The Committee of Public Accounts is now in public session to deal with the report on value for money examination - the administration of supplementary welfare allowances, the Department of Social, Community and Family Affairs. The relevant documentation has been circulated. Some correspondence has been received on this matter from the Departments of Finance, Social, Community and Family Affairs and Environment and Local Government and the Eastern Health Board - the Department of the Environment and Local Government on the shared ownership scheme, the Department on Finance on income from subsidised rents and the transcripts of the meetings of 7 May, 13 May and 10 October 1998. I ask Mr. Meade, Director of Audit, to recap on where we were on this issue.
Department of Social, Community and Family Affairs (Resumed).
Mr. Meade
The value for money report has been considered on two prior occasions by the Committee. At the last hearing you, Chairman, decided that the following further matters would be considered at today's meeting and you asked for submissions from various Departments on them: first, how the escalating cost of the scheme could be arrested as it has increased significantly in the past ten years; second, whether the rent and mortgage subsidy element could be better spent by the Department buying or building more houses or apartments instead of paying the rent subsidy; and, third, the steps taken to uphold the planning, fire, housing and safety law in houses which are rented and subsidised under the supplementary welfare allowance and whether landlords who only meet these conditions benefit from this subsidy.
I welcome Mr. Edmond Sullivan, Secretary General of the Department of Social, Community and Family Affairs, to the meeting. I ask him to introduce his accompanying officials.
Mr. Sullivan
I am accompanied by Mr. Brian Ó Raghallaigh, principal officer in the Department, and by Ms Anne Tynan, our accountant.
I welcome Mr. Jimmy Farrelly, Secretary-General of the Department of the Environment and Local Government, to the meeting. I ask him to introduce his accompanying officials.
I am accompanied by Mr. Tom Corcoran, assistant secretary of the housing section, Mr. John Murphy, principal officer on housing, and Mr. Denis Conlan from the housing section.
I welcome Ms Melanie Pine from the Department of Health and Children and Mr. Pat McLoughlin, chief executive of the Eastern Health Board. I ask him to introduce his accompanying officials.
Mr. McLoughlin
I am accompanied by Mr. Martin Gallagher and Mr. Michael Walsh who are programme managers.
I welcome Mr. Gallagher, Mr. Mooney and Mr. Cronin from the Department of Finance.
As regards escalating costs of rent subsidies, I ask Mr. Sullivan to make an opening statement on the information he has supplied to the committee since the last meeting.
Mr. Sullivan
The note we submitted yesterday evening is the most up-to-date we have. Do you wish me to go through it?
Yes, because most members would not have had time to read the letter.
Mr. Sullivan
The first part sets out the general background to the rent supplement scheme - its objective, impact and limits, how it is calculated and the contribution individuals must make to their housing needs. The second part sets out the legislative provisions with regard to the regulations and what the health boards are required to do in terms of the type of residence for which a rent supplement is payable. We than set out the procedures and instructions to the health boards and community welfare officers where standards of accommodation do not comply with the housing regulations. The next part deals with the question of tenants in receipt of supplements and the need to ensure they are included in the local authority assessment of housing needs. It also deals with some of the issues involved and the practices.
With regard to expenditure on rent supplements, we set out the changes made in recent years. We also point out that the rent levels closely follow rising house prices. We set out the legislative position on the review of rents by health boards and the various rent limits. We also point out that the number of recipients appears to have stabilised even though we reckon the underlying trend has fallen because of changes in the composition of those numbers, for example, with regard to asylum seekers and those in receipt of rent supplement as a transition measure. When that is taken into account the underlying numbers are decreasing, even though expenditure on rents and the rental mortgage supplement is increasing. That indicates it is a response to the increasing rent levels.
A number of policy changes could be made on this aspect. However, regard would have to be had to the impact they would have on the individual. We are concerned here with the more vulnerable groups in society at the lowest income levels. Any changes to the scheme would have to have a high regard to that factor.
Mr. McLoughlin, I ask you to briefly update us on the correspondence you submitted to the committee.
Mr. McLoughlin
I submitted information regarding the appeals and the numbers which were received, refused, allowed and withdrawn at 1 January 1997. We are going to the board tonight with our annual report, which will update the position for 1998. Following adoption of the report tonight, I will submit it to the Committee.
We review the movement of rents on an ongoing basis. Our last review indicated that we needed to move from, for example, £50 per week for a single person at January 1998 to £60 per week from 1 January 1999. That indicates the degree of movement in rent prices. We must follow the market; we do not lead it. The figures I have indicted are the rents we would provide to a single person per week, with pro rata figures applying down the line.
The question of giving subsidies for dwellings or units of dwelling which breach the planning, fire or housing regulations is one for Mr. Farrelly. Perhaps you would briefly outline the position in that regard.
At any one time, there are 40,000 people drawing a housing supplement. As indicated earlier, we have varying requirements with regard to registration and enforcement of standards. These are, of course, matters for local authorities and we constantly exhort them to ensure compliance with these requirements and standards.
The interdepartmental committee report, which involved representatives of the Departments of Finance, Health and Children, Social, Community and Family Affairs and my Department, signed off on this report yesterday. It deals conclusively with all of these issues. The intention in that regard is to present the report to respective Ministers and to have it brought to Government at an early stage with a view to taking decisions on it.
When did you sign off on the report?
Yesterday.
We were told a few weeks ago that you expected to have it concluded within two weeks. Is there anything you can tell us about it?
The report deals with broad policy issues, which I am unable to divulge. It will deal with all the issues arising here. It will deal, in particular, with the critical and important matter of integration of housing and income support roles and rent assistance and social housing policy. On the one hand, the health boards are involved on the rent supplementation side while, on the other, local authorities have specific responsibility for the social housing aspect. The report will deal with that issue as well as the integration of rent assistance with social housing policy.
It will also deal with the proper allocation of housing and income support roles between the relevant agencies, whether they be the health authorities, local authorities or the Departments of the Environment and Local Government and Social, Community and Family Affairs.
It will also specifically address the need to ensure effective management control, which is a critical and important issue. The issue of increases in the cost of rent supplementation and the need to make the most effective use of resources in meeting housing needs will also be considered, bearing in mind, on the one hand, the needs of those which are traditionally met under the social housing programme and, on the other, the needs of those dealt with under the supplementary welfare allowance for housing.
The problems identified in the existing scheme will be considered, such as disincentives to employment shake-up and the role of such factors in getting people off the allowance. It will also touch on the major implications of making a change which might call to be made. It is not a question of simply transferring a scheme overnight; it is a question of examining the new scheme, reforming it and then making whatever new administrative arrangements and-or transfers which may be appropriate. Other current issues will also be dealt with. These include the implications for rent assistance arising from the pressures in the housing market generally and increases in market rents.
I wish to briefly address an additional issue to correspondence I have had with you, Sir. At any one time there are 40,000 households on the rent assistance scheme. I know the committee has examined this from time to time. The estimate for the current year in terms of the cost of housing on the social side is approximately £100 million. People have stated, I believe reasonably, that we should use that money to build local authority houses rather than paying it out in the form of a rent supplement. In the response we gave to the committee, we might have dealt more fully with that matter.
