Rent Allowance changes will help landlords and tenants

Rent Allowance changes will help landlords and tenants

Proposed new rent allowance changes will help landlords and tenants.  A new “housing assistance payment” will replace the current rent supplement payment, or rent allowance payment as it is know, which will allow people to work and continue to receive rent allowance.  It is proposed that payments will be made directly to the landlords instead of to the tenants.

The new payment will be reduced where a person is working as apposed to the payment being completely stopped as is currently the case. At present where a tenant is in receipt of rent allowance and they find full time employment, the rent allowance payment is stopped.

The new housing assistance payment will allow people to take up work without losing all rent allowance benefits and will reduce the cost of these payments to the Government.  It is aimed at tacking poverty traps and to allow and encourage people to take up work. Currently tenants have no incentive or cannot afford to take up work as they lose too much money by actually working.

There are over 90,000 people in receipt of rent allowance at the moment. The new payments will depend on the persons’ ability to pay.  The payment will be transferred from the department of social protection to the local authorities. This should make sense as it is the local authorities that are responsible for housing needs in each area.

Within the proposal the new payments would be made directly to the landlord instead of to the tenant. This would help the landlord as some tenants do not pass on the payment each time to the landlord.  The system will probably be in line with how payments are made in the Rent Accommodation Scheme.  In this scheme the local authority pay the rent directly to the landlord, although this scheme is different as the local authority provides tenants for the property.

This will not be the case with the housing assistance payment.  Tenants and landlords will continue as they currently do except that the rental payment for the rent allowance amount will be paid from the local authority to the landlord’s bank account.  A pilot will be rolled out later this year.