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How thousands are keeping rental support – even when their incomes rise

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Huge discrepancies in rent supports nationwide are leaving some low-paid tenants without any help while tens of thousands of higher-paid workers get financial assistance.

Major inconsistencies are laid bare by the ESRI today showing the ‘haves’ and ‘have-nots’ of the country’s rent support schemes.

The stark report shows that more than half of households that rent their home get State support to cover the cost, indicating how severe the rental crisis has become.

The think-thank study found that around 20pc of those who get funding to cover the cost of renting are among the top half of income earners.

This implies around 60,000 households get rent assistance despite higher earnings and raises questions about how well targeted these supports are for renters.

A couple with two children under the age of 14 would need after-tax and benefit income of more than €53,000 a year to be in the top half of the income distribution, according to the ESRI.

The overall number of households that received financial support was around 300,000 in 2020. This compares to 134,973 in 1994.

Economists who produced the ESRI report calculate that 54pc of those who rent accommodation get State aid to help them meet the cost.

This works out at around one in six of all households in the State.

However, the ESRI found that one in five renters who get support are in the top half of the income distribution, while some low-income earners are missing out.

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It said this was because some of those earning high incomes initially received financial support to rent when their incomes were low. They have since retained the rental support even though their incomes are now considered high.

At the other end of the scale, around a third of lower earners miss out on rental help.

The fact that higher earners can access rent support is mainly due to inconsistencies in the way local authorities assess applicants, according to one of the authors of the report, ESRI economist Dr Barra Roantree.

Most supported renters have their rent contributions determined by their local authority’s differential rent scheme.

Differential rent is also used to assess people for the Housing Assistance Payment (HAP), Rental Accommodation Scheme and Rent Supplement. The rent paid is calculated based on assessable income.

But differential rent assessments take little account of second and other incomes in households, and only partially allow for charging higher rents when household incomes rise.

Each local authority and town council has its own individual differential rent scheme, experts said.

Councillors tend to be reluctant to vote for changes to the schemes to increase rents for higher earners.

The ESRI found there is a large variation across local authorities in the level of support provided to households, even when their circumstances are identical.

Dr Roantree said a lone parent with two children earning €25,000 a year would pay a contribution of just €226 a month in South Dublin County Council’s area. But the same person would pay €450 a month in Meath.

“The size of the supported rental sector has grown significantly in recent decades, with more of this support now provided indirectly through schemes like HAP,” Dr Roantree said.

He said both direct and indirect supports greatly improved affordability for households.

But he said the study’s finding that almost one in five supported renters were in the top half of the income distribution raised questions about how well targeted these supports were for renters.

“About a third of renters in the bottom half of the income distribution do not receive any support for housing costs,” he said.

The HAP is the State’s main support to households in need of long-term housing support, paying for rental properties in the private market.

In 2020 there were almost 60,000 HAP recipients at a cost of €465m.


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