Dáil Éireann Debate, Tuesday - 29 June 2010
37 Deputy Noel J. Coonan asked the Minister for Social Protection the number of persons in receipt of mortgage interest supplement; the cost for same; if he will arrange for the collection of figures on the number of persons who apply for mortgage interest supplement; and if he will make a statement on the matter. [27903/10]
Amharc ar fhreagra44 Deputy Joe Costello asked the Minister for Social Protection the way he intends to reform mortgage interest supplement. [27976/10]
Amharc ar fhreagra45 Deputy Paul Connaughton asked the Minister for Social Protection if he will provide details on the review of the mortgage interest supplement scheme; the changes envisaged under this review; if he will publish the report; and if he will make a statement on the matter. [27900/10]
Amharc ar fhreagra58 Deputy Olivia Mitchell asked the Minister for Social Protection his plans to amend the mortgage interest supplement scheme; if he will make revised guidelines publically available; and if he will make a statement on the matter. [27944/10]
Amharc ar fhreagra421 Deputy Róisín Shortall asked the Minister for Social Protection when and the way in which he intends reforming mortgage interest supplement. [28508/10]
Amharc ar fhreagraI propose to take Question Nos. 37, 44, 45, 58 and 421 together.
There are 16,800 people in receipt of mortgage interest supplement, compared to 8,000 recipients in 2008. Expenditure for the year ending December 2009 was €60.7 million and the Estimate for 2010 is €63.9 million.
Generally, all applications for mortgage interest supplement are recorded electronically. However, as this practice can vary across community welfare areas, full statistics for the number of people who applied for mortgage interest supplement are not available. Community welfare officers have been reminded on many occasions to record the details of receipt and status of all claims electronically. However, requests to change operational procedures must be viewed in the context of the increased demands being placed on community welfare officers in the current economic environment.
The mortgage interest supplement scheme is currently under review. The main purpose of this review is to examine how the scheme can best meet its objective of catering for those who require assistance on a short-term basis. The review group includes representatives from my Department, the community welfare service, the Departments of Finance and the Environment, Heritage and Local Government, and the Office of the Financial Regulator. As part of the initial review, guidelines on specific and immediate operational issues were drawn up and circulated to the community welfare officers. These guidelines are available on the Department's website at www.welfare.ie.
The group is examining trends in programme and administrative costs, the impact of the Financial Regulator's statutory code of practice on mortgage arrears and legislative and operational issues arising. The review is also considering whether alternative approaches to achieving the scheme's objectives are warranted in the light of recent changes in the economic climate and the mortgage market.
More recently, the Government has established a broader and more comprehensive review of mortgage arrears and personal debt. The mortgage arrears and personal debt review group, under the independent chairmanship of Mr. Hugh Cooney, comprises representatives from my own Department, the Departments of Finance; the Taoiseach; the Environment, Heritage and Local Government; Justice and Law Reform; and Communications, Energy and Natural Resources. In addition the group has representatives from the Office of the Financial Regulator, the ESRI, the Irish Banking Federation, the Free Legal Advice Centre and the Law Reform Commission.
The terms of reference for the group are based on the renewed programme for Government, with an emphasis on protecting the family home. They include a review of the statutory code of conduct on mortgage arrears and the recently agreed protocol between the Irish Bankers Federation and the Money Advice and Budgeting Service on debt default, with a view to expanding the options available for dealing with debt situations to avoid foreclosure. In addition, the group is examining measures adopted in other jurisdictions and considering ways of expanding existing mortgage-support measures. The group will report to the Minister for Finance in the coming weeks. The conclusions and recommendations from the review of the mortgage interest supplement scheme, which is currently being finalised, will inform the work of this group.
This is just repetition.
My first question concerned the collection of figures on the numbers applying for mortgage interest supplement. In the past, there have been difficulties getting figures for those who apply and those who have been refused. I am concerned about the different ways this is operated. The Minister says guidelines have been sent out, and perhaps they have, but I am still getting different responses as to why people are being refused and the length of time for getting it in some places. There does not appear to be any clear operation of this across the community welfare service.
When the Minister gets the report in the next few weeks, will there be changes in the operation of mortgage interest supplement? I do not know what will be in the report, but there are problems here that need to be tackled.
Has the Minister any view on the way the financial institutions are using the mortgage interest supplement? I have had people come to me who tell me the bank has told them it will not foreclose if they get mortgage interest supplement. When they are refused mortgage interest supplement, the banks treat them more harshly, although it was the bank who gave them the loan in the first place. The community welfare officer decides that person should never have got the loan, which is great with hindsight, but it leaves people in a difficult position. Has the Minister discussed this with the Minister for Finance? We are guaranteeing the banks but they are treating people harshly.
I spoke to the Minister for Finance in a general way about this issue. I also spoke to Mr. Hugh Cooney about it. It is important that the benefit of the mortgage interest supplement is to the mortgage holder. Many parties have a part to play in resolving this; the banks lent the money and in some cases they did less than their homework before doing so. We have all come across such cases. l have noted the Deputy's remarks about the uniform application of the scheme and it is important, as far as possible, that there is uniform applications of the rules. Different referees interpret the rules differently, however, and no matter how rules are codified, different interpretations are possible. I will discuss this further with my officials to see if there are any further ways to ensure that.
Without pre-empting the report, the beginning of resolution to a person's debt problems, if he is in serious difficulty and his problems cannot be resolved by meeting with the bank, must be a meeting with MABS to work out the total financial situation independently. Otherwise the situation the Deputy mentions arises.
The Minister's general response to the issue seems to be that someone somewhere should do something. The Minister is in the position to act here and instead of reading out long answers, it would be better to engage in the topic and tell us what he intends to do rather than hiding behind prepared answers and talking about the Cooney report. It is ludicrous that we do not know how many people apply for mortgage interest supplement. That is a major gap in the information systems that should be addressed now.
