Dáil Éireann Debate, Tuesday - 8 December 2015
113. Deputy Michael McGrath asked the Tánaiste and Minister for Social Protection the cost of increasing rent supplement limits by 5%, 10% and 15% in the urban areas of Dublin, Cork, Limerick, Waterford and Galway; and if she will make a statement on the matter. [43739/15]
View answerRent supplement plays a vital role in housing families and individuals, with the scheme supporting approximately 62,000 people at a cost of €298 million in 2015. The provision for 2015 represents a transfer of funding in excess of €20 million to the Department of the Environment, Community and Local Government to support the Housing Assistance Payment (HAP).
A review of the rent limits undertaken earlier this year found that the impact of increasing limits at a time of constrained supply will increase costs disproportionately for the Exchequer with little or no new housing available to recipients. Analysis shows that increasing the current rent limits nationwide by 5% would result in a full year cost in excess of €15 million; a 10% increase would carry a cost of almost €32 million, with a 15% increase costing approximately €51 million. A breakdown of this cost on a county basis is not available; however, as an approximation, the costs to apply such an increase in the Dublin, Cork, Limerick, Galway and Waterford regions, would account for approximately 70% of the total share of increased costs for the scheme. Though the costing model accurately reflects the increased cost for the scheme, the likelihood is that increased supply would not be achieved as the market would adjust to the revised rent limits.
Rather than increasing limits at this time rent supplement policy will continue to allow for flexibility where landlords seek rents in excess of current limits. Flexibility is provided under the National Framework for Tenancy Sustainment for both existing customers of the scheme and new applicants. As part of this flexible approach the Department, in conjunction with Threshold, operates a special Protocol in the Dublin and Cork areas where supply issues have been particularly acute. Plans are actively underway to extend this Protocol to Galway City. This approach has assisted over 5,400 households nationwide to retain their rented accommodation through increased rent payments.
I believe that these measures and the reforms to the private rental sector announced in November will provide increased certainty for both tenants and landlords in the current market.