If we used the £100 million to build local authority houses we would at most provide - it would take a number of years to do so - between 1,200 and 1,300 houses and almost 39,000 of the 40,000 people continuously on the scheme would remain to be accommodated. The extent of the reduction that would make would be minimal. On the other hand people might ask why we cannot provide 40,000 additional housing units to accommodate these people. If we were to do that, we would have to commence a massive building programme. At present, we are obliged to provide 22,000 social housing units under a four year multi-annual programme and if this was increased to 40,000 the cost involved would be something of the order of £3 billion. In the interim, we would still have to pay people supplementary welfare allowance.
If we are to go down that road we must take account of a more important consideration, namely, the type of people we cater for under supplementary housing allowance. First, two thirds of these people are single and approximately half of them receive the allowance on a short-term basis. Therefore, social housing would not meet these people's requirements. The supplementary allowance system, however or wherever it operates, is probably the only reasonable response to deal with this type of short-term need. Against that, everyone in the health authorities and the Department of Social, Community and Family Affairs who is involved in this area freely recognises that a considerable body of the people in receipt of that allowance will remain in receipt of it on a permanent basis. Therefore, it is appropriate that they should be integrated into the local authority social housing programme.
I could speak on this matter at great length but that is the one point I would emphasise. Some people believe the £100 million is money wasted and we should use it in trying to provide permanent assets and deal with the problem on a more long-term basis. However, the figures I have supplied show that this would not be a reasonable approach because it would not meet people's requirements.
There is a need for a rent supplement. However, questions were rightly raised about the administration of the scheme and the need to introduce changes to it in order to overcome the difficulties involved. There is reasonable unanimity among the constituent bodies which make up the inter-departmental committee with regard to what must be done to bring about change. That is all I have to say on this matter but I would be glad to deal with any questions Members may wish to pose.
A number of questions arise on foot of the value for money report. The Secretary General stated that the £100 million will not go a great way towards solving this problem. Has he considered spending £100 million per annum over a period, in addition to the moneys already being spent? Has consideration been given to the dramatic increase in housing needs in that area? I presume the survey being carried out for the Department by the local authorities has been completed and the Secretary General has some idea of the total demand involved.
Has any recognition been given to the fact that it is extremely costly to rent property at present? For example, it is possible for a person to pay between 35 to 40 per cent more on rent per month than they would if they purchased property. I refer here to a sector of the population, the members of which can ill afford to pay over the odds. To what extent have those factors been taken into account in the Department's calculations?
The Deputy referred to raising the level of investment in the social housing programme. That has already been done. A policy announcement was made in recent weeks about a multi-annual programme for social housing which will result in the construction of 22,000 houses in four years. In addition, there is a recognition that this matter does not merely involve traditional local authority housing. A commitment has been made to increase provision under the voluntary housing system from the current output of between 400 to 500 houses to between 4,000 to 5,000 per annum in the future. That is an ambitious and massive programme but it has been put forward in recognition that the voluntary housing system can make a major contribution in terms of dealing with the type of problems we are discussing, because those involved in that system, if one can encourage them to come on board, are well placed to provide for the needs of many of these people.
There is a third area to which I should refer. We introduced an affordability housing scheme in the past four to five months. House builders announced a scheme in recent days which we are currently analysing and, therefore, I will not discuss it in detail. Through our efforts, the Dublin Docks Authority is considering the introduction of an affordable housing scheme in the docklands area. These are significant efforts to deal with the issue of affordability.
In so far as rented property is concerned, it would be nice if everyone had their own accommodation and there was no need for anyone to rent houses. However, that is an unrealistic proposition. We are dealing with a segment of the market, through the provision of supplementary housing assistance, which is appropriate to rent subsidisation or assistance in some form or other. I do not believe it is realistic to expect that the vast majority of these people could be in a position to purchase their own accommodation.
We are beginning to stray into the area of questions about house prices, affordability, etc.
What is the upper limit of earnings a couple on a single income can draw down before being disqualified for assessment under the social housing scheme?
Let us look at it——
Let us look at it in the way to which I referred.
I will put what I was going to say last rather than first in order to meet the Deputy's requirements. There is no income limit or statutory requirement on a local authority in that regard. It is a question of assessing the needs of a person or family by reference to their circumstances. It would be difficult to arrive at a specific needs factor which was solely income based.
Initially I was going to say that in the affordability schemes we are attempting to introduce - whether they operate through the local authorities, the Dublin Docks Authority, etc. - we are generally trying to cater for households with a single income which does not exceed £20,000. I refer to affordability schemes where, in some way, these people can buy a stake or equity in the house.
Therefore, Mr. Farrelly would expect people with incomes of more than £20,000 to be able to purchase houses in the ordinary way?
That depends on family size and all of these factors.
What if the family is assumed to be small? The Department is not really clued into what is happening. To be able to purchase an averaged priced house in my constituency, combined income must be more than £45,000 per annum. There is a gap below that which nobody seems to be able to look after. There is criticism of all financial institutions which breach lending criteria. Mr. Farrelly in his opening contribution, referred to increasing investment in the housing programme and building 22,000 houses as a means of addressing the issue, which is fine. If the Department were able to do that in one year it would make an impact but it would not make an impact in a four year programme.
It is ridiculous that the Department will spend £100 million this year and more next year because the situation is getting worse. The options available to people are to become unemployed in order to receive a rent supplement or leave the country because they cannot purchase a house or pay up to £700 per month to rent a house. Mr. Farrelly is telling these people that 22,000 houses will be built over four years through an affordable housing programme but there is nothing happening in regard to it. When I approached local authorities about the scheme I was informed that they are looking at it but had not done anything yet. When people are in need of housing, what will they be told apart from that the Department is looking at the issue?
I referred to the affordable housing scheme from the point of view of the Department and the central system is being pushed very strongly right across the system. I heard the Deputy say that if he approaches local authorities they are not interested or do not seem to be interested.
They have not advanced these schemes.
I would be concerned if that were universal across the system but I accept what the Deputy is saying in terms of its possible applicability. There is a shared ownership scheme also where if one buys a £100,000 house one might buy 50 per cent equity in the house, and that scheme is of significant interest as well.
On the affordable housing, we are aware of certain schemes. I will check if the Deputy's local authority is in the list in front of me.
Dublin Corporation has a proposal for 80 houses in Finglas south under the affordable housing scheme. This is only the beginning - this is early days in the scheme. Galway Corporation has 46 houses ready to commence and 30 more agreed by the council. Meath County Council has drawn up proposals for up to 100 houses in various locations. Cavan County Council is ready to commence 50 to 60 houses. Let us be clear on it. If Meath County Council can do it, I am sure others can do is as well. Mayo County Council has proposals for 80 houses in Castlebar and Westport. Westmeath County Council has proposals for 31 houses divided between the affordable housing and site subsidy schemes. Wicklow County Council has proposals for 104 houses in Blessington, Kilcoole and Rathnew.
