Rent supplement provides short-term income support to eligible people 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. Since 2005, rent supplement expenditure has increased from €369 million to a provisional outturn of €503 million in 2011. The number of persons claiming the allowance increased from almost 60,200 persons in 2005 to over 96,800 as at end 2011, a 61% increase.
As the Department currently funds approximately 40% of the private rented sector it is essential that State support for rents are kept under review, reflect current market conditions and do not distort the market in any way. The new maximum rent limits which came into force on 1 January 2012 are in line with the most up to date market data available. The emphasis of the rent limit review was to ensure that value for money is achieved whilst at the same time ensuring that people on rent supplement are not priced out of the market for private rented accommodation.
Staff administering rent supplement have the authority to set levels lower than those provided for in the regulations, in respect of sub-divisions of their functional areas, where this is appropriate. This allows for lower rent levels to apply in certain locations within counties reflecting local market conditions.
The Residential Tenancies Act 2004 defines the term market rent in section 24 (1) as the rent which a willing tenant not already in occupation would give and a willing landlord would take for the dwelling, in each case on the basis of vacant possession being given, and having regard to the other terms of the tenancy, and the letting values of dwellings of a similar size, type and character to the dwelling and situated in a comparable area to that in which it is situated. Under the legislative provisions governing rent supplement, the Department's relationship is with the tenant; the tenant makes the application for rent supplement and payment is made to the tenant. Rent supplement is specifically for the benefit of tenants to assist them with their accommodation needs. There is no direct relationship between the landlord and the Department in the administration of the scheme. The Department does not become involved in the choice of accommodation by the tenant and as such the issue of competition does not arise.