Tánaiste and Labour leader Joan Burton has announced the Government will not be raising ceilings on Rent Supplement payments.
In a statement, the Department of Social Protection says the decision is on foot of the findings of an official review that any immediate increase in the level of rent to which the subsidy applies could add further to rental inflation.
The Department statement says that in "an already distressed market", such inflation would affect not alone Rent Supplement recipients, but lower-income workers and students.
The Rent Supplement scheme costs the taxpayer €298 million annually and supports over 70,000 people.
The review foresees an increase in limits for the scheme risking "several potentially negative effects".
For example, it could provide an impetus for current Rent Supplement landlords to renegotiate their lease agreements to the new higher limits, which would impact on all those supported by the scheme.
The review also says a raising of the supplement's limits could "create new rental floors for all properties in the sector, meaning rent increases for those not in receipt of the subsidy".
These would include many individuals and families who would struggle with such increases, such as low-income workers and students.
The statement adds that, in line with the review's recommendations, the Department "will instead continue to allow for flexibility in assessing customers' accommodation needs through the National Tenancy Sustainment Framework".
It explains that under this approach, each tenant's circumstances are considered on a case-by-case basis, and rents can be increased above prescribed limits if deemed appropriate.
The statement continues that Community Welfare Officers who administer the Rent Supplement scheme have a statutory discretionary power to award or increase a supplement for rental purposes, for example, when dealing with applicants who are at risk of losing their tenancy or in danger of homelessness.
It says this approach has already assisted over 1,000 people to retain their rented accommodation.
It adds that the Department, in conjunction with Threshold, operates an Interim Tenancy Sustainment Protocol in the Dublin and Cork areas where supply is most acute.
The primary objective of the Protocol is to ensure a speedy intervention to ensure that families at immediate risk of losing their tenancy get rapid assistance.
It also vows that "the Department will continue to monitor the measures in place to ensure that the appropriate supports continue to be provided for Rent Supplement recipients".
Fianna Fáil Social Protection spokesperosn Willie O'Dea has criticised the decision.
Mr O'Dea said, "this is a disgraceful decision by the Government and a complete abandonment of people in serious need. The Government is unwilling to raise maximum rent supplement payments, despite clear evidence that limits are too low for people to secure accommodation."
He added that the limits on rent supplement are exacerbating the homelessness problem, which he said "will reach crisis point again in the coming months unless rent supplement limits are raised."
People Before Profit TD Richard Boyd Barrett has also criticised the decision, saying it guarantees that the housing and homelessness crisis will get worse.
Threshold, the national housing charity, has also strongly criticised the review, which it says fails to offer any hope to tenants on Rent Supplement who are struggling to make ends meet.
In a statement the Peter McVerry Trust expressed disappointment with the decision, noting that it's among many that has repeatedly called for an increase.
The CEO of Peter McVerry Trust, Pat Doyle said it had recently welcomed announcements by two different Ministers that discrimination against Rent Supplement recipients would end and the Government would move to introduce rent certainty.