What is Kildare County Council's proposal?
I do not see Kildare on the list. Sligo County Council has proposals for four houses in Enniscrone. I will check Kildare County Council for the Deputy.
I am not specifically looking for that information. That scheme or any other scheme must be pushed. Unless the scheme is followed through the system and the Department finds out from each local authority whether it is in place and to what extent they have addressed the housing needs in their areas under the terms of the scheme, it will not work and there are countless other schemes as well.
Mr. Farrelly also mentioned the shared ownership scheme again as a means of substitution for supplementary rent assistance. What is the maximum loan available to an individual in Dublin, for example, under that scheme?
Under that scheme in Dublin one can buy a house with a value of up to £100,000 and sometimes more.
What is the maximum loan that can be taken out?
The maximum loan will always be related to income but a person with an income of £20,000 per annum would expect to get a loan of £50,000. If there was a second income of £15,000, one would get £65,000.
What is the maximum loan available in the counties adjacent to Dublin, namely Meath, Kildare and Wicklow?
The maximum loan relates to income and I cannot deal with it beyond that. On determination of the income one can assess. It is an issue. The Deputy will have seen the debate as regards the financial institutions, but they must be encouraged to act reasonably. The feeling is that 2.5 times the main income plus once the supplemental income in general determines the loan.
Is Mr. Farrelly aware that the maximum loan available under that system is approximately £25,000 below the amount necessary to purchase a house in County Kildare, for instance? We must be realistic about this. To what extent will the Department pursue this issue with a view to ensuring that the people living in those areas will have an opportunity to purchase a house? Otherwise, they do not stand a chance.
To go a stage further, if we are talking about affordable housing schemes, shared ownership, etc., the maximum loan available is £50,000. Against that we create the situation where people buy 50 per cent equity in the house and pay rent on the balance. That is on the basis on which they can buy a house up to £100,000 even though they only get a loan of £50,000.
Is it £100,000 in Kildare?
Could one buy a house in County Kildare for that price?
Yes, one should be able to buy a house. It depends on what one is talking of but this is the whole thrust of housing policy. We are pushing local authorities very hard in terms of operating those schemes using land which is available to them, to go out and use it to build those houses and, certainly, it is possible to buy a house.
The Secretary General should make contact with local authorities and make comparisons, as I have suggested, for himself and then he will see what I am talking about.
A sum of £100 million will be expended, which will increase to £120 million next year and, perhaps, £130 million the year after. It must be remembered that this figure was approximately £9 million in 1979 and has increased steadily since. In tandem with that the number of people on housing lists has also steadily increased. What does Mr. Farrelly think of the suggestion made here previously to make a worthwhile increase in the funding available to build houses? This was the notion that existed before "social housing" was invented. It does not seem to carry the same meaning in terms of availability of houses to those who are in need. What does Mr. Farrelly think about the impact of increasing the funding by at least £100 million per annum in order to erode the ongoing rollover? A certain number of people will always require emergency accommodation but I know people who have been in receipt of supplementary rent assistance for ten years.
We have increased the amount of money provided for social housing by 45 per cent. In other words, we increased it by almost half. We have announced a multi-annual programme which is a substantial and significant increase. I hear what the Deputy is saying but the problem with housing today is supply and there is only one answer to it, which is to provide more houses. We are not just operating on a platform of social housing alone. We are trying to operate a programme right across the system - social housing is one factor and voluntary housing is another. On the other hand, there is the question of people privately providing their own houses. We are attempting to provide shared ownership and affordability schemes and to encourage local authorities to push these schemes, to use land available to build houses at a reasonable cost and to make them available. It is a multi-faceted approach which recognises what the Deputy said, that the problem in this area is one of supply which is insufficient to meet demand.
Something I wish to come back to is that there is a suggestion, which I hear loud and clear, that the 40,000 benefiting under this scheme could or should be accommodated in some way in social housing. As I already said, about half of the people on this scheme are short-term and it is not appropriate that they come within the social housing programme. Two-thirds of the 40,000 people in the scheme are single, and by that I mean a one person household. It is a different need and problem.
Obviously the position on the ground is different to that in the Department. I suggest that someone should carry out further study of the actual problem to ascertain the profile of those affected. In my constituency numbers are increasing on a weekly basis. The availability of options is decreasing and we are quickly reaching the stage where people are having to emigrate because they cannot afford a house - this happened to one family I know.
As regards the report that has been compiled by the various Departments and the integration of rent assistance with the social housing policy, how beneficial did the Departments find this process? Did it find it was an opportunity to work together more efficiently and effectively on an interdepartmental basis? Is the Department of Social, Community and Family Affairs now working better with the Department of the Environment and Local Government and the Eastern Health Board in relation to this matter?
In that regard, staff in my Department - other Departments can speak for themselves - worked fantastically well together with a common purpose, which was to try to put a package together which would change this scheme and transform it in a manner which would be to the benefit of corporate Ireland and particularly people who need the scheme. From my viewpoint it was a very agreeable, worthwhile and workable relationship. The issues raised were extraordinarily difficult and complex but I felt everyone worked together towards a common aim and purpose. The report will reflect that.
Did the Department of Social, Community and Family Affairs feel the same? Was there a great benefit from the process?
Mr. Sullivan
I think there was. This group was set up a couple of years ago. I think what has happened over the years - and I have spoken to the Secretary General, Mr. Farrelly, about this - is that there is a better understanding of what the issues are on both sides. We have found it a complex issue with which to deal and to come up with solutions. Obviously, by definition, there are compromises in everything. We have all moved on. It has been very worthwhile. Clearly we would have liked to finish it sooner but other matters intervened given the complexity of the issues. I think it has been worthwhile and I hope we can move it on to the next stage. We are anxious to move the process on, as is the Department of the Environment and Local Government, so we can get to the next stage and see where we are going from here. There are concerns and issues which we must tackle.
While the Secretary General, Mr. Farrelly, has not given us any specifics on the matter, I welcome the fact that he is speaking so positively about it and that some solutions have been suggested on which the Government can decide as regards the integration of the rent assistance, SWA, and the social housing policy and also the effective management and control of the process. Presumably, possible solutions have been put forward which can be decided upon by the Government. The position sounds very positive.
While the expenditure of £100 million is a significant sum, I think we are getting good value for money. There has been a huge increase in the maximum rent levels allowed by those involved, whether it is the Eastern Health Board or the Department. For example, for a family with two children, the maximum rent level has increased from £400 per month in 1996 to £650 per month in 1999, an increase in the order of 51 or 52 per cent, maybe more. This is a significant increase which was forced by the increasing rents driven by the private sector, over which the Department or the Eastern Health Board does not have control. Yet, the total cost of the rent scheme has not increased by the same amount. Controls are being put in place.
The major increase appears to have been in 1996-7 where rent did not increase that much but the total cost did. That huge increase, I do not know whether it is asymmetric or a quantum leap, was not exactly dictated by rent level increases. From the end of 1996 onwards, it appears controls have been put in place on the overall levels of the amount for rent supplements, taking into account the huge increases in rent levels.
