Poverty levels jump after households receiving subsidies pay rent – SJI study
The poverty risk of households that are in receipt of housing subsidies is two and a half times greater after they have paid their rent, according to an analysis by the think tank Social Justice Ireland.
In its report ‘Housing and Poverty 2022’, the group concludes that the practice of using housing subsidies to support families in the rental market is inadequate in that greater numbers are still falling into poverty.
The report analysed the impact of housing costs – mortgage interest and rent – on the poverty rates of various household types.
The overall poverty rate increases from 13.3% before housing costs to 19% after housing costs are accounted for, the report concludes.
That is an increase of almost 300,000 people going into poverty, the report calculates.
Renters are the worst affected, with 44.7% at risk of poverty after housing payments.
For households in receipt of rent subsidies, the poverty rate increases from 22.7% pre-rent payment to almost 56% after rent.
“We have argued for years that housing subsidies, such as the Housing Assistance Payment and Rental Accommodation Scheme, did not work. This latest study provides further proof of that,” Colette Bennett, Economic and Social Analyst at Social Justice Ireland, said.
“It is essential that Government increase spending on actually building social homes instead of relying on a dysfunctional private rented sector,” she added.
The report pinpoints a decline in Local Authority construction, discretionary nature of HAP tenancies, and an increase in the cost of private rents as factors that place households in what it calls ‘precarious living situations’.
The Government’s Housing for All plan, published in recent months, contains measures to boost the supply and affordability of housing including a pledge to provide 10,000 social homes, on average, every year up to 2030.
It also proposes to continue social housing supports and capital funding for social housing schemes.
The SJI report criticises what it refers to as the ‘promotion by Government of policies which seek to rely on the private rented sector for the provision of social housing’.
“Social Justice Ireland has consistently argued for the prioritisation of social housing delivery, not social housing solutions,” Dr Sean Healy, CEO of Social Justice Ireland explained.
“This would not only provide sustainable homes to the families that need them, but would free up almost 60,000 private rented homes to the market, a measure that would undoubtedly have a positive impact on market rents,” he concluded.