The mortgage interest supplement scheme has not been reformed since the mid-1990s. It does not reflect the reality of the boom and post-boom years. We now have a situation where many people, some of them on very low incomes, are being refused any kind of assistance under the scheme because of the arbitrary nature of the rules that apply. Leaving aside the Cooney report, the Minister is responsible for the review of the mortgage interest supplement scheme. That review was supposed to be ready at Easter 2009, then Easter this year and it is now 15 months overdue. When does the Minister expect to get it? The delay means more people will be in serious danger of losing their homes. Let us have some action.
I agree that we need action but it must be taken in a focused way. As I indicated to Deputy Enright, I expect the Cooney report in the next few weeks and the mortgage interest supplement report will be available at the same time because they are linked together inextricably.
What does that mean, inextricably linked? Is the review complete and does the Minister have a copy of it?
I do not have a copy but I understand it is almost complete. I hope to have a copy in the next few weeks.
What did the Cooney group get from the Department?
It is getting everything we have. Everything we are looking at in the mortgage interest supplement report will be available to it. It would be a nonsense otherwise.
How can matters be meshed if there are not two separate reports?
I will call on both Deputies again but I want to allow a further supplementary from Deputy Seymour Crawford.
Many people are under severe pressure at present. They do not want reports or debates, they want action. Huge amounts of money have been paid into the banking system. What benefits do ordinary punters receive from that major investment which we have made as taxpayers? It does not seem that ordinary people who have a mortgage that is now overdue receive the support to which they should be entitled. I encourage the Minister to do something to make it worthwhile.
I am not sure whether a question was asked.
I think the question was on when it will all happen. We have two reports and I hope that——
No, we do not have two reports.
Allow the Minister to answer.
Two reports are being prepared, which we should have in the next few weeks. The process will be quite simple. We will receive the two reports, the Government will consider them and then make decisions on foot of them. Those decisions, to be made not by me but by the Government, will be made in the next few weeks, once we receive the reports. However, I cannot — which the Deputy wants me to do today — tell her the decisions. I have not seen the reports and therefore I cannot make decisions on them. Of course I have my views on what should happen and I will bring them to the Cabinet table. I share with everybody in the House concern about protecting the family home. If I understand the tenor of Deputy Crawford's question, I believe the banks must be part of the solution and I also believe that MABS, in laying out and ascertaining the amount of debt in the first place and working out a financial plan, has a key role to play as a free State-provided service that is very professional.
I want to allow a brief supplementary from each spokesperson.
Will the Minister please focus on the review that is now 15 months overdue? He speaks about being concerned about people in danger of losing their homes but he allows this matter to drift so there is an inexcusable delay in producing the review. Stop confusing this with the wider issues on debt, and there is no doubt that big problems exist. I am asking about the specific review undertaken. What is the reason for the delay in that? When does the Minister expect that review to be complete? When can we see a copy of it?
I came to the Department at the end of March and have been there for three months. We hope to have the review completed in the next few weeks.
When will it be ready?
In the next few weeks.
We have been told "the next few weeks" for the past 15 months.
Allow the Minister to answer the question.
Most people would accept that "the next few weeks" means from two to four or five weeks.
The difference is that we have been told "the next few weeks" for the past 15 months.
Allow the Minister to answer please, Deputy Shortall.
There is no sense of urgency at all on this issue.
I will try to be more specific. I hope it will be in the next month.
We were told that——
In the English I use on the east coast and west coast, "the next few weeks" means "the next month". If Deputy Shortall would find "the next month" more satisfactory, I will say "within the next month". This will mean that within four months of my arrival at the Department, this matter will be brought to finality. Not only are we bringing the mortgage interest supplement review to finality, which is only part of the jigsaw, we are also bringing the Cooney report to finality and making decisions.
We will wait and see.
By making decisions on both we will be able to give a comprehensive response. I might be wrong but I do not believe the mortgage interest supplement review on its own would answer the major debt problems that people face because——
Nobody is saying that.
Good. I am glad.
The Minister should stop putting up straw men. The Minister was asked——
Allow the Minister to answer the question. I want to allow another supplementary from Deputy Enright.
It is not the fault of struggling home owners that for various political reasons we have had four different Ministers at the Department in the past five years. The fact the Minister has been in the job for only three months is no excuse for the fact that there has been no action on this since the review group was established more than three years ago. Forget about that. The Minister used it as an excuse on the previous occasion also and I do not know how many homes have been repossessed in the meantime. It is not their fault that the Government has changed ministerial portfolios so often.
The Minister is concerned with the issue of overall debt, as are we all. If this is the case, why has the Minister not changed the regulations to allow community welfare officers take overall household debt into account when granting mortgage interest supplement? They cannot do so. If a person has a mortgage, some of which is based on a house and more based on an amalgamation of debt, he or she is not allowed receive mortgage interest supplement on the amalgamation of debt part but only on the part which funded the purchase of the home. If the Minister is concerned about this why does he not deal with it?
The simple answer is that we are dealing with it. However, many issues must be examined and that is why the Cooney group and the mortgage interest supplement review were established.
The Cooney group was established because Deputy Eamon Ryan announced it.
Please.
Both of these will be brought to a conclusion in the next few weeks, or in other words, in the next month, and we will then make decisions. It is better to tackle a problem by doing a comprehensive review, examining practices in other jurisdictions, making comprehensive proposals——
Delay, delay, delay.
——and making decisions. One can rest assured that those decisions will be made because this is a top priority.
What happens in the meantime?
Reviews do not have to be so long.
