Fingal County Council’s strategy on housing is delivering
19th July 2017
Progress towards Rebuilding Ireland
19th July 2017

HAP: a growing success story within the private rental sector

March 2017 saw the national roll-out of the Housing Assistance Payment (HAP) Scheme and, according to the Department of Housing’s Tom Gallagher, the new measure is having the desired effect on the ground.

“HAP represents a genuine step change in the way housing benefit is made available. In essence, it constitutes a demand-based, as opposed to a list-based, system that would have been the norm up to this point.

“Above all else, HAP is totally flexible in the way it operates. The scheme makes available support to recipients immediately. In addition, it is not dependent on the number of hours that claimants work. As a result, those deemed eligible can live in areas that are more work and family-friendly.

“HAP has nothing, at all, to do with a recipient’s employment status. This factor alone is delivering very tangible benefits for those receiving the benefit and for society as a whole.”

Gallagher says that HAP is working to help reduce the number of homeless families throughout Ireland in a meaningful way, adding: “The new scheme is working to get families out of hotels and into accommodation that is more suited to their needs. The private rental sector will play a key role in meeting the targets set down within the Rebuilding Ireland strategy.

“HAP particularly suits landlords, as they are guaranteed their money. The one possible downside is the fact that they are receiving their money one month in arrears and not one month ahead, as would be the arrangement within a private rental contract.

“There are currently 23,000 HAP clients and this figure is increasing by about 400 per week. It was significant that Ministers Kelly and Coveney re-committed to the system earlier this year. This is further evidence of the political support for HAP.

“All HAP claimants are then put on a Transfer Housing list. Again there is flexibility in this approach. Some people may wish to remain within the private rental sector on an ongoing basis while other will want to secure a standard, domestic dwelling that is supplied by a housing authority.”

“HAP has nothing, at all, to do with a recipient’s employment status. This factor alone is delivering very tangible benefits for those receiving the benefit and for society as a whole.”

All local authorities use the HAP Shared Services Centre, which is based in Limerick, to collect rents from HAP tenants and make HAP rental payments to landlords. According to Eoghan Prendergast, Director of Services at Limerick City and County Council, the initiative is working well.

“All the housing organisations are committed to confirming claimants’ eligibility for HAP as quickly as possible. In turn, this means that claimants can physically access the benefit almost immediately thereafter,” he says.

“We pay the landlords their rent while, at the same time, collecting the payment contribution agreed for individual HAP claimants. They can pay in a number of ways, including a Bill Pay Card or through a direct debit mechanism.

“We have had very few people defaulting on their payments and, even when this has become an issue, matters have been quickly resolved in almost all cases.”

Prendergast confirmed that the Shared Services Centre has a transaction budget for 2017 of €230 million.

“This will increase to some €600 million by 2021.”

January to May 2017 saw staff at the Shared Services Centre paying out a total of €13.8 million in payments to landlords and collecting €3.5 million from tenants.

“The total will rise to some €15 million for the first six months of the year,” says Prendergast.

“The Shared Services Centre is well on course to meet the 2017 national target of 15,000 new tenancies.

“Landlord payments are growing at over €1 million per month while the rent run is increasing by €150,000 per month.”

Prendergast adds that HAP is relatively easy to operate: “We are taking on a lot of the heavy lifting, for all those involved. For example, the securing of tax clearance can be an issue for landlords. However, we are happy to interface with the Revenue on matters of this nature, if required.”

There are currently 41 people working within Prendergast’s HAP team in Limerick.

“We have employed a bespoke grouping of people, many of whom have a track record in working within the private sector,” confirms Prendergast.

“All are highly experienced with the right mix of skills to deal with both landlords and those actually claiming HAP.

“We are currently paying between 18,000 and 19,000 landlords. Of those currently claiming HAP, two thirds are family groups with the remainder made up of individuals.

“Our employment levels are due to rise to 111 over the coming years. This is the number that falls out from the running of the business plan that was developed around an envisaged 70,000 HAP tenants being on the ground by 2021.

“All my staff are working out of the Granary in Limerick. The building has been specifically refurbished for the HAP project. This extra employment is good news for the economy of the Limerick area.”

In order to qualify for HAP, a household must be qualified for social housing support by their local authority, which means the household must qualify to go on the local authority housing waiting list.

However, HAP claimants, like Rent Supplement recipients, are responsible for finding their own accommodation in the private rented market.

“HAP represents a two-party agreement, arrived at between the claimant and the landlord,” says Prendergast.

“In cases of persistent non-payment of rent, my staff will initially notify the landlord. If this matter of affairs persists, we will cease to pay the landlord, but we have had a 99 per cent rent collection rate so far. HAP is destined to become the biggest non-capital support scheme for people in private rental accommodation.”

The Housing Agency’s Jim Baneham believes that HAP is making a real and positive difference in helping to address Ireland’s social housing challenge.

“The Agency was one of the prime movers in having the scheme introduced in the first place,” he says.

“The underlying principle of HAP providing gap funding for claimants is inherently fair. The scheme also acts to ensure that recipients are guaranteed accommodation that meets specific standards.

“Properties are inspected by the various housing authorities as part of the registration process. What’s more, landlords entering the scheme cannot discriminate against tenants that are claiming HAP.

“Claimants will be expected to pay more rent as their financial circumstances improve. It is in claimants’ interests to notify authorities of these changes as soon as they happen.”

Baneham pointed out that HAP can be improved: “Yes there are challenges. The current rental market is under stress and, of course, the same can be said for the housing sector as a whole.

“The Agency has welcomed the Government’s rental strategy and the package of actions designed to deliver a strong, viable and attractive rental sector that delivers affordable and high quality accommodation for tenants.

“This will also help secure a predictable investment environment for landlords and accommodation providers.”