The Dept of Social Protection did a deal with eircom - the allowance which was reduced from September 2011 doesn't cover the monthly rental, but eircom agreed not to charge customers the balance.
The deal didn't apply to other phone providers, which is why you're being charged a small rental fee.
Here's the quote from the Minister's press release in July 2011
The Telephone Allowance will be set at €22.22 per month (from €25.91 per month) from September 2011. However, the Department of Social Protection has negotiated with Eircom, the main supplier, to ensure that all Eircom customers will get a value of €26.86 towards their telephone bill.