Dáil Éireann Debate, Wednesday - 15 December 2004
29 Mr. Naughten asked the Minister for Social and Family Affairs the maximum level of rent which a person may incur and still qualify for a rent supplement as determined by each health board; and if he will make a statement on the matter. [33506/04]
Amharc ar fhreagra88 Mr. Stanton asked the Minister for Social and Family Affairs the way in which he intends to keep the minimum contribution of all recipients of the supplementary welfare allowance rent and mortgage supplement under review; and if he will make a statement on the matter. [33489/04]
Amharc ar fhreagraI propose to take Questions Nos. 29 and 88 together.
The supplementary welfare allowance scheme administered on my behalf by the health boards provides for the payment of a weekly or monthly supplement in respect of rent or mortgage interest. This supplement is intended to assist with reasonable accommodation costs of eligible people who are unable to provide for their accommodation costs from their own resources and who do not have accommodation available to them from any other source.
Rent and mortgage interest supplements are subject to a means test. They are normally calculated to ensure that after payment of rent or mortgage interest, an eligible person has income equal to the rate of basic supplementary welfare allowance appropriate to his or her or the family circumstances, less a minimum contribution. The minimum contribution is €13, which each recipient is required to pay from his or her resources. I have decided not to increase the minimum contribution this year. I will review this again in the context of next year's budget, taking account of the real value of increases in social welfare payment rates and developments in the local authority social housing sector.
There has always been a limit on the level of rent an applicant may incur and still qualify for a rent supplement. The limits take the household size and other relevant circumstances into account. This is to ensure that the rent is reasonable and that the health board is not subsidising the cost of overly large or overly expensive accommodation. As Deputies are aware, regulations were introduced in November 2002 which provided for holding the maximum rent levels until the end of December 2003 at the values that had been set by the health boards at that time. Further regulations, signed in December 2003, set out the maximum reasonable rent levels to be used as the basis for calculating the amount of rent supplement payable to various family sizes for the period from January 2004 to 30 June 2005. These range from €85 per week to €115 per week in the case of a single person, and from €693 per month to €1,200 per month in the case of a family with two children. I have arranged for my Department to send details to the Deputy of the levels appropriate to the different family sizes across all health board areas.
Any changes that might be required in the level of the maximum reasonable rent limits will be considered during the first half of 2005. As was done on previous occasions, the views of each health board will be sought regarding the operation of existing limits within its functional area. Consideration will also be given to the information supplied by the boards about cases where rent supplements were awarded in exceptional cases where the maximum rent limits were exceeded. Data from the Central Statistics Office relating to rent levels in the private rented sector will be examined, and any views from relevant interest groups will be taken into account in reaching a decision on the appropriate limits.
Does the Minister agree that rent levels in some cities, especially Dublin, have reached very high levels and that the type of property available to people in the bracket he has noted who qualify for that level of rental income would usually be in very bad condition and inappropriate? How soon will the Minister have the revised scheme ready? It is urgently needed because people are experiencing hardship as they cannot afford to rent appropriate accommodation because rents are too high.
The review will be completed during the first half of 2005. For my own sake as well as that of everyone else, it is worth putting on the record that rent supplement recipients account for approximately 40% of the private rented market. That means that by a long shot, the State is the largest player in that market. It will be appreciated that accounting for such a percentage of the entire sector can distort a marketplace. The market will almost certainly follow whatever cap we put on the relevant allowances, so we must be very careful in putting a figure on rent, for example in allowing €1,200 per month for a family with two children. Once such a figure is allowed for, that 40% of the private rented sector will almost automatically pitch the rent at that level. If we allow a figure that is too high, there is substantial evidence, particularly since we are such a large player in the market, that such a level of rent will be set. The Government is not just a rent payer in the marketplace, but is a rent setter.
Last night I informed the House that rental costs had fallen by about 3% between January 2004 and November 2004. Facts and figures are available which show that rental costs are coming down because of the substantial supply of apartments for rent. One can see blocks of apartments everywhere now and there is close to an excess of supply in the private sector. We must therefore be careful how we set the figures.
Is the Minister aware of the practice, and the extent to which it may exist, of landlords setting official and unofficial rents whereby those in receipt of rent supplements pay their official rent supplement and their personal payment as part of the rent, but are asked by the landlord for an unofficial rent top-up? Is the Minister's Department taking any account of this practice and, if so, are there any measures in place to stop the practice?
We are aware of such allegations. To date we have no hard evidence that such activity exists but from anecdotal evidence we believe it does. The structure of the system also lends itself to the sort of the practice of which Deputy Boyle speaks, given that the State accounts for about 40% of the entire rental market. We continue to examine that issue to see if we can tighten it up.
