Joint Committee on Social Protection, Community and Rural Development and the Islands díospóireacht -
Wednesday, 20 Mar 2024

Social Welfare Statutory Instruments: Department of Social Protection

An Leas-Chathaoirleach

Apologies have been received from Senator Gavan and An Cathaoirleach, Deputy Denis Naughten. Members are required to participate in the meeting remotely from within the Leinster House precincts only.

I welcome the witnesses. They are protected by absolute privilege in respect of the presentation they make to the committee. This means that they have an absolute defence against any defamation action for anything they say at this meeting. However, they are expected not to abuse this privilege and it is my duty as Chair to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction. Witnesses are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity.

Members are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against any person or entity outside the Houses or an official either by name or in such a way as to make him or her identifiable.

The committee will now consider SI 37/2024, Social Welfare (Consolidated Claims, Payments and Control) (Amendment) (No.1) (Income Disregard) Regulations of 2024, and SI 38/2024, Social Welfare (Consolidated Supplementary Welfare Allowance) (Amendment) (No. 1) (Calculation of Means) Regulations of 2024. The effect of these amendments is to extend the circumstances whereby people can rent out a room in their homes while still availing of the income disregard in respect of the rental income from the room.

I welcome to the meeting Mr. Niall Egan, assistant secretary general, Mr. Alan Flynn, principal officer and Ms Saidhbhin Hardiman, principal officer. I invite Mr. Egan to make his opening statement.

Mr. Niall Egan

I am the assistant secretary general with responsibility for corporate affairs including the finance function in the Department of Social Protection. I am joined by Alan Flynn, principal officer with responsibility for budget and estimates, and Saidhbhin Hardiman, principal officer in the Department recently working on the Department’s means review. I thank the committee for the opportunity to attend to discuss the recent changes to means assessment in respect of rental of a room in a person’s home.

In July 2022, in order to remove barriers in the housing market, the Minister for Social Protection exercised her statutory powers under the Social Welfare Consolidation Act and, with the consent of the Minister for Public Expenditure, NDP Delivery and Reform, made two regulations namely SI 396/2022 and SI 397/2022. These provide for a disregard of up to €14,000 annually for recipients of social assistance schemes who rented out a room in their own homes. These regulations were subsequently extended until March 2025 with a sunset clause in effect at that date. The regulations specifically limited the scope of the disregard to those renting out a room in their own home.

In April of last year, the Government decided, in a response to a Housing for All strategy, to take further measures across the full breadth of policy areas to support the Irish housing, and in particular, the rental market. Two areas of policy reform, in particular, link into the recent change in social welfare regulations. In recent months, the Minister for housing has progressed mechanisms to support rental of local authority properties in certain circumstances. With effect from December last, local authority tenants can rent a room to students under the rent a room to a student scheme. This change, implemented on an administrative basis initially, will allow the Department of housing to monitor the impact and take-up of the scheme. At the same time, the Department of Health has been considering making modifications to the financial assessment process associated with the nursing home support scheme, NHSS, known as the fair deal scheme. Rental income from a person’s home has always formed part of the financial assessment process for the fair deal scheme. The percentage of rent assessable has been reduced in phases in recent years and following a review by the Minister for Health and with effect from February this year, the percentage assessable has been reduced to zero, thus removing a barrier to availing of the fair deal scheme.

The Minister wanted to ensure that social welfare regulations were in line with Government policy in this regard. Since its introduction, the Department’s rent a room disregard has provided a small but positive support to the rental market, removing barriers to facilitate a total of 650 such means assessments linked to claims since the introduction of the disregard, with 250 currently in payment. Following consideration of the policy changes across the Government, the Minister decided to implement a twofold extension of the scope of the existing disregard. First, the requirement was removed for the home to be owned in the circumstance where the Department of Social Protection customer is a local authority tenant, who is providing accommodation under the room for a student scheme. Second, the requirement was removed for the home to be personally used and enjoyed where the person has moved into nursing home accommodation provided under the fair deal scheme.

