Rent supplement is payable to people who are unable to meet the cost of renting private accommodation and is intended as a short-term support. There are currently over 93,000 tenants benefiting from a rent supplement payment — an increase of 26% since the end of 2008. The provisional outturn on Rent Supplement for 2009 is €507.68 million. Budget 2010 provided for expenditure of €509m in 2010, after the achievement of €20m savings.
Rent limits are set at levels that enable eligible households to secure and retain basic suitable rented accommodation, having regard to the different rental market conditions that prevail in various parts of the state.
It is essential to ensure that state support for rent supplemented tenants, who form a substantial section of the rental market, does not give rise to inflated rental prices with particular negative impact on those tenants on lower incomes, including people in low paid employment. The Government is determined to ensure that reductions in rent levels generally in the year to date result in savings for the taxpayer.
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 1 June 2009 to 31 May 2010. Rent limits can, however, be reviewed at any time. Notwithstanding rent limits, the Community Welfare Service may, in certain circumstances, exceed the rent levels as an exceptional measure to meet special needs. Equally the Community Welfare Service also pays below prescribed rent limits in the light of rent levels in the local rental market.
Budget 2010 provided for €20m savings in the rent supplement scheme arising from a review of the maximum rent limits. To this end, the maximum level of rent supplement payable by the State will be reviewed early in 2010 on the basis of the latest data available on general trends in rental prices.
The review will be conducted with reference to analysis of rents recorded with the Private Residential Tenancies Board, the CSO private rent index and data from the Daft.ie property website. The maximum rent limits payable will then be adjusted and new limits will apply in respect of all new tenancies or renewals of tenancies from April 2010.
Indications are that rents in the private rented sector continue to fall since limits were reviewed in 2009. Based on current information available about decreases in rent levels, the Department expects the rent review to lead to savings of €20 million.