I am concerned about what Mr. Farrelly said about two-thirds of the 40,000 people being single. Many of these two-thirds are middle aged to elderly people and I am concerned about the conditions in which some of them are living. They are single people on low incomes living on their own. They tend to have the expenses of a family unit which would normally have a larger total income. They still have to heat a house, buy food, pay for electricity and all the necessities of life. Yet, two-thirds are on a rent supplement. There is a huge body of people who do not have political clout and I do not know if they are being looked after enough and whether enough emphasis is placed on them. As a society, are we caring for them enough? Is there a need to examine that group of people more thoroughly to see if their needs are being met fully? Could Mr. Sullivan comment on that?
Mr. Sullivan
I take your point and share your concerns. We reckon there are about 2,000 people over 65 in receipt of rent supplement and probably all are single people. Regarding people in long-term receipt of rent supplement, about 4,000 people are on it for five or more years; about 4,000 people are on disability payments. There are a number of different groups. These are the kind of things with which we are trying to inform the considerations of the working group to highlight what exactly should be done and the category of people with longer term housing needs for whom something might be done. Some 8,000 people are three years or more on rent supplement and, as Mr. Farrelly said, 20,000 people are one or more years on it. I would be concerned about people in older age groups and people who would be on supplementary welfare allowance in the long-term.
I am thinking of single people who are not in highly paid jobs but who have been able to cater for their needs. When they reach pensionable age and can no longer work, if they have been in jobs where pensions have not accrued to them, they are then dependent on the State and what it can do for them. Has the Eastern Health Board identified this group which is on rent supplement and which comprises single people who are vulnerable and do not have a great deal of clout?
Mr. McLoughlin
They would generally be in categories where they would be entitled to a medical card, so they would have access to a full range of services. In that regard, their health needs are certainly catered for. They could also avail of exceptional needs payments if they encounter any particular hardship in their lives and quite an amount of money is being spent on that. We conducted a study of the age profile of over 2,000 cases in 1998 in the north inner city - 2.1 per cent were up to 19 years and 16.9 per cent between 20 and 24 years.
Which people, Mr. McLoughlin?
Mr. McLoughlin
These are people in receipt of rent supplements. People between the ages of 25 and 29 years account for 20.4 per cent; between 30 and 39, 26.4 per cent; between 40 and 49, 17.7 per cent; between 50 and 59 years, 11.1 per cent; between 60 and 65 years, 3.1 per cent and 66 or more, 2.3 per cent. There is certainly a significant percentage who would be over 30 years of age. We have not identified it but they are probably the group who are in long-term accommodation.
What percentage was the group around the 50-plus mark?
Mr. McLoughlin
Between 50 and 59 account for 11.1 per cent.
They are a vulnerable group. I am sure all Members when they go canvassing have witnessed the poverty of these single people at that level.
I wish to direct a question on housing to Mr. Farrelly. Some 22,000 houses are planned on a multi-annual plan basis over the next four years. What number was planned or built over the previous four years?
We are building under 4,000 per year.
That would be 16,000 at a maximum and that is now increasing to 22,000. Does the number include affordable housing?
No, that is solely local authority housing.
Do you have a target for affordable housing?
We do, yes. We aim for 400 houses this year increasing gradually to 1,500.
How will you ensure local authorities avail of the affordable housing scheme?
This is a question on which we have issued circulars and we speak to managers. We are driving this forward. It is a question of increasing housing supply. We can go down as many by-roads and alleyways as we want but, in the final analysis, this is a supply problem. It is a question of working on a series of measures. For example, temporary storage facilities to service for housing is something we are pushing. On the northern fringe in Dublin, for example, we are confident the use of temporary facilities pending permanent facilities becoming available in four or five years' time can contribute up to 16,000 housing sites in that area.
We promoted the concept of increased housing density and we have also issued a report on it. We have taken significant steps under the serviced land initiative to ensure land will increasingly be brought forward to meet future needs. This of itself should be a major ecological boost in that the problem is being dealt with first hand on all levels. The expectation that there will be a crisis forever is itself raising house prices. We have also taken measures and invested substantial extra money to remove any significant infrastructural constraints in roads, water and sewerage, public transport and housing development. In the reports we have issued, the public transport dimension has been emphasised in terms of building houses outside the Dublin area and areas where public transport would be adequate to service people's needs.
We have dealt with the question of a strategic approach to future development, especially in the Dublin area and its hinterland, to achieve a more balanced distribution of population and economic growth.
What acreage in the Dublin area has been rezoned as a result of the adoption or the voting through of rezoning in the development plans of the county councils and the corporation?
I would not have full particulars on that but I have had discussions in the past fortnight with Dublin managers. Some of these are only being pushed through as of now. I would be reasonably happy. There are certain areas, such as the Dublin Corporation area, where it is a question of in-fill sites, etc., and there is not great scope. I believe a concerted effort is being made in the Fingal area and I would be reasonably happy with its ability to deal with the problem. I have had discussions with the manager.
Is there zoning for 100,000 houses left in the greater Dublin area?
There would be, yes.
Is that significantly higher than it was two or three years ago?
It would be significantly higher, yes. It is also a question of areas. The great opportunities for housing are in the Fingal and northern fringe area. There was a problem in terms of water and sewerage facilities. It would have been resolved under permanent arrangements in three or four years' time but that is too far in future. We have pushed hard for the use of temporary facilities, proposals are being brought forward and we are confident these will result in houses being built on land which would have been regarded as impossible for that purpose six to 12 months ago.
How many houses will be serviced by the water and sewerage facilities you are contemplating in the north Dublin area?
About 16,000 housing sites.
In what area is that?
The first 1,400 are on the way. It probably covers the area from Baldoyle to Finglas.
The level of ownership of social housing has increased by 45 per cent in the past two years. Does that relate to the total investment, the number of people who actually took it up or both?
That was the investment.
How many people availed of social housing? Was there an increase in that figure?
On a yearly basis, taking account of vacancies and other factors, there are approximately 10,000 new lettings a year. That takes account not only of the 4,000 houses provided but also of vacancies which arise.
On the question of loans, what effect does the increase in the income limit and the multiplier have on the cost of housing? If the income limit and multiplier were increased, would the cost of housing be pushed up significantly?
Absolutely. We would discourage any efforts by financial institutions to go beyond the two and half times main income plus once the subsidiary income criteria. The current problem is a supply one and the effect of increasing the limits and multipliers would be to further increase prices.
How can you convey to the various financial institutions the problems which arise on a national basis if they do not abide by the generally accepted norms in this area?
We talk to the agencies themselves and particularly to the Central Bank. The Deputy will be aware that the Central Bank has expressed concerns about some agencies going beyond the norms from time to time.
Some time ago, you suggested that it could be three years or so before supply/demand equilibrium would be reached in housing. Has that changed in any way as a result of various policies or economic circumstances?
Some indicators would suggest equilibrium could be reached sooner rather than later. Housing output is up 24 per cent in the first quarter of this year. I do not like to dwell much on the figures for a single quarter because statistics can be dangerous.
