Refusing to accept rent supplement transfer

Could anyone shed some light on the following scenario. A foreign married couple with two kids. Man has been working in Ireland for best part of a decade during which time they have been living in rented accommodation. He was recently made redundant. They now receive rent supplement. They were recently given notice by their landlord. They found another house in a different area at lower rent and below the threshold for their area and family size. They met with the community welfare officer in the new area to organise transfer of their rental supplement. All went well until yesterday when they got a telephone call from the officer saying that she wouldn't accept any more people in her area. Does this happen? Can this happen? How should they proceed?