Dáil Éireann díospóireacht -
Tuesday, 16 Feb 1993

Vol. 426 No. 1

Written Answers. - Incidence of Illegal Moneylending.

Jim Mitchell

Ceist:

12 Mr. J. Mitchell asked the Minister for Social Welfare his views on whether the problem of moneylending has escalated considerably in recent months because of the growth in unemployment; if he will permit interest free loans and other necessary costs to be granted under the supplementary welfare system in addition to the existing supplementary welfare grants.

Proinsias De Rossa

Ceist:

42 Proinsias De Rossa asked the Minister for Social Welfare if, in view of the reported upsurge in the incidences of illegal moneylenders, he has any plans for measures to assist low income families who may be vulnerable to illegal moneylending; and if he will make a statement on the matter.

Minister for Social Welfare (Dr. Woods)

I propose to take Questions Nos. 12 and 42 together.

I have been particularly concerned for some time about the problem of moneylending both in rural and urban areas. This is a serious problem which has been with us for some considerable time and which particularly affects the unemployed and those on low incomes generally.

I plan to introduce a household budgeting facility for social welfare customers by next May. It is planned to introduce the new service on a trial basis in Dublin and to extend this facility as quickly as possible to all areas of the country. I have already introduced the legislation to allow for decuctions to be made from social welfare payments with the claimant's consent. The amounts can then be paid over to the ESB, the Gas Company and local authorities. An Post has been asked to develop the household deduction facility as part of the development of their services to social welfare clients.

I see this service as having great potential to assist social welfare families who do not normally have access to the financial budgeting service provided by the banks. The offices included in the initial phase are: (A) North Cumberland Street, Ballyfermot, Kilbarrack, Nutgrove, Tallaght and Werburgh Street. The organisations which have agreed to participate in the scheme are: (B) the ESB, Bord Gáis Éireann, Telecom Éireann, An Post (TV licences), and Dublin Corporation and Dublin County Council for rent and mortgage.

In 1992, my Department funded the establishment of pilot projects around the country aimed at building new and more comprehensive approaches to combating the problems of moneylending. Five projects were set up in Dublin city west, west Clare, Cork city, Limerick city and Waterford city. Under this scheme local groups who had already been involved in this work are expanding their efforts and are trying out a variety of new and different approaches to tackling the problems of moneylending. The key elements of the projects include a general money advice element, targeted at families identified as having particular problems with moneylenders, a role for both statutory and voluntary bodies and an emphasis on practical, budget based measures that would have success over the long term in removing people from dependence on moneylenders. The regional management of my Department and the local community welfare service are both actively involved in these projects.

The work of these projects is being monitored by my Department. I will be examining the results of this evaluation with a view to extending the scheme.

This initiative builds on the experience of the loan guarantee fund which I set up in 1990. This fund continues to be operated by the Society of St. Vincent de Paul which provides valuable assistance to families with problems of indebtedness.

Credit Unions are co-operating in the work done by my Department and the community welfare officers. Any further measures will be taken in the light of our experience with these initiatives.