How many units is that?
Roughly about 12,000 houses.
Is that level of housing supply expected to continue or increase slightly over the remainder of the year?
I would be very happy if it were to continue. The 24 per cent increase was a very high one for a single quarter.
Demand is much more difficult to estimate because of immigration, employment and so on.
It is very difficult to estimate demand as there is a constant flow of people into the country.
I am very taken with your suggestion that there may be a ten-fold increase in the amount of voluntary housing constructed in the immediate future. Where and how will this happen? What steps have been taken to encourage it?
It will not happen immediately. The voluntary sector is currently building of the order of 500 houses and our aim would be to increase that to 4,500 or 5,000 houses. That will require massive effort. We are already talking to the voluntary bodies about this. Our view is that voluntary housing can make a far greater contribution than the mere provision of houses. The sector provides a management and back-up system to a vulnerable section of the community.
Who are these voluntary groups? Their identity should be publicised in order that people who are looking for houses can actually contact them to see whether they can acquire a house at a more reasonable cost.
There are 400 approved bodies throughout the country. The big operators would be RESPOND, St. Pancras, NABCO and others.
How could an ordinary young couple who either rent a flat or live with their parents become involved in one of these voluntary groups in order that they might have a better chance of being housed?
We have information leaflets but I consider it to be critical that local authorities make a greater commitment to the development, facilitation and support for voluntary bodies. In the past, voluntary bodies have had difficulty finding suitable sites. We would urge local authorities to facilitate these bodies by making sites available to them. It would be fairly well known in a rural area that voluntary bodies provide housing, although it may not be so well known in a city.
We all have a major contribution to make. The facilitation, development and expansion of the voluntary housing sector will not occur without major efforts being made. We must recognise that these bodies can make a major contribution and do everything in our power to assist them. We have become very optimistic about this area; some would say we are over-optimistic. In the current circumstances, we must do our utmost to deal with the supply problem. If voluntary bodies could operate on the same scale here as they do in other countries, they would make a significant contribution. They have already done wonderful work but the scale of output is relatively small.
Could you consider giving assistance to the voluntary bodies to advertise and promote themselves, particularly in city areas?
We certainly will; assistance is already provided through grant aid and so on. The major effort is to create a greater degree of co-operation between local authorities and voluntary bodies and, in particular, makeit easier for them to find sites. The avail-ability of sites at reasonable prices is a critical factor.
A total of 40,000 people are in receipt of rent supplements and 3,000 of that 40,000 are asylum seekers. This leaves 37,000 Irish nationals. Is there a reduction in the numbers receiving rent supplement and do you expect that number to decrease on a gradual scale in the future?
Mr. Sullivan
The answer is yes to both questions. The underlying trend in the numbers is downward when taking into account asylum seekers and those who receive rent supplement after they move on to one of the other schemes.
In relation to the rent subsidy scheme, is any effort being made at any level to ensure that those in receipt of rent supplement are properly dispersed throughout the community and not concentrated in certain areas? This has caused social problems for people who live and own their homes in these areas.
Mr. Sullivan
I do not think that issue is addressed in the report. My Department or thehealth boards do not decide where people choose to live.
We know that.
Mr. Sullivan
We respond to where people choose to live.
I do not know whether this issue is under investigation by anyone at any level but the same issue arises in relation to travellers and refugees. If we do not disperse people properly and share the burden throughout the community - this arose also in relation to drugs clinics - these schemes will come under fire at a micro level because some communities will say they are being lumped with the responsibility of taking these people. It would be useful to know if the interdepartmental committee has considered this matter. This is a major cause for concern. If we are to deliver what is a very important public policy scheme, there should be a strong social dimension to it.
There are two aspects to this. The health boards ignore completely housing, fire and safety and planning regulations in granting individual rent supplements. They have no regard to the numbers in any one house or in any one area and the effect of this on a community.
Mr. McLoughlin
We do not ignore this, but it is a fact that it is not part of our scheme.
In relation to asylum seekers and emergency accommodation, we contract with the owner of the property. Therefore, we can control to a much greater extent where asylum seekers are based in cases where we contract with the individual hostel or owner of property. We do this in co-operation mainly with Dublin Corporation, but when a person moves into private rented accommodation, they make the contract themselves. Therefore, we cannot control or determine the number of units in any particular area. We can do this in relation to emergency accommodation for asylum seekers but not for other groups.
Are you saying you cannot take it into account?
Mr. McLoughlin
If the individual satisfies us that they are within the terms of the scheme, that they have contracted with the landlord, we cannot say X number of units already exist with rent subsidy clients.
If this were to be implemented and if the burden were to be shared properly across communities, would it require change in your criteria or change in legislation?
Mr. McLoughlin
As I understand it, there would have to be a change in legislation because the contract is between the individual and the landlord.
I know you are aware of this problem and that it is not your fault but do you think this type of change would be desirable? The approach of the State to traveller accommodation and to drug clinics, for instance, is to try to share the burden across the community.
Mr. McLoughlin
That is because we are more in control of where we provide the service. However, we are not in a position to influence where accommodation is provided by landlords. It would be difficult to devise a scheme where there would be equity in sharing that burden. We can do this where we contract with an individual but we cannot do it in relation to individuals who come forward for assistance.
Could you provide the committee with a postal district breakdown of recipients of the rent subsidy scheme? What postal districts take the lion's share of these people?
Mr. McLoughlin
The breakdown is by community care area. For example, community care area 7 is the highest with 8,665 rent supplements. This includes Fairview, Dollymount, Ballymun and so on. The second highest area is area 2 which includes Ringsend, Ballsbridge, Rathmines to Dundrum and Sandyford. I can provide the committee with a map of the community care areas and give the corresponding number of rent supplements.
Can you break it down further in terms of the postal districts?
Mr. McLoughlin
I do not have it with me, but I will make it available to the committee.
This is at the core of one of my concerns that communities are being destroyed unintentionally by the Eastern Health Board.
Mr. McLoughlin
They are possibly being destroyed by the scheme, but not by the Eastern Health Board.
By the implementation of the scheme by the Eastern Health Board. First, areas are being destroyed because the health board thinks it has no duty to take account of planning regulations, housing regulations or fire regulations. People are receiving subsidies in houses that should be deemed unfit for human habitation. Second, the number of subsidies being granted in particular areas is having the effect of dramatically running down the area because of over-occupation of too many houses. Rubbish is thrown around and there is serious dilapidation of too many houses. It is wrong that the Eastern Health Board should find itself in this position.
The Secretary General, Mr. Sullivan, wrote to the committee yesterday - we received the correspondence this morning - answering questions in relation to payment of supplementary welfare allowance rent supplements to tenants of landlords who themselves or whose premises may not comply with regulations made by the Minister for the Environment and Local Government. In his note Mr. Sullivan states that article 9(2)(g) of the Social Welfare Consolidated Supplementary Welfare Allowance Regulations, 1995, requires health boards to satisfy themselves that (a) the residence in respect of which rent supplement is claimed is reasonably suited to the residential and other needs of the claimant and (b) the rent payable by the claimant is just and proper, having regard to the nature, character and location of the residence. He goes on to say that the national administrative procedures manual issued to each community welfare officer states under the heading "Where Standards of Accommodation do not Comply with the Housing Regulations Standards for Rented Housing, 1993" as follows:
A client may be considered not entitled to rent supplement if the accommodation he or she resides does not meet the standards laid down in the above regulations.
