Top 20 earning landlords get €5m in State rent subsidy

One landlord received €578,000 from the State in the form of rent supplement payments last year. Figures released to The Irish Times show the top 20 earning landlords received almost €5 million. Individual payments for these property owners ranged between €180,000 and €578,000 during 2012.

Separately, the department is also pursuing more than 700 landlords who have failed to declare their rent supplement earnings to the Revenue Commissioners.

Officials are pursuing these individuals who have not registered with the Private Residential Tenancies Board.

Overall, tax compliance among landlords has been very high, with as many as 99 per cent declaring earnings.

Low incomes
Rent supplement – which costs the State €400 million annually – is typically paid to people on low incomes or on social welfare who cannot afford to pay the full cost of their rent, and is passed on to the property owner.

The income levels suggest some of the top 20 earning landlords received rent supplement in respect of up to 100 or more flats or houses.

The scale of payments has prompted calls for the Department of Social Protection to arrange deals with individual landlords, given that the State is providing them with significant sums of guaranteed rental income.

In a statement, a spokeswoman for Minister for Social Protection Joan Burton said there was no contractual relationship between the department and landlords, as tenants sourced their own accommodation.

To ensure value for money for the taxpayer, she added, the department had set maximum rent limits.

Despite these limits, housing groups report that many tenants are being asked to pay “top-up” payments to landlords for rent that is above the maximum allowance limit.

The housing charity Threshold says it has first-hand evidence that rent supplement reductions are causing homelessness.

Overall, latest figures show payments under the rent supplement scheme were made in respect of 138,700 tenancies to approximately 78,000 landlords during 2012.

The average payment to landlords was €5,400.

The economic downturn and a shortage in local authority accommodation has resulted in a surge in the number of people seeking rent supplement, although numbers have been falling.

The number of people in receipt of the payment peaked at almost 100,000 between 2010 and 2011. At that point expenditure on the scheme reached more than half a billion euro.

More recently, numbers have been falling due to a new, longer-term form of housing support – the housing assistance payment – and tougher eligibility conditions for rent supplement. Latest figures indicate about 84,000 are in receipt of rental assistance.

'Poverty trap'
The rent supplement has often been criticised as a "poverty trap", given that many recipients who take up full-time employment lose the entire payment, worth up to €475 per month.

Under the new housing assistance payment, recipients who take up full-time employment are able to retain the payment under reforms being planned by the Government.

Officials hope the move will prevent welfare dependency.

Under the changes, after a certain period a responsibility for the rental subsidy payment transfers from the Department of Social Protection to local authorities, which are then responsible for meeting housing needs through social housing or other means.