud in the sense that the documentation landlords and tenants are signing does not mention a top-up payment. I suggest publicity on the possibility fraud is one approach to take. Since the change in the caps, those who have been paying have had to top up the top-up payment, which is putting them in dire straits because there is no alternative available for them.

Ms Helen Faughnan

We appreciate that. The difficulty is trying to prove it when the landlord and the tenant are complicit. We will take on board the Deputy's suggestion of publicising and highlighting the fact that the top-up payment is fraudulent.

Anti-social behaviour in social housing is a major problem, but the Department does not have a relationship with the landlord and tenant behaviour is a matter for the landlord in the first instance. Landlords can avail of the dispute mechanism of the Private Residential Tenancies Board and have recourse to the Garda in the matter. Again, it is imperative to move responsibility to the local authorities because they have the anti-social element built in as part of the tenancy arrangements with their tenants. The social welfare legislation provides that if the Department is notified of anti-social behaviour and the tenancy is affected, we stop the payment of rent supplement payment in these instances.

The Chairman asked about international policy, particularly in Northern Ireland. If a person decides to move into a property for which the rent is higher than the rate set, he or she pays the difference and it is a personal choice. If we were to out top-up payments, would the rent demands being made by landlords just keep rising to try to meet what we were setting? There would be a risk in doing this.

We do not source accommodation for tenants. They source it in advance of coming to us. Let me give an example. When the rent limits are reviewed and the landlord will not agree to reduce the rent, the tenant and community welfare service staff sit down and discuss the matter and try to come up with a solution. We would never make somebody homeless as a result. We work with him or her to try to come up with a solution that meets their particular needs.

Deputy Brendan Ryan

This is a general question addressed to Ms Faughnan. In terms of the review under way, does she believe she will be able to address all of the issues raised today?

Ms Helen Faughnan

We hope to take on board everything that has been said today on the rent limit review. It is a very practical review and locally based. We see what is available within the limits and what can be achieved through negotiation. Accommodation is available. Some 50,000 people secured accommodation last year. We hope the new rent limit review will address the issues raised because of the changes in the rental market of which we are aware in Dublin and elsewhere, particularly on the borders. Last November my officials and I briefed Oireachtas Members on the issue of rent supplement, reviews and so on. If members of the committee would find it helpful, we could organise another briefing session to take them through the rent limit review, the findings of which we will make available to all Oireachtas Members. Following its publication, we can make a presentation and answer questions on issues arising from it.

Chairman

I thank Ms Faughnan and her colleagues for briefing us so comprehensively. We may raise outstanding issues with the Minister. I very much welcome the fact that Ms Faughnan will brief us on the findings of the review when they are available.

The joint committee adjourned at 3.20 p.m until 1 p.m. on Wednesday, 22 May 2013.