Ciarán Cannon (Galway East, Fine Gael)

I move amendment No. 17:

In page 6, before section 8, but in Part 2, to insert the following new section:

12.—Section 198 of the Principal Act is amended by inserting the following subsections after subsection (5A) (inserted by section 14 of the Social Welfare (Miscellaneous Provisions) Act 2008):

"(5AA) A person shall not be entitled to the supplement referred to in subsection (5) unless, at the time of making an application for that supplement, a designated person is satisfied that the person making the application has engaged with his or her mortgage lender in order to meet his or her mortgage repayment obligations, and

(a) has, arising from such engagement, entered into and, where required, is complying with an alternative repayment arrangement agreed between that person and his or her mortgage lender in respect of his or her mortgage repayment obligations for a period of not less than 12 months, or

(b) has—

(i) arising from such engagement, entered into and, where required, is complying with an alternative repayment arrangement agreed between that person and his or her mortgage lender in respect of his or her mortgage repayment obligations for a period of less than 12 months in respect of that alternative repayment arrangement, and

(ii) prior to entering into the alternative repayment arrangement referred to in subparagraph (i) the person had entered into and had complied with a different alternative repayment arrangement agreed between that person and his or her mortgage lender in respect of his or her mortgage repayment obligations,

and the total number of months in respect of which that person has complied with the alternative repayment arrangements referred to in subparagraphs (i) and (ii) is a period of not less than 12 months.

(5AB) Subsection (5AA) shall apply to a person who makes an application for the supplement referred to in subsection (5) on or after the day on which section 12 of the Social Welfare and Pensions Act 2012 comes into operation.

(5AC) In subsection (5AA)—

'alternative repayment arrangement' means any arrangement entered into by an applicant for the supplement referred to in subsection (5) with his or her mortgage lender—

(a) in respect of his or her mortgage that incorporates a change in any terms or conditions of the mortgage that applied when the mortgage took effect, and (b) for the purpose of assisting that person to resolve any difficulties he or she may have in meeting his or her mortgage repayment obligations, and, without prejudice to the generality of the foregoing, includes any practice, referred to in a code of practice drawn up under section 117 of the Central Bank Act 1989, that is specified for the purpose of resolving any difficulties with meeting mortgage repayment obligations.".".

The purpose of the mortgage interest supplement scheme is to provide short-term support to eligible people who are unable to meet their mortgage interest repayments. The supplement is paid in respect of a premises which is the person's sole place of residence. The supplement assists with the interest portion of the mortgage repayments only and not with the capital repayments. There are currently more than 18,000 people in receipt of mortgage interest supplement, an increase of more than 340% since 2007.

My Department reviewed the administrative policy and legal aspects of the mortgage interest supplement scheme and this review was published in July 2010 in conjunction with the interim report of the mortgage arrears and personal debt review group. The final review of the mortgage arrears and personal debt review group was published in November 2010 and its recommendations were considered by the interdepartmental mortgage arrears working group whose report to the Government's Economic Management Council was published on 12 October 2011. The Department supports the key findings of the mortgage arrears and personal debt review group which is also supported by the Government's economic management council, that the curtailment of the mortgage interest supplement scheme should be introduced in light of other alternative social housing solutions now being proposed. The budget for 2012 provided for the curtailment of access to the mortgage interest supplement scheme for the first 12 months while the person is involved in the mortgage arrears resolution process as set out in the code of conduct on mortgage arrears applying to mortgage lenders. The underlying principle is to ensure the mortgage arrears resolution process functions alongside State supports such as mortgage interest supplement and that the forbearance arrangements implicit in the mortgage arrears resolution process are reflected in the eligibility criteria for the mortgage interest supplement scheme.

See this speech in context