Which person is correct? Is Mr. Sullivan stating in his notes to the committee that there are regulations and guidelines which the health board should implement?
Mr. Sullivan
I have set that out in my presentation. That is the situation and that is taken from the guidelines that are issued.
What does Mr. McLoughlin say to that? This is in direct contravention of everything he told the committee today and on previous occasions.
Mr. McLoughlin
I do not accept that it is in direct contravention. Our community welfare officers' job is to assess a person's entitlement to a scheme. We are not in a position to go ask if a building suitable from a planning point of view or if it complies with the fire regulations. That is not their function. That is a function of the local authorities. If the scheme is amended to say we can only pay rent supplements if a property complies with all the regulaqtions, we would not have a difficulty with that. However, we are not in a position to block it. If we feel people are in accommodation which is not appropriate, weadvise them of that and refer them to the local authorities.
Are you aware of the National Administrative Procedures Manual in relation to this matter? Are you conversant with it?
Mr. McLoughlin
I have not seen that manual for the purpose of this committee. I have not seen Mr. Sullivan's submission. It does not contain the same informational advice that we got previously in relation to our duties with regard to the scheme.
Here we have a conflict of evidence. Are you aware of the National Administrative Procedures Manual?
Mr. McLoughlin
I am aware of it but I have not read it recently.
Mr. McLoughlin has repeatedly told this committee that there is no rule requiring him or that he could not take into account standards. Now we have been told by the Secretary General of the Department of Social, Community and Family Affairs that there is a provision in the National Administrative Procedures Manual of which Mr. McLoughlin appears not to be aware.
Mr. McLoughlin
We sought and received clarification on this issue in 1998. It was in response to a letter from the Chairman on responsibility for policy in these areas and restrictions on individuals in a particular area. We received a response from the Department of Social, Community and Family Affairs which appears to be at variance with what I am now hearing for the first time.
Do you have that response with you?
Mr. McLoughlin
Yes.
Will you read it to the committee?
Mr. McLoughlin
It states as follows:
I refer to your letter dated 4 December 1997 and accompanying letter from Mr. Jim Mitchell, TD, addressed to your programme manager which we discussed at our meeting. As you are aware the responsibility for housing policy lies with the Department of the Environment and their agents, the local authorities. This would include any matters relating to planning permission, registration of landlords, housing regulations, fire safety, etc.
If, however, the health board feels that a premises where a rent supplement is being paid is not up to the fire/safety standards they would take appropriate steps to assist the claimant in securing more suitable accommodation elsewhere. Entitlement to a rent supplement is determined by the health boards in accordance with the appropriate legislative provision. The purpose of rent supplements is to assist with reasonable accommodation costs of eligible persons living in private rented accommodation who are unable to provide for their own accommodation costs from their resources and who do not have accommodation available to them from another source.
Deputy Mitchell's suggestions would confine and restrict the payment of rent supplements to individuals in the Eastern Health Board area in a time of acute housing shortage. The legislation cannot discriminate against the individual, confine or restrict a person's freedom of choice regarding the accommodation or the location where they choose to reside.
Finally, any agreement between the landlord and tenant is private and clauses relating to noise, cleanliness, etc. can be inserted if agreed by both parties. Previous legal advice in this area when a dispute arose relating to damage to property was that this Department had no function in the matter as it is a private matter to be settled between the tenant and the landlord.
Who signed the letter?
Mr. McLoughlin
Mary Lally, Assistant Principal, Department of Social, Community and Family Affairs on 22 January 1998.
What does Mr. Sullivan say to that? That letter seems to conflict with his letter to the committee of yesterday's date.
Mr. Sullivan
I do not think it does.
I must be an awful fool. I am sick of this issue being confused by jargon. The committee has been misled. This is a very serious problem. We have been continually asking questions about this problem. We have been told up to today that there were no regulations. Now Mr. Sullivan has told us that there are regulations which is at variance with everything we have been told before today by Mr. McLoughlin and your Department.
Mr. Sullivan
At the last meeting I read aloud what I inserted in a written note today. Mr. McLoughlin read out from that letter on the last day we met the committee. The guidelines say that a client may be considered not to be entitled and this may occur where this happens. There are no rules which say the accommodation has to be of a certain standard. Housing regulations are a matter for the local authorities in the first instance. It is not our responsibility nor, as I understand it, that of the health board. Where we are aware that a local authority has given a decision to the effect that when a particular premises is not up to standard, then rent supplement should not be paid. If it comes to the attention of the chief welfare officer in the health board that a premises is not suitable then they are encouraged to request a decision from the local authority in relation to that.
We go one further and we say if you come across someone in substandard accommodation you should give them time to find a different place. The control and maintenance of standards and registration are the responsibility of local authorities. If we were to try to do it or if we had to investigate it down to that level in every case that is presented to us, there would be a lot of difficulties for the scheme. If we are aware that it happens or that a decision has been given by the local authority, the supplement is not payable. I do not think there will be any disagreement between Mr. McLoughlin and myself in relation to that issue.
Mr. McLoughlin
I agree with that.
Both of you may agree with it but you are confusing me. This situation has gone on for far too long. I am tempted to propose to the committee that we bring both of you on a tour of the parts of the city that you are destroying through a total lack of regard for the regulations on housing, planning or fire. All we need is a fire in one of these houses where many people will be killed and you will all run for cover. Whole communities are being destroyed because your organisations disregard the other laws and regulations of the State. I am vexed at the play on words which mask reality. Mr. Sullivan quoted from the National Administrative Procedres Manual under the heading "Where Standards of Accommodation do not Comply with the Housing Regulations Standards for Rented Housing, 1993" as follows:
A client may be considered not entitled to rent supplement if the accommodation he or she resides does not meet the standards laid down in the above regulations.
I and other public representatives from my constituency met Mr. McLoughlin and his two predecessors over the years to discuss this subject because of the impact it is having on our constituency. Earlier Deputy Conor Lenihan spoke about the impact this problem is having on his constituency. Other Deputies from the southside have voiced the same complaints. Despite repeated efforts on our part we are now being told that there is provision but it is ignored. This is the best case to support the transfer of the scheme to the local authorities because they are the housing and the planning authority. But it is not good enough for the Secretary General or Mr. McLoughlin to say that it is not up to them to observe the other laws of the land because they do not come under their Department. They must observe the laws of the land, the planning laws, the fire safety laws and the housing laws.
Mr. Sullivan
As I said before, we observe the laws of the land as best we can. There is no question that my Department flouts the laws of the land.
You turn a blind eye to them. It is the same thing. There should be a requirement that no rent subsidy is paid if the dwelling in question does not meet the requirements of other laws of the land.
