Wednesday 13 December 2017

Penny finally drops for Fine Gael as rent supplement limits rise

Social Protection Minister Leo Varadkar Picture: Tony Gavin
Social Protection Minister Leo Varadkar Picture: Tony Gavin
Niall O'Connor

Niall O'Connor

Let's be clear on one thing: any suggestion that the Government has all of a sudden woken up to the discrepancies between rent supplement limits and the market rate is complete fantasy.

The gap has been widening significantly over the past two years with little action taking place.

That finally changed yesterday when the Cabinet agreed to increase the limits for rent supplement and the Housing Assistance Payment (HAP) across the board, in a move that will cost the taxpayer an extra €55m per year.

In Dublin, where the rental crisis is at its most serious, these limits will be increased by up to 29pc.

And in more rural parts of the country, such as Cavan and Donegal, the increase will be in the region of 15pc.

While the move will come as a relief to many families on low incomes, the length of time it has taken for the introduction of such measures is inexcusable.

Charities, housing organisations and TDs have provided thousands of examples whereby households reliant on these State supports have been priced out of the market.

The impact of this has placed a major strain on the finances, and indeed the physical and mental health of many families.

Charities have been contacted by families who have fallen into debt or homelessness because their rent has steadily increased beyond the level of financial support they receive from the State.

Many other households in receipt of rent supplement have been forced to engage in the "illegal" practice of top-ups, whereby they use their own savings or borrowed money to make up the difference.

The likes of Threshold have warned that in some cases, families engaging in this practice have forfeited meals in order to satisfy their landlord's demands.

With all the talk of Ireland now having the fastest growing economy in Europe, Fine Gael faces legitimate questions as to why it did not act sooner.

Following yesterday's announcement, it is now crucial that the limits are kept under regular review, particularly if rent prices continue to spiral upwards.

If this happens, then the limits should be increased further.

Landlords will also have to be carefully watched.

If the Government is serious about these measures working, it should ask the Residential Tenancies Board to keep an eye on the market to ensure that new tenants aren't paying the price for the Government's gesture.

It should be pointed out that the measure was initially met with resistance from the Fine Gael negotiating team in the recent Government formation talks.

According to Fianna Fáil TD Barry Cowen, the party was initially told such a measure would only lead to landlords increasing rent prices further.

At yesterday's announcement, Housing Minister Simon Coveney denied that Fine Gael had sought to block the measures, but said Fianna Fáil could take "some credit" for their introduction.

"That is politics. Fianna Fáil can take credit, they did input into this decision but I think both parties agreed this was the right decision," he said.

Going forward, increasing rent supplement will do nothing to address the housing supply crisis, as acknowledged by Social Protection Minister Leo Varadkar.

"It won't in itself create additional houses; it is not a silver bullet. It's just part of the Government's response to the housing crisis and to homelessness," Mr Varadkar told reporters.

Irish Independent

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business