Rent scheme may have lost €300m, TD claims

Up to €300 million may have been lost in the State system for paying rent supplement as a result of fraud, overpayments and mistakes in administration between 2000 and 2005, Fine Gael TD John Deasy has told a meeting of the Dáil Public Accounts Committee.

A report drawn up by the Comptroller and Auditor General, which was considered by the committee yesterday, found the State had paid out €1.6 billion in rent supplement payments between 2000 and 2005.

Under the supplementary welfare allowance scheme, rent supplements may be paid to persons living in private rented accommodation who have difficulty in meeting their rent payments.

The committee heard that the number of persons in receipt of rent supplement had increased from 42,700 in 2000 to nearly 60,000 in 2005.

Over the same period the average rent supplement payment increased by 68 per cent from €73.70 per week to €124.40 per week.

Mr Deasy said that a sample review carried out in a number of centres in 2004 had resulted in rent supplement payments being either reduced or stopped in 20 per cent of cases.

He maintained that an extrapolation of this figure would suggest that up to €300 million could have been lost over five years as a result of fraud, overpayments or mistakes.

The secretary general of the Department of Social and Family Affairs, John Hynes, said he could not put a figure on the extent of fraud in the scheme.

However he said the recent comptroller's report did not indicate huge problems in relation to expenditure control. He said that while the report raised questions about the effectiveness of existing control measures, it acknowledged the high level of claim reviews being carried out.

"The priority for the future is to ensure that control activity generally is targeted at the areas of greatest risk. The comptroller found considerable variation in the extent and recording of control activity in the offices which were examined as part of the review, and the issues raised in this regard will be addressed," Mr Hynes stated.

He said it was clear the role of rent supplement had, over the years, evolved beyond its original objective of providing short-term assistance with accommodation costs and that, particularly in relation to long-term claimants, it had to be viewed in the context of housing policy generally.

Mr Deasy said the comptroller had found there had been few prosecutions for fraud and that there was unlikely to be any significant recovery of debts identified.

Fianna Fáil TD Seán Ardagh said there was a "huge" problem in parts of Dublin where persons who had been evicted by local authorities were being housed in private rented accommodation, funded in part through rent supplement payments.

He said anti-social behaviour by a number of these persons was causing great distress to other residents.

Kathryn Ward, of the Private Residential Tenancies Board, said that in serious cases of anti-social behaviour it could set up a tribunal which could determine that the tenancy must end.