Joan Burton (Dublin West, Labour) | Oireachtas source

We are spending €42 million on this very important supplement, which is being received by around 12,000 people who are in difficulty with their mortgages. The critical issue is that there must be a solution between the borrower and the lender - namely, the bank and the person who is in difficulty. The Department of Social Protection spends €42 million on mortgage interest supplement that is then passed on to the banks. If a person receives a supplement indefinitely, as can be the case with rent supplement, he or she can end up in an unemployment trap in which it can be difficult to take up a job due to dependence on the mortgage interest supplement. That is one of the downsides to how the scheme operates.

We have worked very closely with the various agencies to ensure that the focus is on a sustainable resolution and not simply on something that actually locks a person into not being able to take up a job. That was an unintended consequence of how the scheme worked. If the banks engage with the individual, which they are required to do, then, if the individual has lost his or her job, he or she may be eligible for the supplement. Twelve thousand people get the supplement at a cost of around €42 million.

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