Wednesday, 25 June 2008
Social Welfare Code.
Question 77: To ask the Minister for Social and Family Affairs if it is intended to offer assistance to families who might find themselves in difficulty with mortgage or rent repayments arising from the economic downturn; if rent or mortgage support are expected to be improved or qualification guidelines revised where the downturn in family income is expected to result in arrears of mortgage or rent with obvious consequences; and if she will make a statement on the matter. [24815/08]
The supplementary welfare allowance scheme, SWA, provides for a weekly or monthly supplement to be paid in respect of rent or mortgage interest to any person in the State whose means are insufficient to meet their needs. The purpose of the rent supplement scheme is to provide short-term income support, in the form of a weekly or monthly payment, to eligible people living in private rented accommodation whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. Similarly, mortgage interest supplement provides short-term income support to eligible people who are unable to meet their mortgage interest repayments in respect of a house which is their sole place of residence. The supplement assists with the interest portion of the mortgage repayments only.
In recent years, a significant number of people have come to rely on rent supplement for extended periods, including people on local authority housing waiting lists. On 13 June 2008 over 63,000 people were in receipt of a supplement of which almost 32,000 recipients are getting a supplement for 18 months or more. The scheme was not designed to meet long-term ongoing housing needs.
One of the measures introduced to address the issue of long-term rent supplementation is the rental accommodation scheme, RAS, which gives local authorities specific responsibility for meeting the long-term housing needs of people receiving rent supplement for 18 months or more. Almost 13,000 tenants have been transferred from the rent supplement scheme to RAS since 2005.
Significant changes to the means test for rent and mortgage interest supplement were implemented in 2007. Additional provision was made specifically to facilitate people on rent supplement returning to work and those accepted as eligible for accommodation under RAS. These measures are positive steps in assisting tenants in achieving a long-term housing solution for their needs while also increasing the financial return from employment for those returning to work or moving to full-time employment.
Overall, I am satisfied that the current rent supplement and mortgage interest schemes provide an adequate short-term safety net within the overall social welfare system to ensure that people do not suffer hardship due to loss of employment. Nonetheless, I intend to keep the schemes under review to ensure that they meet the objective of catering for those who require assistance on a short-term basis while long-term housing needs are dealt with in a more appropriate manner.
Are the Minister and her Department aware of the fact that the downturn in the economy is having a negative impact on mortgage holders and those in rented accommodation? Are they aware that the regulations relate to a previous era and need to be changed to accommodate the new circumstances? Will the Minister and her Department entertain that view?
I would be interested to hear exactly what changes Deputy Durkan anticipates. I know that more people are under pressure for their rent and mortgages than in the past, but it is important that the 5,000 people gaining the mortgage interest supplement receive it only to supplement the interest rather than the capital because these people will be left with a good capital asset. I am not sure whether Deputy Durkan is suggesting the supplement should go to paying off the capital as well as the interest but, as the Deputy knows, 63,000 people benefit from the rent supplement at a cost of €392 million while just over 5,000 people benefit from the mortgage interest supplement at a cost of €14.3 million this year.
If the Minister examines the figures, she will see there has been a very significant increase in the number of people seeking assistance with mortgage repayments. In the last two or three years it has increased by 35%. That is a fair measure of the increasing problems people are facing and the need, as Deputy Durkan said, to change the scheme to facilitate the reality of what is happening. The rule is that where one member of a couple is in employment, no assistance can be given. With the increase in low income couples in recent times due to low wage jobs, very many families are in a situation where one member of the couple is working but they are still not managing to make ends meet. The Society of St. Vincent de Paul and other groups have identified the working poor as an important phenomenon. In that regard, I ask the Minister if she would consider the rules in respect of people who are working being debarred from receiving any kind of assistance because that is unrealistic in this day and age.
This is the kernel of the problem. There is clearly a change in circumstances. What the Minister says relates to previous circumstances when interest rates were high. Interest rates are now low but the repayments are causing problems due to the high mortgages which were awarded by financial institutions in the past few years. Many of the people involved now find they must reach a settlement with their financial institution.
The response we get with regard to rent supplement and mortgage support is exactly what the Minister has just told us. Deputy Shortall and I are asking whether the Minister would consider the new circumstances in an effort to ascertain how best a means could be devised whereby hardship could be alleviated for the people concerned, whether it be through mortgage or rent supplement.
The fact the numbers have increased even within this year shows that the scheme is responding to the need out there. Between January and May of this year alone, more than 3,300 additional people received rent supplement and in the same period more than 900 additional people received mortgage supplement.
I know that. It is obviously directly related to the increase in the live register. However, it does show that those schemes are there for people to avail of and benefit from.
They are demand-led schemes. They are designed to be able to support people who fall on hard times with regard to the repayments. If the local welfare officers or others who are dealing directly with these people feel it needs to be tweaked in some way, we can certainly consider that.