Deputy Bernard Durkan gave me notice of his intention to raise on the Adjournment the subject matter of the Housing Finance Agency payments in respect of deserted wives.
Adjournment Debate. - Housing Repayments by Deserted Wives.
I should like to thank you for affording me the opportunity of raising this matter in the House and also to thank the Minister of State, from an adjoining constituency, for coming in here to reply.
This matter arises from a development that is manifesting itself in relation to housing finance agency mortgages which were entered into by couples, in recent years under the terms of the Housing Finance Agency Act, 1981. The difficulty arises where, subsequent to their entering into mortgage agreements, the wife becomes deserted. There are two or three different categories. The first is where a legal separation exists, where the various proceedings had been gone through and where there is no doubt and no difficulty about determining income. That is acceptable to the agency in determining the amount of mortgage repayment that is necessary. I mention the question of the amount of mortgage repayment because, on the basis of the contract entered into originally by the couples, under the Housing Finance Agency Act and the various forms signed at that time, provision was made under the Act for granting loans to couples based on the higher income, if there were two. Repayments were to be made on the basis of 18 per cent or 20 per cent of their gross income in the previous tax year.
The problem is in cases where there has not been a legal separation or court proceedings but where separation may have taken place three, four or five years ago. In many such cases serious hardship is now being experienced by a number of deserted wives. In the manner in which the scheme is operated a deserted wife with a weekly income of approximately £85 or £90 with one or two children, would normally pay somewhere in the region of £15 to £16 per week in mortgage repayments. In circumstances like that she can hold on to her house and her mortgage payments are up to date by virtue of adhering to that payment principle. The downside of that system is that it will obviously take longer to purchase the house and that was understood at the beginning.
The Housing Finance Agency and some local authorities — who act as agents for the HFA — do not accept the sole income of the wife and refer to an assumed income from an estranged husband. On that basis they put the wife on mortgage repayments at an annuity or maximum rate which is originally determined in respect of each mortgage. The effect of that decision is that after a year, instead of being up to date with her payments of, say, £15 or £16 per week, the deserted wife is considerably in arrears by virtue of her inability to meet her mortgage repayments of somewhere in the region of £200 or more per month. There is no possibility that a deserted wife in those circumstances can pay anything in the region of that sum per month. Gradually the arrears build up to such an extent that some deserted wives owe the Housing Finance Agency — through the local authority — up to £5,000, £6,000 and £7,000.
As time goes on pressure is brought to bear on the council to repossess those houses, which is unfair for a number of reasons. One reason is that at present the local authority have very little option in regard to rehousing such people because the house building programme is very small and there are no houses available. The second and more important reason is the manner in which the mortgage originally negotiated is being abused — not deliberately, it is just a part of the regulation and its interpretation — to such an extent that ultimately, the wife will have to give up her house and she and her children will then be homeless. The Family Home Protection Act, 1976, and the Housing Act, 1981, which were introduced to look after the interests of people in those circumstances, have been practically set aside.
I should like to compliment the Housing Finance Agency for the loan scheme in operation which initially catered for an area of the market which was not catered for elsewhere. I know that the agency are probably anxious to resolve the problem in the best manner possible. I ask the Minister to contact the agency and try to work out an arrangement whereby the present income of a deserted wife is taken into account in determining her mortgage repayments. He should make that arrangement retrospective to the time the husband left the home. He should also take into account the period of five or six months prior to the husband's departure when he may not have been providing for the family in the normal way and where arrears may have accumulated. It is important for the Minister to do this now and try to persuade the agency to agree, otherwise, the unfortunate consequences will be that where a judicial separation has not taken place or where there is not a permanent legal arrangement with regard to the dissolution of the marriage, those unfortunate wives and children will be out of a home.
I am pleased that Deputy Durkan raised this matter and I am sure he will appreciate that it is very complicated. The 90 per cent ceiling was introduced in 1986 by the Government following a detailed review of the operation of the HFA loan scheme.
Last year I had to bring in a Bill to tidy up the scheme because the Housing Finance Agency had a bad debt provision of £10 million, a lot of money. I recall that when I was in Opposition I spoke on that Bill and I outlined the consequences if it was passed. I said there was a great danger that the taxpayer would be asked to bear this liability and, unfortunately, I was right. If there is a legal separation, proper arrangements can be made but, in some cases, I am sure the Deputy will admit, it is hard to ascertain that people are separated. I do not want to get into this area but it is certainly a complex one. My experience in my own constituency is that the local authority, in conjunction with the Housing Finance Agency, have been able to come to an arrangement in most cases with a person in that category.
In exceptional cases the local authority have power to repossess the house and to make the family a tenant of that house. I appreciate the Deputy's interest and if he can give me details of any case in which he has an interest I will be glad to look into it to see what can be done to help. However, I am sure he will appreciate that I have to be careful going down that road. When there is a genuine case of hardship I will see what can be done in this respect. My experience as a public representative, locally and nationally, has been that there are very few cases of hardship and few, if any, complaints have been made to me or to the Department. All the local authorities are very sympathetically disposed towards people suffering great hardship and, as I said, if the Deputy gives me a case of genuine hardship I will look into it. This applies to any Member of the House and I will see that arrangements can be made with any local authority. I cannot say any more because a lot depends on the circumstances of each case. Many cases are not as clear-cut as they may appear at first glance.
I regret that I have not given the Deputy a more favourable reply but I am prepared to talk to him in my office on this or any other issue regarding someone in a difficulty. The provision of £10 million, which we have had to provide through the taxpayers, shows that the HFA and the local authorities have been sympathetically disposed towards people who are experiencing great hardship.
Deputy Durkan rose.
The Minister's reply normally concludes the debate.
I appreciate that. The cases I referred to are clearly cases of desertion, there can be no doubt about that. The present policy is at variance with the system in which the couple originally entered into a mortgage agreement.
If it is legal there is no problem but where there is a grey area there has to be further investigation. However, if the Deputy has a particular interest I will see what I can do.
The Dáil adjourned at 5.30 p.m. until 10.30 a.m. on Friday, 1 December 1989.