Take-up of the disregard will be monitored over the coming months as both wider Government policy and the Irish rental market evolves in the medium term. Associated guidelines for non-statutory schemes have been modified in line with these statutory changes. The Department of Social Protection disregard is still subject to a sunset clause, which will expire in March 2025, so the Department can continue to monitor uptake and assess any other effects of the change with that safety net in place.

Relevant briefings took place with officials in the Department of Public Expenditure, NDP Delivery and Reform. Members will note from the regulations, that both Ministers signed the regulations to come into effect on 30 January 2024. Members will be aware that regulations are always shared with this Oireachtas joint committee immediately after they have been signed into law.

To conclude, my colleagues and I look forward to hearing the committee’s views on the regulations and we are happy to assist with any questions members of the committee may have.

An Leas-Chathaoirleach

I thank Mr. Egan. I will now invite members to discuss and remind those who are participating online that if they wish to make a contribution, they should use the raise hand feature to indicate they wish to speak. First, I will call Deputy Paul Donnelly.

Deputy Paul Donnelly

I thank the officials for the report. It is very welcome. A lot of people had rooms in their homes that were lying empty. The provision for students in particular is a really good one. I am in Dublin 15 where we have the TU and a lot of students were unable to take up and access places within the university or are travelling extremely long distances. Some of the estates in Dublin 15 would be 30 or 40 years old so the families have all moved on. It is a very useful measure. On the sunset clause, I think it is March 2025, which will be in the middle of the student year. Someone is going to be taking up accommodation from September to about April or May. There is still a gap where a person can offer accommodation but can only guarantee it until next March. I have a question around that.

Is 250 the current number in total? It is. It seems quite low considering the need for housing, particularly when we are talking about students or people within the fair deal scheme. For me, the fair deal aspect was always a bit of a no-brainer. When I lived in town in my mother-in-law's house, the house next door to us was empty for years. I could never understand why it was continuously deteriorating. It is a really good scheme. The numbers are quite low. Are there any barriers that are preventing people from accessing this? Is it information? Are there any tax implications that mean people may be afraid of getting involved?

Mr. Niall Egan

On the original sunset clause, it is tied to the original date the two Ministers first signed the regulations, which from memory was March 2022. We extended it and added a one-year sunset clause in March 2023 and then last March the Ministers extended it by two years. I take the point that it is in the academic year. It is just the nature of the extension. I think the Deputy is right that we need to give certainty to people. We would not want to be telling people in March 2025 that it is not being extended. The Ministers would have to make a decision in a timely manner and at that time we could look at taking the academic year into account.

In terms of take-up, it is relatively low but it is a new initiative going back to March 2022. These things do take time. As well as that, we know a lot of universities have put a strong focus on promotion. We have seen that. It does come in waves as well. It is something we would expect to pick up, especially for the very reasons the Deputy has highlighted in respect of the TU. That is replicated across many universities. I am not aware of any particular barriers. As we said in the opening statement, a key thing is trying to align ourselves with a consistent approach with the Department of Health and the Revenue Commissioners. That is the purpose of the regulation. If there are barriers, they will obviously be of interest. Any information about them would be much appreciated.

Deputy Paul Donnelly

Has there been any engagement with the students' unions directly or have they made contact on any barriers?

Mr. Alan Flynn

We are engaged with colleagues in the Department of housing, so we are basically reacting to policy changes implemented on that side. I have no doubt that colleagues in the Department of housing are engaging with relevant stakeholders in the formulation of their policy. The policies that have been implemented on the housing side have been implemented on an administrative basis. They are committed to monitoring the changes and seeing the effect as time moves on. From our point of view, the concept of "rent a room to a student" on the housing side did not exist at the time the original regulations were made. We are just trying to react to what is going on in the other policy areas to make sure the implementation is harmonious with the Department of Social Protection. The Deputy mentioned tax. There is an existing arrangement for renting a room under the Department of Finance and the Revenue Commissioners. I think it is set at €14,000 as well. Our one was designed originally, when it was introduced in 2022, to mirror that.

