Joanna Tuffy (Dublin Mid West, Labour)

I wish to cite two examples of the type of person who now needs assistance, who differs greatly from the type of person who needed assistance in the past. A story published in last Saturday's edition of the Irish Independent outlined the difficulties faced by a man and his wife who had taken out a mortgage. The man had a monthly salary of €4,700 and monthly mortgage repayments of €1,500 on a €230,000 mortgage. He worked in construction, but lost his job. He has credit card debts of €16,000. He now has a weekly wage of €400. If he were to sell his house, he would make no more than €180,000, which would be €60,000 less than the value of his mortgage. A credit card company telephoned him and offered him a €10,000 credit limit, which he accepted at the time.

I know of a similar case in my office involving a young couple. One partner who is a carpenter worked in construction. The couple purchased a house for more than €300,000 and they have monthly mortgage repayments of €1,500. The partner who worked in construction on losing his job applied for jobseeker's benefit and was only given such benefit for 12 months. When he applied for jobseeker's allowance and account was taken of his partner's income, that brought him just over the qualifying income limit. The couple were turned down for mortgage interest supplement and family income supplement, for which they were just over the qualifying income limit. They are now in severe financial difficulties, have mortgage arrears and cannot pay their bills. Their mortgage repayment protection policy has run out and they are in dire straits.

These cases are extreme in one sense but they are becoming typical and will become more so. We need to adjust to this new type of person who needs assistance. In a sense they are the new poor. Some of these people are in receipt of social welfare payments now, never having been in receipt of them previously, and more of these people are not in receipt of any form of social welfare assistance. There is much talk about the need to protect the poor and we need to do that. Traditionally, that has been taken to be people on low incomes, social welfare recipients and often people living in social housing or people who have low mortgages. We also need to protect people who, traditionally, were middle income earners who have now fallen on hard times. We seem to forget that the ratio of mortgage payments to income in the case of middle income earners is far greater than it was in the past, even though these people might appear to have good incomes - although they incurred reductions recently - compared to incomes 30 years ago. That is all a product of the housing bubble and the Celtic tiger. We need to protect those people. Our system is not geared towards protecting those new families who are experiencing difficulties.

The Society of St. Vincent de Paul has a comment on its website, which I find striking, to the effect that some conferences working with individuals and families, who did not benefit from the boom, are experiencing little change in their workload. I am not surprised by that because the position of a person on a social welfare income, living in social housing a few years ago and his or her position now has not changed much. We need to protect those people. Deputy Gilmore raised that issue this morning. We must continue the progress being made in lifting those people out of poverty and make sure that relative poverty does not increase. In doing that, we do not want to allow the middle income group to fall into poverty, whereby we would have a reduced middle income group. We talk about the middle class but often these are people in the middle who have huge mortgages and outgoings. We need to remember that these people are now struggling.

The Minister's response to the difficulties faced by such people is often to refer to MABS or the mortgage interest supplement, but many of these people do not qualify for that supplement. In its pre-budget submission, MABS refers to helping the poor, its clients mainly being people on low income and social welfare recipients living in social housing. It does not cater for the new type of person facing financial difficulties. Much of that is related to the geography of where its offices are based, which tend to be in the more disadvantaged areas. There is no MABS office in Lucan where many people are losing their jobs. Lucan would be very representative of the commuter belt where people are in difficulty. We need to gear up our system to deal with the new type of people who are facing financial difficulties. We need to provide them with assistance, the type that Deputy Ciarán Lynch outlined in his motion. This is not a short-term problem that can be dealt with by providing more staff, MABS or a 12 month grace period in respect of home repossessions. This is going to be a long-term problem. We need to restructure our system to help these people pay their mortgages. We need to consider mechanisms such as the State or the banks taking an equity in these people's houses to allow them a longer period to pay off their mortgage. We must do something to address this issue which will become a growing problem.

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