THE NUMBER of people in receipt of social assistance because they cannot afford to pay their rent has increased by 20,000, or 33 per cent, in a year, new figures show.
A total of 80,000 people were receiving the rent supplement at the end of February 2009, up from just over 60,000 a year earlier, the Department of Social and Family Affairs said.
The sharp rise in unemployment, as well as increases in the number of people on reduced hours or on smaller salaries, are among the main factors behind the sudden increase.
The numbers are set to continue to climb, with the rate of unemployed expected to continue rising this year.
This will put further pressure on public finances. The projected cost of the rent supplement to the exchequer in 2009 will rise by almost €30 million more than anticipated earlier this year to almost €530 million. At present the maximum rate of rent supplement payment for a single person ranges from up to €130 per week in Dublin and Wicklow to €90 a week in Donegal and Leitrim.
The overall costs to the Exchequer would be significantly higher were it not for welfare cuts announced in last Tuesday’s Budget.
Under the changes announced in the Budget, the minimum contribution recipients make towards their rent or mortgage is being increased from €18 to €24 per week, while the maximum contribution made by the State will fall by up to 10 per cent.
The biggest proportional increase in numbers receiving the rent supplement when broken down by region was in the northeast (up 54 per cent), while the smallest was in the east (up 25 per cent). However, the east, including Dublin, had by far the greatest number of people in receipt of the rent supplement overall.
Tenants’ rights group Threshold says these measures will hit vulnerable tenants’ rents in the lower end of the market because rents in this sector are falling at a far slower rate.
Bob Jordan, director of Threshold, said it did not make sense to reduce rent caps and rent supplement levels across the board when rent levels have not fallen evenly across Ireland.
“Rent levels in high-demand areas – such as Dublin city centre – have not experienced any notable decrease. In fact, a survey we conducted in February showed the vast majority of rents in such areas were above the rent supplement cap of €130 per week, with some bedsits being as high as €169,” he said.
As a result, he said many tenants on rent supplement end up paying “top-ups” to their landlords.
However, Minister for Social and Family Affairs Mary Hanafin said the welfare changes were in light of falling private sector rents, with surveys indicating rents have fallen considerably over the past 12 months.
“It is vital that taxpayers’ money is not paying landlords’ inflated rental prices,” she said.
Focus Ireland called for a reversal of the Budget cuts, saying they put more people at risk of homelessness.