Local authorities to take over rent payments from January

The responsibility for the payment of rent allowance is to be handed over to local authorities in seven areas from next January, the Minister of State for Housing has confirmed.

In an interview with The Irish Times, Jan O'Sullivan said the Limerick joint authority (formerly Limerick city and county councils) would be the "lead local authority" in a pilot project involving six other areas. This will be the start of the process of transferring rent supplement, or "housing assistance payments", from the Department of Social Protection to local authorities. A Dublin local authority would also be involved in the pilot.

90,000 households
Rent supplement is paid by the Department of Social Protection to about 90,000 households headed by people on social welfare who would not otherwise be able to pay rent. It is paid directly to the social welfare recipient tenant who then pays it to the landlord as the main part of their rent.

The Housing Assistance Payment (HAP) allowance will be paid directly to landlords.

Unlike with rent supplement, if the recipient takes up employment they will lose only part of their housing payment. Under the current scheme, tenants typically lose most or all of their payment, up to €1,500 a month, if they take up work. Rent supplement is seen as a disincentive to taking up work and an effective poverty trap.

Under the new scheme, the amount a tenant pays towards their rent will be based on a graduated ability to pay.

“In that sense, the HAP is being seen as a labour activation measure as the current arrangement acts as a disincentive to take on work,” said Ms O’Sullivan. “It is a big undertaking so we [she and Ms Burton] had a joint-memo at the Cabinet meeting on jobs to move this on to the next step.

“We are going to do a pilot. Joan Burton’s department are working out an IT system for relating to the local authorities and for a deduction at source of the social welfare payment. We will pilot in seven local authorities from the beginning of next year. There’s a Dublin one and a mix of other ones from around the country. Limerick will be the lead authority.”

No penal effect
It would not make a difference to the pockets of people already in the rent supplement system, she stressed, but would make people feel more secure about offers of work.

“We are going to have a model that will equate to what they are paying anyway. In the longer term, it will make it much more secure in that if they get work it won’t hit them. The landlord will get their share through the local authority.”

A spokesman for the Minister said the funds for the scheme would come from the rent supplement budget. The pilot would identify other cost issues as they arose, he added.