Landlords will be the sole beneficiaries of a €55m bonanza in additional rent supplement, it has been claimed.
Increasing by €55m the spend for rent supplement will deliver “just one, single additional three-bed house” and will simply line the pockets of landlords, according to internal government documents, seen by the Irish Examiner.
And the social-housing list is estimated to be overstated by 25%, because the names of dead people have not been removed.
This year, the Government will spend an additional €20m, and €55m in a full year, on rent supplement, because of an agreement between Fine Gael and Fianna Fáil to increase payments by 15%. The deal was done, during the talks to form the Government, a number of weeks back.
Calls to increase rent-supplement payments have escalated, as the housing crisis has bitten hard in the past 18 months. The previous, Fine Gael-Labour government had been reluctant to increase rent supplement to address the housing crisis, and new internal documents from the Department of Social Protection have raised alarm at the agreed increase.
According to the documents, the additional spend will, at best, deliver an additional 150 units, including just one three-bed family home in the Dublin area.
The department is extremely caustic about the additional spend, saying it represents a “disporportionate cost” to the exchequer and the taxpayer.
The increase has been severely criticised by the former junior minister at the Department of Social Protection. Senator Kevin Humphreys said the increase was a bad deal for the taxpayer and would not help those affected by the housing crisis. He said the only solution was to increase the supply of homes.
Mr Humphreys said: “Fine Gael have agreed with Fianna Fáil to increase the rent supplement by 15%, but how many additional units will that deliver? Barely none.
“To raise the rent supplement, and Fine Gael have accepted it will not create one extra single unit, it will cost €55.5m of taxpayers’ money. How does that make any sense?”
Fine Gael TD for Kildare North, Benard Durkin, conceded that the additional spend would not improve the delivery of homes.
“Not one is the answer. Increasing rent supplement is not going to deliver one additional unit,” he said. “Not one extra house will it deliver. It is merely bringing up the income of whoever is renting the house to an acceptable market level.
“The impact of increasing limits, at a time of constrained supply in the private, rented market, will increase costs disproportionately for the exchequer, with little or no new housing available to recipients, i.e. increase the amounts given to landlords,” Mr Humphreys said.
The Department of Social Protection says that increasing rent supplement when there is a supply crisis only benefits the landlords and does nothing to increase the supply of homes.
And it has emerged that the taxpayer will pay €46m this year to house homeless families in hotels, which the new housing minister, Simon Coveney, says is “unacceptable”.
Rent supplement is the State’s means of housing families and individuals who cannot afford to do so by themselves. The scheme is supporting 57,600 people, at a cost of €267m, this year.
There were 20,100 rent-supplement tenancies awarded during 2015, and 3,000 during the first three months of 2016.
In addition, the department, in conjunction with Threshold, operates a special protocol in the Dublin and Cork areas, where supply issues are particularly acute.
Nationwide, 7,570 rent supplement households have received help to retain or acquire rented accommodation through increased rental payments.
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