Slum landlords among those ‘fleecing rent allowance system’

SLUM landlords are among those being allowed to evade tax on €140 million a year given by the State in rent subsidies, it emerged last night.

Chairman of the Dáil’s influential public accounts committee Bernard Allen warned that government “buck passing” had left the housing benefits system wide open to abuse.

With more than 60,000 people receiving the subsidy last year, at a cost to the taxpayer of €419m, Mr Allen estimated a third of landlords were failing to supply PPS information and the social and family affairs department was ignoring the problem.

“The situation is very alarming. Vulnerable people are being put into hovels and rent is being paid by the State despite the fact, maybe, a third of landlords are not providing PPS information for their tax liabilities and not being pursued over it.

“No one is taking responsibility for this, the buck is being passed all over the place. The department say their priority is finding people accommodation, not enforcing tax compliance, the Revenue are worried about the amounts involved and there seems to be no quality control over the type of accommodation people are expected to live in.

“This situation cannot be allowed to continue. All the players involved, the department, Revenue, local councils and the Private Rented Tenancies Bureau need to get together urgently and sort this mess out,” he said.

The amount being poured into rent subsidies by taxpayers has risen dramatically this decade, up from €151m in 2000, to €369m in 2005, to €419m last year.

About half of those claiming the benefit in 2007 had been depending on the allowance for more than 18 months.

The amount of money slipping through the tax net in the rent subsidy sector could be even higher than €140m a year.

Comptroller & Auditor General John Purcell expressed concern last month that Revenue officials were only able to match 42% of rent supplement payments to the tax records of actual landlords.

He warned the committee that detailed figures for 2005 revealed an audit of rent supplements paid out by the Government was unable to match almost 53,000 records, worth more than €197.4m.

Mr Allen blamed lack of affordable social housing for the surge in housing subsidies as he pointed to the fact that the waiting list for Cork City Council accommodation had doubled in 10 years from 3,000 to 6,000.