With people on housing assistance payments being priced out of the rental market in areas such as Cork City’s suburbs, some are being forced to relocate up to 100km away in west Cork and other rural areas.

According to county councillors in Cork, the problems are tearing families away from their roots, uprooting schoolchildren, and leaving many single people allegedly “sleeping in cars”.

Councillors decided to write to the Government demanding an increase in the allowance, which provides a maximum of €750 per month.

It was claimed families on council waiting lists “living on the periphery of the city can’t afford the extra demands from landlords” who have recently increased rents.

Sinn Féin councillor Des O’Grady said average rent prices on the website daft.ie for three bedroom homes in Cork City suburbs showed the allowance was totally inadequate.

With the Government passing administration of HAP grants to the council since June last, the councillor said people were “digging very deep” to make up the difference especially as many rental properties exceed €1,000.

Mr O’Grady said there were “no houses within miles of the city” affordable to those on HAP grants. He said it was a catastrophe as the council was aiming to put 110 families a month into the scheme.

“The local authority must return to building social housing again,” he said.

Fine Gael councillor Gerard Murphy agreed that there was a problem with the system, as Sinn Féin councillor Donnchadh O Laoghaire said homeless shelters in Cork were also turning people away in their hundreds.

“People are being forced to move from Carrigaline to Kealkil [near Bantry] to afford decent rental accommodation,” he said.

Fine Gael councillor Kevin Murphy said it was never planned that the HAP supplement would cover the whole cost of rental but admitted a review was needed to compensate for the rent rises.

“A three-bed house in Carrigaline is costing €950 – €1,000 per month. The system needs to be urgently changed,” said Fianna Fáil councillor Seamus McGrath.

The council’s deputy chief executive, Declan Daly, said he had taken a note of all issues raised by councillors and had previously sent a submission to the Government outlining similar concerns.