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rental supplement

Joan Burton says rent supplement review a "positive" move

Social Protection Minister says December review of rent supplement payments – which cost the State €503m in 2011 – was vital to reflect real rental prices but that ‘no-one will be left homeless’ by changes.

MINISTER FOR SOCIAL Protection Joan Burton has said that the recent review of rent supplement levels “has had a positive impact on those working and renting”. She also said that the changes had ensured that “rent supplement tenants are suitably housed”.

The rent supplement scheme is intended to provide “short-term income support” to people who are renting non-State owned accommodation but whose income is not enough to meet the rental costs because they are either unemployed or working on a part-time basis.

Burton made her remarks in a commentary on the report of rental asking prices and stock of rental properties for the final quarter of 2011. In it, she noted that rents have stabilised over 2011 and even as back as far as December 2009. She wrote:

The issue of rents stabilising since December 2009, given the deterioration in both net disposable incomes and employment opportunities, does pose the question as to whether an element of this relates to the pricing floors available to landlords in the form of rent supplement limits. It is essential that rents are allowed to stabilise from a natural balance of supply and demand, rather than as a result of a price floor funded by the taxpayer.

To this end – allowing rents to “stabilise from a natural balance of supply and demand” – Burton argued that there had been an urgent need to review how the State intervenes in the private rental market by way of providing the rental supplement. Some figures from the Department of Social Protection:

  • Rent supplement expenditure by the State increased from €369m in 2005 to €503m in 2011
  • The number of people claiming rent supplement rose from 60,200 in 2005 to 96,800 by end 2011
  • Rent supplements are paid out for around 40 per cent of private rented properties
  • Over 55,000 people have been on the rent supplement scheme for 18 months or more

Burton said that as the rent supplement scheme “is not designed to be a housing solution” but rather “a temporary income support” for people while they are “temporarily unemployed”, it is “essential” that a review take place:

It is essential, therefore, that State support for rents are kept under review, reflect current market conditions and do not distort the market in a way that could increase rent prices for others, such as low paid workers and students.

She said that recent readjustments to the maximum rent limits available to those in receipt of rent supplement – carried out in June 2010 and December 2011 – were done so to try and align them with both the availability of rental stock and the average rental prices on an area-by-area basis (rural rental prices have largely been falling, while some urban areas have seen some slight increases).

Burton asserted that no-one will be made homeless by the reviews. She wrote of December’s rental limit review:

The experience of the previous review (in June 2010) showed that landlords, generally, accepted the revised limits, with no case of homelessness or undue hardship by rent supplement tenants. It is accepted that there will be isolated cases after this review, where landlords will refuse to reduce the rent they seek, and in those instances tenants will be expected to secure alternative accommodation.

Burton claimed that in those cases, tenants would be given “reasonable time” to find new accommodation and that her Department would “ensure that rent supplement recipients’ accommodation needs are met”. She said: “There will be no incidence of homelessness due to these changes”.

Read Joan Burton’s full remarks on the review of rent supplements here>

Number of available rental properties hits three-year low>

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