An Leas-Chathaoirleach

If any members are looking to contribute online, they might use the "raise hand" function. I am going to put a couple of questions that the Cathaoirleach asked me to raise. He corresponded with the Minister but was not able to be here today. I will relay his note now. The extension of the rent-a-room relief to individuals receiving social welfare who wish to rent out a spare room for a two-year period is welcome. Previously a rent-a-room scheme allowed a taxpayer to earn €14,000 per year tax free if they rented out a room. However, those on means-tested social welfare payments had that rent deducted from their payment. This change will particularly benefit older people who can now receive €269.23 in weekly rent for a room without impacting their non-contributory State pension or the spouse or adult dependant of a contributory pensioner. Due to ongoing delays in applying this relief to the means test for the medical card, which is still not in place as the legislation currently goes through the Oireachtas, older people have not been able to avail of the social welfare relief to date because they would lose their medical card. Essentially, the Cathaoirleach's question is whether this relief is going to track through to means testing of medical cards. That is another barrier to people getting involved. The Cathaoirleach also draws attention to the fact that, for older people, there are a lot of benefits that go along with having a younger person in the house. He would be anxious that any barrier preventing older people from being involved in the scheme would be removed.

The Cathaoirleach also has a question on the fair deal nursing home support scheme. A case was brought to his attention of an 83-year-old pensioner in County Roscommon following her husband's admission to long-term nursing home care. The pensioner in question does not have an entitlement to a contributory pension and lived on the occupational pension of her husband until he went into long-term care. Due to income from this pension, she was ineligible under the means test for the non-contributory State pension. After the husband's admission to long-term care, she must pay the nursing home €363 a week towards the husband's care but there is no deduction made under the social welfare means test for this payment, resulting in the 83-year-old woman exhausting all of the couple's savings to meet their day-to-day needs. The letter addresses this in more detail but I think Mr. Egan gets the gist of the question. There is no income disregard for the payment made for nursing home care. Those are the two questions the Cathaoirleach was looking for me to put.

Mr. Niall Egan

On the first question, the issue is the medical card people changing their assessment and coming in line with the recognition of the exemption of €14,000. I note from the Cathaoirleach's letter that this change is not being made on the medical card assessment until the end of the academic year 2026. I think it is a valid point, in line with what Deputy Donnelly has raised in terms of us not being in kilter with the academic year. When we are looking at reviewing the existing regulation and the sunset clause, we will bear both those points in mind in terms of trying to better align with the academic year but also making sure we continue to be aligned with the new changes in the medical card assessment. We will bear that in mind as part of the review of the sunset clause, which will be in advance of this time next year.

On the second issue in respect of the fair deal nursing home support scheme, the Cathaoirleach is right that there is no provision at the moment for a disregard for the contribution made to the fair deal scheme as part of the means assessment. The Cathaoirleach wrote to the Minister earlier this week. We have shared that correspondence with the relevant operational side, who are looking at the details of the case. At the moment there is no exemption, just to be aware. I do not know the details of the particular individual circumstances but it is possible that the changes we have made to contributory State pension regarding recognition of long-term care might be an avenue. Again, I cannot be certain given I am not fully au fait with the circumstances of the individual case. We will review and examine our current legislation in relation to means and scheme guidelines to determine whether a change is required and the implications, which could be very significant, in line with the proposal of doing so. We will be looking at that.

Deputy Joan Collins

In agreement with a point that has been raised on the DSP disregard for March 2025, can Mr. Egan put an estimate on when the Department is going to start reviewing it? If people are going into this agreement with a student or whoever, it will be very important that they have a longer term understanding of it and that the student is not going to be in a situation in March where they feel that they are not going to be able to stay there for the academic year. The other point is the case that the Chair has brought up. It is important as I do not think any social welfare payments or medical cards should be affected if people take somebody in or rent a room in their home. I know of a family whose parent was in a nursing home and it was not them looking for someone to come in and rent the room, but a couple approached them as they were stuck with nowhere to live. They did not want to take it on because of the implications of the assessment process with fair deal. It was a bit more complicated. Is Mr. Egan saying that this will not affect the fair deal payments at all? Maybe as a way to assist families who may have an empty house as their parent is in a nursing home, Nursing Homes Ireland could advise people when their parents move into a nursing home, at an appropriate time such as two months after that, that there is this option that can be availed of?

