My Department has overall responsibility for the money advice and budgeting service, MABS, which provides assistance to people experiencing difficulty in meeting repayments on borrowings. There are 52 independent companies nation-wide operating the service.
The MABS programme provides money advice, including the publication of information on money management and debt counselling, to individuals and families who have problems with debt, particularly indebtedness to moneylenders, and who are on low income or in receipt of social welfare payments.
The MABS does not provide financial assistance to its customers. Rather, the service places an emphasis on practical budget-based measures that help people to move permanently from dependence on moneylenders and to access alternative sources of low cost credit.
In 2003, I provided €9.9 million for the operation of the MABS and an additional €1.01 million was allocated for 2004 in the recent budget. The latest information available from the companies providing the service shows that some 12,000 people are currently availing of the service.
MABS supplement payments paid under the supplementary welfare allowance scheme were made by the health boards because the people concerned had entered into repayment arrangements that were so onerous that they did not have enough income left to meet their basic needs. Some 340 people were in receipt of these supplements at the beginning of February.
At the time the decision was taken to discontinue the MABS supplement, over 50% of the MABS supplements in payment had been in payment for more than a year and nearly 25% of recipients had been in receipt of the supplement for more than two years. The duration of these payments confirms that the supplement has gradually become a long-term arrangement which is effectively a subsidy for creditors.
These supplements have not been used in three health board regions and were very rarely used in another region, which demonstrates that it is possible to deal with indebtedness without using this approach. The good practice established in these areas in this regard will now be put in place throughout the State. MABS supplements currently in payment will not be withdrawn. Payment of the supplement in these cases will continue for the duration of their current term of agreement.
The period before Christmas is a difficult one for people with debt problems. It is with the support and expertise of the MABS companies throughout the country that people can be best assisted in sorting out their debts and these companies will continue to provide their services to people who need it.
In the circumstances, I am satisfied that the decision to discontinue the MABS supplement is reasonable and will require creditors to take a more realistic approach to the repayment arrangements a debtor can afford to make. Health boards may still deal with emergency or exceptional cases at any time of the year by way of exceptional needs payments or an urgent needs payments.
