Tenants in receipt of rent supplement are being told they must negotiate a better deal with their landlords — or find a new place to live.
The order has come from the Department of Social Protection, which is giving people eight weeks to locate to a new home if negotiation with landlords does not work.
In the last budget, rent supplement, paid to people living in private rented accommodation who cannot provide for the cost themselves, was reduced by 13% on average.
New rules state the amount paid by tenants to landlords must not be above a maximum rent level set for their county or area. It is hoped this would have the effect of forcing landlords to reduce rents.
However, it is not clear if this is happening on the ground.
A St Vincent de Paul hostel manager said he has been dealing with several cases whereby people are ending up on the brink of homelessness because of the new policy.
Terence O’Neill, who manages a men’s hostel in Waterford, said while the initiative was to force landlords to lower rents, in some cases people were paying the additional rent so landlords were still getting the same money as before.
“You are dealing with landlords who are under pressure with banks in a lot of cases. They are not reducing rents and are adamant about it.”
A letter seen by the Irish Examiner states: “If your landlord refuses to reduce the rent you make seek alternative accommodation… Where negotiation with landlord fails, in order to continue to receive rent supplement you should locate to a new property… payment at your current address can only continue for a period of eight weeks while you locate to a property within the relevant limit for family size.”
Conor Burke from Waterford said he was “taken aback” by the tone of the letter he received.
“I got a letter telling me I had to get a better deal with my landlord or move out. Essentially, they are asking you to move into a dump as that is all you would get for the amount.”
Mr Burke said he had come to an arrangement with his landlord, but others were not so lucky and were being forced to leave their homes.
The Government is seeking to reduce the cost of the rent supplement scheme, which has been increasing substantially for several years.
The department currently funds approximately 40% of the private rented sector, and since 2005, rent supplement expenditure has increased from €369m to more than €500m in 2011.
The numbers claiming increased from almost 60,200 in 2005 to more than 96,800 at end of last year, a 61% increase.
Joan Burton, the social protection minister, said it is “essential” 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.
New maximum rent limits came into force on Jan 1 and are in place until Jun 2013.
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