Mr. Niall Egan

I thank the Deputy. On the first issue of when we will look at the sunset clause of the existing regulations, I would like to flag that originally it was for one year and we extended it for two years. We initially extended it for a year and at the last extension we extended it for two years in consultation with our colleagues from the Department of public expenditure. I would envisage that we would be looking at the sunset clause again in early 2025 to give a timely decision for people. Obviously we have extended it twice already.

In respect of the second issue raised by the Deputy, a couple of things strike me. One relates to the fair deal assessment and the responsibility for that is with the Department of Health so I cannot comment here on how they are going to assess income for participation in that scheme. We are consulting with our colleagues in the Department of Health on the medical card assessment and aligning it with the recent changes that it has made in recognition of the similar disregard for rent-a-room. The cathaoirleach has written to the Minister this week asking for us to extend our provisions of the rent-a-room regulations to align with their assessment, which is up to the end of the academic year, 2026. The regulations we have here that the two Ministers have signed, will allow someone who is availing of rent-a-room relief an exemption of up to €269 per week while maintaining their social welfare payment, whether that be a State pension, non-contributory or otherwise. That is essentially the position of the Department of Social Protection.

An Leas-Chathaoirleach

Unless the Deputy has any additional questions, I call Deputy Ó Cúiv.

Deputy Éamon Ó Cuív

Can the witnesses give us an indication of how many people have availed of this since 2022? I would imagine the figures are small as most people are on a contributory State pension. My understanding is that the second issue applies to the widow's pension. Is that correct or not? So if you are on a widow's pension and you are over 66-----

Mr. Alan Flynn

On the two regulations which the Minister signed, one of them covers supplementary welfare allowance and the other covers the consolidated claims payment and control regulations which apply to a range of schemes. This disregard which was provided initially in 2022 applies generally across all social assistance schemes, whether it is, for example, State pension non-contributory, disability allowance or jobseeker's allowance. It is not specific to any particular scheme in the social assistance framework of schemes. On the question about how many are involved, we track the means assessments that are tagged for this particular disregard and there have been approximately 650 such disregards associated with claims since the introduction of the facility in 2022. Currently there are about 250 claims in payment which have regard to this disregard.

Deputy Éamon Ó Cuív

There are 650 claims.

Mr. Alan Flynn

A total of 650 claims have availed of this disregard since 2022. As of now, there are 250 claims.

Deputy Éamon Ó Cuív

That is very small.

Mr. Alan Flynn

In the realm of what the Department deals with, yes, the numbers are currently small.

Deputy Éamon Ó Cuív

In practice it is probably not costing anything as nobody is going to take and pay the money over to social welfare anyway. Even if you take the gross cost what is it costing?

Mr. Alan Flynn

I could not answer that question off the top of my head but in terms of the social welfare budget it is very small.

Deputy Éamon Ó Cuív

It is 14,000 times €250, something like that. Which in the greater realms of the Department spending €27,000 million, it is a very small percentage.

Mr. Alan Flynn

Absolutely.

An Leas-Chathaoirleach

The witnesses are very focused on his Department's involvement in it which makes it difficult to assess the overall impact of the scheme. I will put the questions anyway. Firstly to pick up on Deputy Donnelly, it is surely not beyond the wit of man to have a 15 month extension instead of a 12 month extension. Let it get to the end of the academic year as it will need that kind of certainty for people.

