A major Government review of welfare benefits has recommended sweeping changes to the rent supplement scheme which has increased in cost from €80 million to almost €400 million over the past decade.
Rent supplement was originally designed to provide temporary assistance to those in short-term need of help with housing costs. However, more than half of the 60,000 recipients have been receiving rent supplement for more than 18 months, new figures show. The increase appears to be driven by single adults, who are either unemployed or lone parents.
The majority of those in receipt are Irish (67 per cent), followed by Nigerians (9 per cent), British (6 per cent), and Romanians (2 per cent), and other nationalities.
The report of a Government working group on the scheme says the supplement needs to be returned to its original purpose of providing short-term assistance by taking a number of steps.
The key recommendation is to provide more support for a scheme established two years ago, known as the rental accommodation scheme, which transfers recipients with long-term housing needs onto local authorities' housing waiting lists.
Just 1,000 people out of an estimated 33,000 with long-term housing needs had been moved into the new scheme by March last year.
The report says with appropriate support and by referring clients on to the scheme as early as possible, the backlog could be cleared by September 2008.
It also recommends time-limiting the period for payment of rent supplement, surveying recipients of rent supplement to determine accurately the extent of long-term housing need and addressing issues such as disincentives to re-entering the workforce due to the loss of rent supplement.
A spokesman for Minister for Social Affairs Séamus Brennan said he had studied the report's findings and had taken a number of measures to address the issue in last month's Budget.
These steps, which are due to come into force by April of this year, include:
Allowing those in receipt of rent supplement who move to the local authority waiting list scheme to continue to receive the supplement even if they take up full-time employment;
Increasing income disregards those in receipt of the supplement who enter part-time employment or receive maintenance payments;
Increasing a capital disregard for the rent supplement from €520 to €5,000.
Mr Brennan's spokesman said the reforms would help increase the flow of people onto the local authority scheme where their long-term housing needs could be addressed. The changes to income disregards were also part of a process of modernising the welfare system and dismantling poverty traps and disincentives to work.
The working group's report says that similar problems are affecting the mortgage interest supplement, aimed at people who are unable to meet their mortgage interest repayments in the short term.
