Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. The original purpose of the mortgage interest supplement scheme was to provide short-term support to eligible people who, due to temporary unemployment or loss of earnings, were unable to meet their mortgage interest repayments in respect of a house that was their sole place of residence.

The 2011 interdepartmental mortgage arrears working group report, known as the Keane report, identified mortgage interest supplement as an inappropriate long-term support. The central tenet of the report's findings was that mortgage interest supplement did little to assist families in improving the long-term difficulty in addressing their mortgage problem.

The scheme was discontinued because it did not address the long-term challenges for people in serious mortgage arrears. While it covered the interest payments on a mortgage, it did not reduce the value of the outstanding mortgage debt and it acted, in effect, as a subsidy to the lending institution while creating a potential welfare trap for the customer.

The scheme was discontinued for new entrants from 1 January 2014 on the basis, as I said, that the ongoing payment of mortgage interest supplement did not address the long-term housing challenges for people in serious mortgage arrears. There are currently 492 households receiving mortgage interest supplement from my Department, down from 9,768 when the scheme closed in 2014. The Central Bank's code of conduct on mortgage arrears, CCMA, provides a more appropriate framework for customers, with the responsibility of forbearance for mortgage difficulties resting with the mortgage service provider. In accordance with the CCMA, lending institutions are encouraging customers to contact them at the earliest opportunity regarding their concerns and any particular circumstances that may impact on the customer's financial well-being.

Additional information not given on the floor of the House

The Money Advice & Budgeting Service, MABS, under the aegis of the Citizens Information Board, continues to provide assistance to people, in particular those on low incomes or living on social welfare payments who are over-indebted and need help and advice with debt problems. As part of its free services, MABS provides help and advice to those in mortgage arrears.

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