Dáil Éireann debate -
Thursday, 11 Dec 1997

Vol. 485 No. 1

Adjournment Debate. - Social Welfare Benefits.

Mr. Durkan

I thank the Ceann Comhairle for affording me the opportunity of raising the anomaly which, over recent years, has crept into the administration of supplementary rent and mortgage allowances to separated people.

It has gradually become more obvious that the administration of this scheme discriminates against separated spouses who have custody of their children and a mortgage, often substantial, on their houses. On the other hand, a person who has had to sell his house and is homeless is fully supported by the scheme, which is operated by the health service but paid for by the Department of Social, Community and Family Affairs. That person's immediate housing requirements are met in full. The system discriminates against spouses, usually women, who have the responsibility of maintaining themselves, their children and their mortgages. They get virtually no assistance at present, except in extreme cases.

The State must always be mindful of getting good value for its spending. If these women had never had a house or had sold their houses they could qualify for the maximum rate of rent supplement. There is something wrong in such a system. I can offer the Minister the example of two cases with which I dealt recently. A woman with an income of £180 per week to feed, clothe and maintain seven people in the household had a mortgage of more than £125 per week. She could not pay the mortgage. The system failed to recognise that woman's plight and to respond until the last moment when the court was about to repossess her house on behalf of the building society.

Another case involved a separated woman who also had custody of her children and a mortgage. Between lone parent's allowance and part-time employment, she has an income of about £160 per week to feed, clothe and maintain four people, one adult and three teenagers, and service a mortgage of more than £500 per month.

These two cases are not isolated and the Minister is familiar with this problem. I am concerned the system has turned against people in that category. The assessment system in the Department of Social, Community and Family Affairs, which operated when I was Minister of State at that Department, is not fair and discriminates against such people. Under the regulations the separated spouse, usually a woman, must make reasonable efforts to ensure she receives maintenance from her former husband. The problem is that the degree to which she is expected to seek that maintenance puts her in a vulnerable position, to the extent that she could virtually starve to death before she has exhausted all the procedures.

Will the Minister examine those procedures? It does not require vast expenditure. The administration of the rules as they apply to that category of people is being operated wrongly according to the guidelines, as far as I am aware. The health boards which operate those instructions as agents of the Department of Social, Community and Family Affairs are doing so in a way that is wrong and unfair to the people concerned.

Mr. D. Ahern

Deputy Durkan raised this matter with me outside the Chamber last evening but the matter for discussion tonight is somewhat different. However, I am aware of his intention. The response I will deliver is strictly related to the subject of this debate. With regard to the broader issue of separated spouses who are maintaining children and a mortgage, I accept there are difficulties. It is one of the age old problems involved in separation, that two families into one income will not go. That is the difficulty with separation and divorce in society, which is a broader issue. I am aware of the issues to which the Deputy refers and perhaps we might get together to tease them out. From the point of view of the Department, however, there are logical reasons for the way in which this scheme is implemented.

The supplementary welfare allowance scheme, SWA, provides for a weekly or monthly supplement to be paid in respect of rent or mortgage interest payments to any person in the State whose means are insufficient to meet their needs. The amount payable depends on the person's circumstances and on the cost of the accommodation. In the case of mortgage interest supplements, the rate of supplementation varies according to the amount of interest charged and does not take the capital element of the repayment into account. This is the core of the issue to which the Deputy referred. It does not relate to the assessment and what the Deputy says is the insistence by the Department that a separated spouse chases the errant spouse.

Entitlement to a rent or mortgage interest supplement is determined by the health boards and the amount paid depends on the individual circumstances in each case. The rate of either rent or mortgage interest supplements payable in any individual case is generally calculated to ensure that the person has an income equal to the rate of SWA appropriate to the family circumstances, less £6. This £6 represents the minimum contribution which applicants are required to pay from their own resources.

The maximum amounts of rent and mortgage interest supplement payable differ within and between health board areas as the cost of accommodation varies across each health board reflecting market forces and local conditions. Maximum rent and mortgage interest supplementation levels are also set according to family size.

Broadly speaking, similar maximum levels of supplementation apply to both rent and mortgage interest supplementation. For example, in the Eastern Health Board area, the maximum supplement for a family with two or more children is £450 per month for both rent supplement and mortgage interest supplement. The purpose of the rent supplement scheme is to assist eligible persons who would otherwise be unable to meet their housing needs. Rent supplements form the bulk of housing supports under SWA.

The purpose of the mortgage interest supplement scheme is to help people meet their mortgage interest repayments in respect of a house which is their sole place of residence. Generally speaking, claims are made for a short period only and often as a result of an unexpected change in a person's circumstances.

The mortgage interest supplement scheme operates on the basis that the person shall be entitled to a supplement towards the interest portion of the mortgage repayments only. The capital element of mortgage repayments becomes significant only towards the end of the mortgage period. This refers to the type of situation the Deputy referred to.

As a consequence, excluding the capital element of the repayment from the SWA calculation does not significantly reduce the amount of mortgage interest supplement payable in the early years of the mortgage when repayments generally represent a high proportion of household income. By the time the capital element forms a significant element of the mortgage repayment, the total monthly mortgage repayment usually represents a smaller proportion of household income and the outstanding capital sum usually represents a small proportion of the market value of the house. The principal is not, and never was, taken into account in the calculation of the mortgage interest supplement because it is not considered appropriate that the Exchequer should repay part of the initial loan and thereby provide assistance towards the accumulation of a capital asset on the part of the individual concerned.