1. Rent Supplement – The Basics Understood
Rent supplement is paid to tenants who are unable to fund their accommodation costs from their own resources. Managed correctly, a rent supplement tenancy can be a rewarding experience for both landlord and tenant.
Depending on a property’s location, an application for rent supplement is made by the tenant either directly to the local Community Welfare Officer (CWO) or to a centralised Rent Unit. In contrast to the Rental Accommodation Scheme, the agreement is between the tenant and the Department of Social Protection and so all rent supplement payments are made to tenants directly, usually monthly in arrears, and the tenant then passes the funds on to the landlord.
The amount of rent supplement a tenant qualifies for is calculated by the CWO with a view to ensuring that, after the payment of rent, the tenant will have an income equivalent to the basic supplementary welfare allowance rate suitable to their circumstances. All that the tenant is generally required to personally contribute to the rent is a minimum payment which at the time of writing is €30.00c.
Although eligibility is based on a tenant’s financial means, rent supplement is not available for all private rented accommodation and the amount of rent payable under the tenancy cannot exceed the rent limits which are set by the Government department and can change from time to time. Therefore, the amount of rent supplement along with the tenant’s minimum contribution must be equal to or lower than the current maximum rent levels applicable to the area in which the property is located. These limits have been reduced recently causing some within the landlord community to accuse the government of rent control.
2. Screening a Rent Supplement Tenant
Although a tenant is receiving rent supplement, the Department of Social Protection has no involvement in the landlord tenant relationship. Any breach by the tenant of his obligations remains the landlord’s responsibility and so it is crucial that landlords thoroughly screen any potential tenant before they move in.
When considering taking on a rent supplement tenant, a Landlord should request the following items:-
• evidence of the tenant’s entitlement to rent supplement, for example, by way of a letter from the tenant’s Community Welfare Officer.
• proof of identity such as a copy Passport or Driver’s Licence,
• an official document confirming the tenants PPSN,
• a previous landlord’s reference and, if available, a previous employer’s reference, bank reference and copy bank statements.
The authenticity of all references should be checked.
Landlords should never release keys before carefully screening the tenant. Remember, it’s better to have an empty property than a tenant who can’t pay.
3. Payments Directly to the Landlord
It is recommended that landlords make the tenancy conditional upon all rent supplement payments being made directly to the landlord by the Community Welfare Officer (CWO). This can be arranged with the CWO and landlords and their agents should attend to this before releasing keys. Ideally, landlords should also get the tenant’s irrevocable written consent directing the payment of all payments to the landlord directly and confirmation that the landlord may liaise directly with the CWO. This is because it is the CWO who has the ultimate discretion to authorise payments. The PropertyRock Lease Agreement (which is available to download here) contains this irrevocable authority. This will result in the landlord being reliant on the tenant to pay only his personal contribution, thereby reducing the risk of arrears.
4. Misappropriation of Rent Supplement Payments by a Tenant
The application for rent supplement is made by the tenant directly and the landlord’s only involvement is the completion of Section 2 of the Rent Supplement S.W.A. 3 Application Form. Once accepted, all rent supplement payments are then paid directly to the tenant unless the landlord and the tenant have agreed otherwise and as mentioned above, it is best to get the rents paid directly to the landlord at the outset. If this hasnt been done and if a tenant refuses to pass on the payments to the landlord, then the landlord should immediately contact the Community Welfare Officer (CWO) and advise him or her of the non-payment.
If significant rent arrears accrue on foot of the tenant’s misappropriation of the rent supplement funds, landlords should pursue the tenant through the PRTB. If landlords feel that the tenant is not a good mark, once the Determination Order issues by the PRTB it may be possible in some cases to recover these arrears, or part of them, from the CWO. This, however, would be a private matter for negotiation between the landlord and the CWO and/or the Department of Social Protection and the PRTB plays no role in this aspect of a tenancy.
This default exclusion of the landlord from the rent supplement process (whereby the rent supplement payments do not automatically pass to the landlord) has not only caused difficulties for landlords but has created an avenue for social welfare fraud.
Although it is intended that landlords complete Section 2 of the application form, there have been cases where a tenant is in rent arrears whilst continuing to claim rent supplement without the landlord’s knowledge. For this to occur there has usually been a forged signature placed on the application form. Although eligibility for rent supplement is conditional on the landlord’s tax reference number being provided, in certain cases it will be granted to tenants in the absence of this information. These details are at the discretion of the CWO.
If a landlord suspects their tenant is claiming rent supplement without their knowledge there is little a landlord can do, even if the tenant is in rent arrears. Notwithstanding that the landlord’s signature is required on the application form, in the absence of prior agreement, it is difficult for landlords to obtain information from the CWO, HSE or the Department of Social Protection regarding a rent supplement claim as the relationship is between the CWO and the tenant and so there are confidentiality issues in play. Advice should be sought in each case before alleging any wrongdoing least the landlord be the subject of defamation proceedings.
In the context of a dispute at PRTB level, in circumstances where the PRTB has been provided with information confirming the commission of the offence of rent supplement fraud by a tenant this disclosure has only gone to the credibility of the tenant and, although this is helpful, the PRTB have no jurisdiction to penalise a tenant for this offence. That said, while the PRTB does not currently concern itself with these issues, the PRTB will not be complicit in any perceived wrongdoing and so they may in turn pass this on to the relevant authority.
Property Rock 