Catherine Murphy (Kildare North, Independent)

The most welcome aspect in respect of the Bill is that it has been published and is being debated. It is clear there are issues with it, including some to which the Minister referred, which can be dealt with on Committee Stage. While it is intended to try to conclude the Second Stage debate on the Bill prior to the summer recess, it is going to be extremely important that adequate time should be allocated in respect of Committee Stage. In that context, use of the guillotine should be avoided on Committee Stage which is going to be the most important part of the process relating to this legislation. I am somewhat disappointed that the regulatory impact assessment was not produced in parallel with the Bill. Such assessments are always of assistance to us in our deliberations. As a result of the fact that the Bill was only published on Friday last, we have not really had time to give it the kind of attention it requires in the interim.

We have been waiting a long time for this very complex Bill. Everyone accepts that a great deal of work has been done in the context of its drafting and in terms of considering the various pros and cons relating to including certain provisions. People understand that there is a need for a debt-resolution process. For that reason, I certainly will not be opposing the Bill on Second Stage. I want to see how it will evolve, particularly as there are certain aspects with which I have a difficulty.

The process outlined in the Bill is not going to be an easy one to navigate for those who enter into it. I cannot see people wanting to end up on a register because this will have serious implications for them in the context of how they live their lives, how their credit ratings will be affected etc. This is not going to be an easy process. We must, therefore, consider a range of other options which can be made available to people in order that they will not be obliged to enter into it. One such option relates to accelerating our efforts in respect of job creation. I commissioned a document from TASC, the independent think-tank, on how a stimulus package, if provided, could be job-rich rather than growth-rich in nature. Creating jobs and creating growth do not always involve the same things.

The second option would involve examining the position with regard to things that are linked. I refer here, for example, to mortgage interest supplement. I regret the way in which this matter has been dealt with in social welfare legislation. Under the relevant provisions, a person must be engaged with his or her lender for a period of 12 months before the supplement can be paid. There are people who could manage their debts during specific periods during the year if they were given support in the critical 12-month period to which I refer. The instrument being used in respect of mortgage interest supplement is extremely blunt. I understand from where the Minister is coming in the context of encouraging the banks to engage in respect of mortgage interest supplement, particularly because it is they who ultimately receive it. However, the provision that has been made in terms of the first year is inadequate.

We cannot look at the Bill in isolation. I see the sum of €3 million as large-scale debt. Much of it will relate to family homes, in respect of which there is a huge issue with negative equity in terms of the ability to sell the house and realise the amount required to pay off debts, while having an alternative means of finding accommodation. According to Central Bank figures, 764,138 private residential mortgages in Ireland are worth €112.7 billion, of which some 77,000 are in arrears for 90 days and 53,000 for more than 180 days, amounting to a figure of 6.9%. Total arrears amount to €1.2 billion, which is substantial. Some 79,712 mortgages are subject to restructuring plans, while 961 homes were in the process of repossession in the first quarter of this year.

We must consider whether the Bill will seek to keep people in the family home, if at all possible. If it is not possible to do this, I am concerned about the policies that will be applied to those who find themselves out of the family home. People must be out of the family home in order to qualify for placement on the housing waiting list. This involves a transition period. The local authority has up to three months to decide whether they will be placed on a waiting list and they must be on the waiting list before they qualify to apply for rent assistance, on which it can take up to three months for a decision to be made. These are the practical realities. There is a poverty trap built in because if people are working and trying to pay off their debts, they do not receive rent assistance. People on low incomes will lose their jobs. We must think about these matters because the practical issues will be important in making the resolution system work, even if it is just to put pressure on people to come to a resolution. The nuts and bolts must be cross-governmental and cannot relate to just one item of legislation.

The Insolvency Service of Ireland is to be established, but I would like to see much more information on what is envisaged. I do not know whether this information will be included in the regulatory impact analysis. It would be useful if the Minister addressed the issue in detail. I refer to capacity, funding and fees. We need to receive some indication of the details on these aspects.

Those with a disposable income of less than €60 per month after allowing for living expenses can avail of the first tier of the debt resolution process where the debt does not exceed €20,000. I am thinking about the practical application of this measure. What constitutes living expenses and how is the matter to be decided? The detail in this regard will be important. There could be different interpretations and the measure needs to be evenly applied. It is harsh, but it would be worse if the application was uneven. The MABS does a fantastic job with limited resources and will be asked to take on a heavier workload. If the Bill had been introduced during the good years, when a small number of people were coming through the system, it would have been easier to manage. Potentially, there are many people in the queue and they will all demand a service at the same time. Therefore, there may be a need for front-loading. This should be considered if the measure is to work in a fluid way for those with no option but to take this route.

Many of those involved are in a particular age cohort. They tend to be persons with young families as they have large debts at the beginning of their career paths. One of the two jobs that helped to sustain the mortgage may have been lost.

What constitutes living expenses in the case of key events which are often religious events which put pressure on people? People will be forbidden from accessing particular credit lines and it worries me that illegal moneylending may take place under the table.

Other Members have referred to practitioners. We need to see details of practitioners' fees and consider who has the capacity to deal with this issue. People need to have a good understanding of financial and legal matters. Even if there is not heavy regulation, there must be strong oversight if we are not to have rogue elements operating in this area. The measure is open to being used by such elements and this issue needs consideration on Committee Stage.

Regarding the disposal of the family home in a case of mortgage debt, creditors must agree and are in a strong position to veto the proposed debt settlement. In the case of mortgages, the co-operation of lenders is required. An article this morning in The Irish Examiner suggests that, according to an internal memo, AIB will not offer a write-down of mortgage debt. New Beginnings has stated there is no such thing as a debt write-off, only debt transfer. That is an accurate statement, but there was a large debt transfer from the banks to the taxpayer, to which there were strings attached and now we own AIB. I wonder how appropriate it is for AIB to issue internal memos on what it will do to subvert a means of resolving the cases of individuals who were sold mortgages by the bank. The mortgages were barely sustainable in the good times and are certainly not sustainable now.

The banks are not thrilled about this and the Minister may have to call them in. A debtor must show he has tried to co-operate but there must be a change in culture from the banks so that co-operation is a two-way process.

We must get hope back or there will never be confidence. The debt resolution system is part of that. It will be difficult for anyone who finds himself involved in it but it is how it is applied across Departments that will show whether it works.

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