THE GOVERNMENT WON’T be increasing rent supplement rates, saying that if it did, it could lead to rental inflation.

But the news has been criticised by the Peter Mcverry Trust, which works with the homeless.

The charity said it was disappointed with the news, and its CEO Pat Doyle commented:

The gap between market rents and the rent supplement caps has been growing wider over the last 18 months. The decision not to raise rent supplement rates may lock people in homeless services. Only yesterday did figures published by the PRTB show that rents rose by 9.5% in Dublin in 2014.

Without the chance to secure private rented accommodation we are likely to see people spending longer periods of time in homeless services as they are forced to wait on new social housing units coming on stream as the private rental market has effectively been shut off for poor and vulnerable households.

The Department of Social Protection published a review of the maximum rent limits under the Rent Supplement scheme, saying that one of the key messages is the supplement “continues to play a vital role in housing families and individuals”.

It supported more than 70,000 people this year at a cost of €298 million.

Rental inflation

The review found that increasing rent limits at this time could potentially add to further rental inflation in an already distressed market.

Between the Rent Supplement scheme administered by the Department of Social Protection and the Rental Accommodation Scheme administered by the Department of the Environment, the State accounts for a third of the private rented market.

The review notes that the Department of Social Protection therefore has a responsibility not alone to Rent Supplement recipients but also to the market as a whole, including all those in private accommodation.

It found that increasing the rent limits would have potentially negative effects, including:

• Providing an impetus for current Rent Supplement landlords to renegotiate their lease agreements to the new limits, impacting on all existing recipients; and
• Creating new rental floors for all properties in the sector, meaning rent increases for those not in receipt of Rent Supplement.

The Department will instead “continue to allow for flexibility in assessing customers’ accommodation needs through the National Tenancy Sustainment Framework”.

It will continue to monitor the measures in place “to ensure that the appropriate supports continue to be provided for Rent Supplement recipients”.

Reaction

Threshold strongly criticised the news, saying that the report “fails to recognise the desperate plight of rent supplement tenants and those seeking accommodation under the rent supplement scheme”.

Bob Jordan, Threshold’s Chief Executive, said the system was “not fit for purpose”. He added that it was “unusual” for the report to recommend no change to the rent supplement limits.

The decision was also criticised by the Fianna Fáil spokesperson on Social Protection, Willie O’Dea, who called it “disgraceful”.

Ruth Coppinger of the Anti Austerity Alliance condemned the decision, saying that it was a “hands-off approach” that could lead to homelessness.

The full report can be read on the Welfare website.

Read: ‘I’m sleeping on a friend’s sofa on the verge of becoming homeless, I don’t know what to do’>