Regarding the fair deal scheme, as we increase the percentage disregard, my question is whether we are pulling on the correct policy lever as we increase the amount of disregard and now it is going to zero. Have we seen more and more properties within fair deal come into circulation to be rented out? Anecdotally, and you should never base policy on anecdote, that does not seem to be the barrier. The barrier seems to be that you have to go in and empty your parents house to get it ready for rental rather than the considerations we are dealing with here. If we are pulling at the correct policy lever I would have expected to see a change in uptake as we progressively made those moves. In respect of the barriers to rent-a-room - and this is responding to a conversation that I have had with people in student unions - it is not clearly explained what the minimum expectation is in terms of the rights of the person coming into the house. It is a different situation from renting out a house where everybody should have a clear expectation of what is involved and there is the RTB etc. that is supposedly there to regulate it.

I am hearing from students who do not have locks on the doors of the rooms they are going into or the expectation is that come 12.30 p.m. on a Friday they will be out for the weekend or there are limits to their rights to use the kitchen or the bathroom, these kinds of things. While we are providing this benefit and saying this €14,000 does not affect your disregard or whatever else, are we setting the ground rules? Are we saying "you are getting this benefit and as a quid pro quo we expect people who are taking up that room to have certain minimum rights within the household". I would worry that we do not have the same protections in relation to the people coming in to rent-a-room as we would have for renters, and God knows those could be a lot better. Similarly I am not sure there is a clear expectation of what happens from the householder's side if the arrangement goes wrong and what protections are there.

Mr. Niall Egan

On the extension point, I fully accept that it is not beyond our wit to go from 12 to 15 months. As I said previously, our first extension was 12 months and the second one was 24 months. It makes sense to align with an academic year but it also makes sense that similar provisions are aligned across Government Departments. That is something that we will definitely take on board.

On the fair deal scheme, your questions are predominantly for the Department of Health. I am going to ask my colleague Mr. Flynn to come in shortly. It is obviously a significant change and you are right to highlight that people may not want to empty the family home. I would see that as a significant issue speaking personally, but I do not know the extent of that and I cannot tell you how frequent the renting of a home is that is involved with someone who is in the fair deal scheme. The Department's perspective is that we do not set out ground rules or anything such as you described in terms of how the student interacts with the landlord. Our regulations are specifically confined to the means test. I know there is advice available but I might ask Mr. Flynn to come in.

Mr. Alan Flynn

In relation to the specifics of the schemes, whether in the Department of Health for fair deal or the local authority rent a room to a student scheme, the real policy experts are the officials in those Departments. However, we have engaged with them as part of this. You mentioned that there were a number of potential barriers to undertaking the rental, say, of a fair deal property, about people emptying their parents' house or whatever it was. The Department cannot deal with all of those barriers but we can deal with one. If the person had been a social assistance scheme recipient, trying to rent the house was going to put at risk their social assistance scheme payment. By bringing in the disregard, we knocked that risk, which is the one within our ambit of control, off the list of risks.

An Leas-Chathaoirleach

I realised as I was putting the question that it was not within your sphere of influence, really. Deputy Collins wanted to come back in.

Deputy Joan Collins

Are these two rent-a-room schemes covered by the RTB? Have you discussed that in respect of landlord and tenant, which the person would be?

An Leas-Chathaoirleach

I think that is an area where you would need to talk to officials from the Department of housing.

Deputy Joan Collins

The officials have not discussed it with the Department of housing, no?

Mr. Niall Egan

These are not schemes in the sense of rental schemes. We are extending an exemption from means assessment for the rental income. It is not a stand-alone rental scheme, just to be clear.

Deputy Joan Collins

Your scheme is extending so more and more people will hopefully be enticed to bring people in through the rent-a-room scheme for students and for people who are on the fair deal scheme. Particularly if it is expanding, the RTB question is an important one.

An Leas-Chathaoirleach

It is an important question but I imagine the Department of housing really would need to answer it. We are dealing with the specific aspect of the disregard on it. Do any other members wish to contribute in this session? No. We will suspend for five minutes ahead of our next session.

Sitting suspended at 10.04 a.m. and resumed at 10.12 a.m.