Can the health board or the people who operate this scheme give us information how many dwellings that are not complying have come to their knowledge to date? If we request that information I would like to get it. I do not want somebody to put down a freedom of information request to obtain information that this committee has not been given. Is there any way of arriving at a figure? Do they have any evidence from their own records how many people have actually been given the rent allowance despite the fact that they may have known that the accommodation was substandard or in breach of legislation?
Mr. McLoughlin
We would not pay the allowance if the accommodation was substandard or in breach of legislation. If the local authorities advise us of a particular property, then we would not pay the allowance. We have already heard of legal difficulties in relation to landlords and registration issues that are before the courts. Our officers, as of now, are not in a position every time a client applies for rent subsidy, to check whether the client's accommodation is in compliance with planning permission and fire regulations. The role of welfare officers is to assist people in finding accommodation. They are not planning officers or trained to assess whether accommodation complies with the fire and safety regulations. They visit the premises and visit them subsequently. They will then determine whether they should refer it to the local authorities. We do not have a problem in only paying rent supplements if a premises is in full compliance with regulations, but certainly I know the local authorities would have a problem with that in relation to a degree of compliance with registration and because of court cases which are pending.
Mr. McLoughlin, are you saying they might refer it on the subsequent visit?
Mr. McLoughlin
If they found that a place was unsuitable, then they would refer that to the local authority.
How many referrals have taken place in your area?
Mr. McLoughlin
I do not have that information but I will supply it.
Maybe we could have a breakdown as to where the referrals are coming from and placed in the geographic context of postal districts in the area. I do not want to burden you with work. It seems that certain areas are more affected than others. It is not fair to the people living in the worst affected areas who are bearing the brunt of this problem.
Mr. McLoughlin
Chairman, I reject the comment that we are not working in those areas and do not see what is happening. I am aware of those areas and I have visited them in the past. They are areas which have a lot of deprivation. Both myself and my staff know the situation on the ground but we cannot influence where landlords provide property for people who can avail of the scheme.
It is my opinion that there should be a requirement on State agencies applying any State schemes to observe all the laws of the land. In this case, if there was a simple provision that stipulates that, before a rent supplement is granted, there should be a certificate from the local authorities that the dwelling in question meets planning and housing regulations. It is a simple provision. I ask the Secretary General of the Department of Social, Community and Family Affairs to consider changing the regulations and the administrative procedures to that effect. I would also ask him to consider what are the implications and why this should not be done.
Is the Secretary General of the Department of the Environment and Local Government is he happy that a scheme operated by another Department or by health boards on behalf of the Department so ignores the planning and housing laws and regulations which come under his Department?
There are a number of Department of Environment and Local Government regulations which relate specifically to the private rented sector. Under these regulations there are the housing standards regulations, rent books and registration regulations. We are satisfied as to compliance levels with these regulations. There are 25,000 registered rented dwellings. At the last census of population 1991-6 there were 80,000 rented dwellings. The problem is you cannot say it is 25,000 out of 80,000 that should be registered because there are a whole series of exemptions on which we do not have particulars.
We are constantly in touch with local authorities to bring up the level of compliance. As I mentioned earlier, there are some court cases which are awaiting judgments which probably meant some landlords held back a little bit. I have a concern about compliance generally. We are constantly putting pressure on local authorities to ensure more effective enforcement. In relation to this, we would also need to look at the implications of any actions taken.
As regards the Department of the Environment and Local Government regulations, we have brought about significant improvement in enforcing them. The Chairman asked if I am happy with the level of compliance. No, I am not. We are constantly pressing the pointwith local authorities and will continue todo so.
I am interested to know if the Secretary General of the Department of the Environment and Local Government has given any consideration to the way this scheme ghettoises particular areas resulting in rundown areas. Does the notion of providing some form of social spread enter into calculations in terms of housing. It seems that other countries are able to mix social housing with private housing but that does not seem to happen here. People in receipt of rent subsidy are shunted into particular areas and the tone of the area is reduced as a result because there is no proper mix.
The health boards have recognised that this requires legislative change. Has that ever occurred to anyone in the Department? Let us be fair to the health board, they administer this scheme. They do not have the right to go further than that. The Department of the Environment and Local Government sets the needs and standards in terms of housing policy.
They have been ignored in this case.
Has it ever occurred to anyone that there should be a legal change?
We said at the last meeting that the supplementary welfare system is very good and we recognise that the community welfare officers do a great job in difficult circumstances. We are not blaming community welfare officers but there are either inadequate regulations or the regulations are not being observed. In the meantime, much damage is being done to communities. The point in relation to the social mix is absolutely right. While we are trying to uplift the whole city, areas have been dramatically rundown because of the impact of this scheme and non-compliance with the housing and planning laws and fire regulations.
The Department is very committed to a better mix of houses and it is something on which we feel very strongly in our dealings with local authorities. We do our best to ensure that this is applied. It is an area we will be looking at through future legislation to see what other measures can be brought to bear to deal with that. As far as this scheme is concerned, it is demand led to some extent. Under this scheme a person seeks suitable accommodation and then applies to the health board for assistance.
I cannot go into the details as to the operation of that scheme. An interdepartmental committee has looked at the issue in terms of better integration of this scheme with the whole social housing and local authority programme. In looking to the future I am sure that is the way forward.
But Mr. Farrelly is not looking at the issue of how the people who receive supplementary welfare allowance could be dispersed to different housing categories across the city. This talk about the interdepartmental committee is complete bunkum because one is not looking at the substantive issue which is how can we share, rather than concentrate, the burden of providing for these people. Is it correct to say that is not even on the agenda?
I cannot take responsibility for the administration of the scheme.
That is not what I asked.
It is a demand led scheme. I suppose people have to take accommodation where it is available for letting. That raises a far bigger problem. I have a certain sympathy with my colleagues in that regard. I am not familiar with the details of the scheme but I assume the choice is limited.
I understand the limited choice dimension to it but Mr. Farrelly is employed and we are employed to overcome these problems.
I propose, in respect of that one question, that we ask for an explanation, within a month, why the housing, planning and fire regulations are not compulsorily observed before a rent subsidy is granted and, second, if a scheme could be devised whereby there would not be in any one area a concentration of rent subsidy so large as to contribute to the running down of an area. Does the committee agree to request that information? Agreed.
Can the committee have statistics on the following: the number of new houses built by the respective local authorities throughout the country last year and the number likely to be built this year as opposed to houses that have been retenanted and so on; the number of shared ownership loans approved and taken up by each of the local authorities last year and the likely number this year; the number of SDA loans approved and taken up last year and this year; the number of private sites offered to suitably qualified potential tenants in each local authority area; the number of voluntary housing units provided last year and the likely number this year and the number of persons on the approved housing list of each local authority area?
The vast bulk of the information sought would be available in the Department's annual housing statistics bulletin which is in the Oireachtas Library. I can pass on a copy of it. To the extent that information sought is not in the bulletin, we will do our best to make it available.
I do not wish to be informed where I can read information. I wish to receive a response to the precise request I made in relation to statistics. With no disrespect to the Secretary General, if I want information from the Dáil Library I can get it there. I have a ministerial answer.
