Without knowing your financial and other circumstances it's difficult for anyone to give a definitive answer re rent supp/allow., though the few facts you've given (no job/invalidty pension/ child/ren) would suggest that you would receive rent help.
On that subject you needs a proper talk with SW with full facts.
Regarding selling your house....
Absolutely you should sell it. You don't want to be there -you're unhappy. Paying another 35 years till you're old or dead is crazy. Life is short. Move back to your area and rent a place.
Your main problem is the bank. Will they let you sell it if it is still in N.E. ? Of course, logic dictates the bank should let you sell it ,recover the money and forgo the small NE. But banks are not logical.
Just as you should start planning with SW about rent allowance , you should also now start talking to the bank and telling them you must sell.
Have you seen the prices of similar houses in your area? There has been some movement in and around Dublin and maybe your NE is smaller than you think.
As much as I'm a property freak I cannot understand why your friends tell you that "you'd be mad to sell".
Sometimes it makes much more sense to rent - in your case, eminently so.