Margaret Conlon (Cavan-Monaghan, Fianna Fail)

I welcome the opportunity to contribute to this debate. The economic recession that grips our country has caused an unbelievable increase in workload at our social welfare offices and for community welfare officers throughout the country. The Minister for Social and Family Affairs, Deputy Mary Hanafin, acknowledged last night that waiting times are too long in some offices. Tackling this is a key concern for the Government. It is very important that people who find themselves out of work have their claims dealt with as speedily as possible.

I will concentrate my remarks this evening on a number of matters, but particularly matters relating to the area of debt enforcement. Deputy Enright raised a number of important points in this regard yesterday evening. Issues relating to debt come before the courts in many guises, including, for example, family law maintenance agreements, hire purchase agreements, creditor loans and failure to pay loan repayments to financial institutions, including credit unions. The courts take the view that, where possible, such disputes are best resolved through mediation between the parties involved, thereby avoiding court intervention unless absolutely necessary. I share that view. However, we must recognise that there are circumstances, undesirable as they may be, where it is necessary for people to be able to rely on the courts to enforce the terms of a contract. I cannot concur with the view that we should legislate to make accessing these rights more difficult. It would leave Ireland in a most unfavourable light internationally if our law prevented people from exercising their contractual rights.

The law provides that a judge shall only send someone to prison where the failure to pay is due to that person's wilful refusal or neglect. This provision is intended to ensure that if a debtor is genuinely unable to meet the repayments under an instalment order, steps can be taken to ensure that such a debtor is not sent to prison. The judge may order an adjustment in the payments schedule in order to meet the debtors changed circumstances. The threat of imprisonment is a last resort, but it can be effective. Many debts are paid off when the prospect of imprisonment looms. However, it is an appropriate remedy only where the desired result cannot be achieved by other means and the defendant's active co-operation is a vital ingredient. The imprisonment of defaulters — I understand this is a very emotive subject — is very much a last resort and people are generally given every opportunity to pay their debt and afforded an opportunity to show how they can pay.

It should not be presumed, as Deputy Enright recognised last night, that all persons who fail to meet their debts do so because of poor financial circumstances. Deputy Byrne highlighted some examples of this when he spoke earlier. The numbers so committed in any one year are very small compared to the overall numbers sent to prison. For example, in 2008 just under 12,000 people were sent to prison, with just 276 of that number committed as a result of failure to comply with a court order relating to the non-payment of a civil debt. The average sentence served by a person for this category of offence last year was 20 days. Indeed, if people had paid their debt while in prison, they would have been released immediately from custody.

Deputy Enright also made the point that only 20% of debtors appear at court hearings. This is unfortunate, because they lose a critical opportunity to have their side of the story heard. However, I am not convinced that if the process in the courts is changed to some other alternative form, there will, somehow, be 100% compliance. In fact, without the eventual prospect of a court sanction, there may be less compliance by debtors who will feel it is easier to default on payments.

It is not the primary function of the Department of Justice, Equality and Law Reform or the Courts Service to take on the significant role, in terms of personnel and resources, of operating a debt management service for persons who find themselves, for whatever reason, in arrears to banks, finance houses or public utilities. I am unconvinced that the issue of over-indebtedness, where the causes and effects are so multifaceted, can be dealt with primarily in a justice context. I join the Minister for Social and Family Affairs in encouraging persons with debt issues to engage as soon as possible with the Money Advice and Budgeting Service, MABS.

MABS is a national free service for people in debt or afraid of getting into debt. It assesses the financial situation of these people and prioritises significant debts. It provides an invaluable service in aiding people draw up a budget and restructure their loans and it helps them to manage their limited income and focus on their repayments. There are local MABS offices in every county, providing a crucial service for people who require help and advice in making their way out of serious debt. The Government continues to make significant financial resources available to the service. I believe that the approach adopted by MABS offers a better way of achieving a result acceptable to both creditor and debtor.

Numerous constituents have contacted me recently about their fear of court proceedings in cases of mortgage arrears. It has become apparent recently that some lending institutions routinely apply to the High Court for repossession orders. This has the effect of discouraging borrowers who are in arrears with repayment from defending proceedings because the cost of so doing is so prohibitive. I agree with Deputy Thomas Byrne that all repossessions or sale proceedings relating to housing loan mortgages should be taken in the Circuit Court. This would reduce costs and the inconvenience involved in making a court appearance, thereby encouraging borrowers who are in arrears to enter a defence in such proceedings. There is an onus on banks to act responsibly and to sit down with their clients and renegotiate the terms of loans and mortgages to take into account people's changing circumstances.

I also have major concerns with regard to debt collection and feel this issue should be highlighted. Many people are terrified and genuinely scared and worried that the next time the doorbell rings it will be a debt collector. Many people have been intimidated and terrorised by these people. I would advise that any person who is threatened or intimidated by debt collectors should report the incident to the Garda so they can investigate the claim and take appropriate action where necessary.

All Members are aware of the pressures of modern society and of what may be the fallout from the difficult economic circumstances in which many people now find themselves. The situation has been exacerbated by an unfortunate availability of consumer credit in recent years. Unfortunately, many are now experiencing the downside of having over-extended their borrowing arrangements or getting into difficulties because of a change in personal circumstances. The financial institutions must answer for this sin. Many people were given credit they had not sought. How many of us found when we got our credit card statements that our credit limit had been increased significantly? People automatically presumed this gave them a licence to spend free money.

I am aware that District Court judges recognise the work of MABS. In some instances, they recommend that people who are before the courts avail of the service. It is, however, often difficult to persuade persons in debt to engage in the process until their debts have reached a point where they are subject to a court process or where imprisonment looms. The willingness of a debtor to manage his or her case is crucial and seeking expert advice is the best way forward.

Deputy Cyprian Brady made the point last night that in February 2008, there were approximately 190,000 people on the live register, but that this number had increased by 165,000, or 87%, by the end of February 2009. This is an unprecedented and rapid increase. A welfare system must adjust and cannot just be changed over night. The Minister is committed to delivering a quality service so that all queries are dealt with in a speedy manner with the minimum turn-around time. Tied in with all of this is the need to tackle welfare fraud. I commend the Minister on the action she has taken so far in this regard. The Garda and the Customs Service are working closely with the Department to stop this criminal activity. It is a criminal activity, because any person fraudulently making a social welfare claim is stealing taxpayers' money. This cannot be condoned and should not be allowed to happen. It is imperative that it is stamped out once and for all.

Resources are scarce and many genuine people require assistance. Any person involved in fraud, no matter in what state they reside, should be pursued with the full rigours of the law. I would go so far as to say that as taxpayers there is a moral obligation on each of us to provide information to the authorities if we become aware of the existence of such activity. I encourage the Minister to maintain her efforts in this regard, whether that is by further cross-Border or EU-wide co-operation. I commend the amended motion to the House.

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