Any information required, to the extent that we can provide it, will be provided. That is the clear-cut answer.
That is exactly what I want.
Can the table or a table be extracted? The overall concern of the committee in relation to the rent subsidy scheme is the escalating cost. That this has been looked at by an interdepartmental group shows the matter is being considered by the Department and the Department of Finance. The report was concluded only yesterday. I hope this committee's interest in it has helped to bring it to a conclusion.
To recap - the figures are quite alarming. We are now spending over £100 million, 62 per cent more than three years ago, on the rent subsidy scheme. It is obvious this cannot continue and the issue needs to be addressed. This is happening at the same time as another phenomenon is developing - under - occupation of houses. There are many large houses throughout our cities and towns occupied by just one person. Under-occupation is a major issue where we have a huge housing crisis. Some of this, as is adverted to in some of the documentation received, can be caused by social welfare rules, such as the living alone rules and the benefit and privilege of living at home rules. I ask Mr. Sullivan if any studies have been done to quantify the cost of, say, easing the living alone criteria. If an aged parent takes one of her children back home, that does not lead to a direct cost but if that child was to receive unemployment assistance on his or means rather than the parent's means - abolishing the benefit and privilege rule - what would be the cost involved?
Mr. Sullivan
An exercise has been done on the cost of abolishing the benefit and privilege rule. The cost is £20 million.
Is that £20 million per annum?
Mr. Sullivan
Yes. I may be wrong on that figure, I will have to check it.
But some studies have been done on the cost.
Mr. Sullivan
Yes. We have some indication of the cost. Essentially unemployment payment is paid to someone who would not otherwise get it.
There has been some easing of the rules in recent years. In the past if your parents' means were above a certain level you did not qualify for unemployment assistance if you stayed at home. The incentive was to get out of the home, get a rent subsidy, a medical card and all would be honky dorey. What is the rule now?
Mr. Sullivan
The rule is that the benefit and privilege provision takes into account the parental income for the purposes of a means assessment for an individual.
Are not the first so many pounds discounted?
Mr. Sullivan
There are different categories. If an old age pensioner has a child living with them, they would still qualify because of income levels. It has much to do with income levels. If, say, middle class people have somebody with them, their children would not be entitled to unemployment assistance on the basis of parental income. If you wish, Chairman, we can send a note on the benefit and privilege rules.
To summarise, my concern is that we have an escalating housing crisis, an escalating demand for housing subsidy and at the same time an escalating number of homes under-occupied. The under-occupation can be accentuated by social trends but also by social welfare rules. The living alone allowance, the benefit and privilege rule - listed under unemployment assistance - and the rent subsidy provision together are an incentive to leave home and add to the housing demand. It occurs to me that it is time to review these rules given the housing crisis and the escalating cost of rent subsidy.
We should be almost doing the reverse, giving young people an incentive to stay at home because it appears to be cheaper. It would also mean that elderly people who may be living in fear would have somebody staying with them which would make them feel safer, and the young people could also share the heating and lighting costs, etc. Has any consideration been given to relaxing or reversing these rules?
Mr. Sullivan
These matters are examined periodically. In terms of the people receiving rent supplement, about 20 per cent are under the age of 25. There is no evidence of a mass exodus of young people from their homes to avoid the benefit and privilege rule and claim rent supplement.
That 20 per cent represents 8,000 in the Eastern Health Board area, is that not right?
Mr. Sullivan
No, 8,000 overall and 40,000 nationwide.
So 20 per cent, that is 8,000 people, are getting rent subsidy?
Mr. Sullivan
Yes, under the age of 25 years.
Single people.
Mr. Sullivan
Not necessarily single people.
They are just under the age of 25?
Mr. Sullivan
Yes. As I said earlier, if an old age pensioner had somebody living with them, the benefit and privilege rule would not come into effect in those circumstances.
It would if they had other income.
Mr. Sullivan
If they were over the threshold, but in the generality——
I know that but if they are living only on their old age pension it would not because that would be their only means. If they had a second pension or other income——
Mr. Sullivan
Just because they have an income does not mean they will be excluded. It would depend on the level of the threshold. The living alone allowance is purely an additional allowance paid to people living alone. The question arises that if they are no longer living alone - I think the suggestion would be that one would be paying it in those circumstances.
The living alone allowance was introduced to help address the real needs of people living alone, and it would be absolute folly to suggest it should be discontinued. On the other hand, I know of many cases where the parents cannot wait for their children to leave home because their very presence in the house is costing about £30 per week. If a young person is unemployed, he or she is entitled to a rent subsidy, a medical card and unemployment assistance once they leave home. That is ridiculous given the current housing crisis and the escalation of rent subsidy. At this stage, we could nearly offer incentives to young people to encourage them to remain living with their aging parents, not disincentives.
Does the Department of the Environment and Local Government have any figures for under-occupation or has any study been done on that? I am talking about large houses occupied by one person.
We do not have hard figures on that. The census would provide some feedback in that regard.
It is common to see an elderly person living in a large house which they can no longer maintain. One can pick them out when canvassing a road. Often these people have a valuable property but they are living in poverty, yet we have an unmet housing demand. Should we urgently examine these issues afresh to see if a better balance can be achieved in the circumstances?
The Chairman has made a good point and I would be interested to hear, in the context of the housing crisis, whether the Department of the Environment and Local Government sees a role for itself in encouraging the development, as happened in the UK, of what is called equity reversion. There have been some successful schemes in the UK, and some rogue schemes operated by financial institutions of one kind or another, which allow a person to sell an equity stake in their home while continuing to live in it. Obviously when the home is sold the person would not have the full percentage interest in it. That has not happened here, although I know one of the banks was interested in the idea. Does the Department see a role for itself in terms of encouraging this phenomenon?
There is a possible role for that but the main purpose of this scheme, and we have discussed it from time to time with financial institutions, is to give an income to, say, older persons over the period of their lives at a cost of disposing of a proportion of the equity of the house. It does not address the problem we are discussing of under-occupancy in that the person would continue to live in the house but it may address the problem of maintenance of the house and, in particular, giving an income to the person over their remaining years. It will not get a person out of a large house and a family into it.
The record from the UK shows that these schemes, once introduced, add to the mobility factor, that more people move out of their homes. Being able to draw down the equity means that other options are available, such as moving to smaller accommodation.
That is something we will continue to examine. We are aware of the system in the UK, some schemes are good, others are not so good. We should be clear about that.
Is anybody currently operating such a scheme? Is the Bank of Ireland examining it or——
No one is currently operating it.
Has the Department had discussions with the financial institutions with a view to encouraging them?
We have had discussions from time to time but they never reached the stage of being serious about bringing them to finality. It is something we have been aware of but we have not pushed it, to be blunt about it.
We have talked a great deal about that matter and we are concerned about it. I have raised questions to which I would like a response within a month.
And the statistics.
And the statistics that were requested. Mr. Farrelly, that is all we wanted to discuss with you today. Thank you.
The witnesses withdrew.