An extra 15 million euro is to be spent on the state’s rent supplement this year to prevent more people being made homeless.
The new money will be paid from July 1 with average increases in welfare payments of 29% for at-risk households in Dublin and 25% in counties Laois and Roscommon.
Leo Varadkar, Minister for Social Protection, said the cash will give tenants more certainty and limit the threat of eviction for families.
“These new rent limits reflect the fact that rents are rising right across Ireland and are back to their peak levels in some places,” he said.
The rent supplement money will also be provided through average increases in payments of 21% in Cork city, Galway city, Leitrim and Longford and 15% in Cavan and Donegal.
Mr Varadkar said the welfare would help to strengthen the safety net for at-risk households.
“This Government wants to ensure that our recovering economy works for everyone. We aim to achieve that by promoting an enterprise economy, making work pay, investing in public services, ensuring opportunity and a fair go for everyone,” he said.
“We must ensure that we have a strong safety net so that everyone has a roof over their head.”
Homeless and housing charity the Peter McVerry Trust welcomed the Government’s move.
Chief executive Pat Doyle said: “Prevention, which in this case means keeping people in their existing rental accommodation, is a critical measure in combating homelessness.
“Today’s announcement will help reduce the number of people who would have otherwise ended up in homeless services, right across the country. It will hopefully lessen the acute pressures faced by agencies trying to tackle the problem and will create a breathing space to allow them to respond in other ways.”
Sinn Fein’s housing spokesman Eoin O Broin backed calls from the trust for rents to be linked to inflation.
“Unless it is done in parallel with rent certainty there is a risk that landlords will absorb this increase by simply increasing rents further,” he said.
Housing Minister Simon Coveney said: “I’m confident that the new limits being announced today will help alleviate the pressure experienced by families in the private rented sector, while other longer term housing measures are put in place.
“They will help households to remain in their existing homes while also providing sufficient flexibility to enable people to source accommodation in a constrained rental market.”
Some 12m euro of the money will go to the rent supplement scheme and 3m euro on the Housing Assistance Programme.
The Government said councils will still retain discretion to make additional rent payments to keep people in their homes.
About 55,000 households are being paid rent supplement this year, costing the state more than 267m euro, and the Government said about 120 households come forward every week facing the risk of homelessness due to rising rents.
The housing assistance scheme has more than 10,000 households on its books at a cost of 48m euro this year.
Stephen Large, of housing charity Threshold, said the extra money was a step in the right direction.
“These measures reflect the fact that rents are rising exponentially and with increased limits, comes increased stability and a lower risk of homelessness,” he said.
“One-fifth of families in Ireland now rent their homes, and Threshold has been calling for some time for reform of the rent supplement scheme, including an increase in rent supplement limits to bring them in line with market rents.”
Focus Ireland’s Mike Allen said the money was an essential emergency response but that it may not match market rents in parts of Dublin.
