Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 100: To ask the Minister for Social and Family Affairs if she has satisfied herself with the Government effort to assist people experiencing financial difficulties and struggling to cope with debt problems; and if she will make a statement on the matter. [34863/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Money Advice and Budgeting Service, MABS, is the main Government-funded service that assists people who are overly indebted and need help and advice in coping with debt problems. It is important for people coping with debt difficulties to take early action and approach MABS for help and guidance. This can be the first positive step for people as they address their debt difficulties. The role of money advisers is to help people to assess their financial situation, make budget plans and deal with creditors. MABS is dealing with increasingly complex debt situations in the cases of clients who are presenting with multiple creditors and debts. The 53 independent MABS companies, which have voluntary boards of management, operate local MABS services in 65 locations throughout the country. The MABS national telephone helpline is available from Monday to Friday between 9 a.m. and 8 p.m. The MABS website can be accessed 24 hours a day. In 2008, more than 16,600 new clients approached MABS for assistance with debt difficulties and the telephone helpline dealt with almost 11,000 callers.

In the first nine months of this year, 14,700 new clients were seen by MABS staff and the helpline received more than 18,000 calls. Funding of almost €18 million has been provided to MABS to deliver its services in 2009. An additional 19 staff are being recruited for MABS, which will bring the money advice staff to more than 270 in 65 locations. This will help local services to manage their increased caseloads. The capacity of the locall telephone helpline has been strengthened. The national support company, MABS NDL, has introduced a number of community education initiatives. One initiative involves a money management education programme, which informs people facing redundancy about managing on a reduced income and avoiding getting into debt. All MABS companies operate an appointment system for meeting clients. Clients with urgent difficulties are prioritised for attention and dealt with promptly. Less urgent cases are referred to the telephone helpline and the MABS website.

More than 90% of callers to the helpline find that their money management and budgeting issues can be resolved with the assistance of the helpline adviser. Some 10% of callers are referred to the local MABS for assistance. Other areas of debt are dealt with by community welfare officers, through the rent supplement and mortgage interest supplement schemes, with which we will deal later. MABS is the main State body that deals with people experiencing indebtedness. I am satisfied that it provides a high quality personal service.

Olwyn Enright (Laois-Offaly, Fine Gael)
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Just five of the 19 additional staff are full-time. How many additional full-time positions are there in the Money Advice and Budgeting Service? How many full-time positions do those 19 people hold? While it may be difficult, it is better to act before people get themselves into difficulties. Does the Minister have any plans to be more proactive in trying to assist people before they get into debt? I ask that question because 80% of Irish mortgage holders are on variable or tracker mortgages. It is expected that the European Central Bank will increase interest rates next year, or sometime after that. The number of people unable to pay their mortgages will increase at that point. We need to try to resolve that situation and assist those people at this point, rather than waiting for them to get into difficulties down the road. Does the Minister have any plans to regulate commercial debt advisers? She will have seen reports over recent weeks about companies that have been set up in this sector. It seems that people saw a vacuum in the market and moved in. Like MABS, I have many concerns about the lack of regulation of this sector. People are having to make significant down-payments to some of these companies. I am aware of cases in which the first month's payment went to the company, rather than being used to pay a utility bill or some other bill. I have concerns about such practices. It would be better to regulate this area now so that we do not have to address greater problems in a year's time.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I understand that 12 full-time posts have been divided up among 19 full-time and part-time workers, although I stand to be corrected. The Deputy suggested that people should be given advice in advance, which can be done in several ways. I recently launched a programme under the Money Advice and Budgeting Service's community education programme, which is very successful at giving information to people at a young age. MABS, in conjunction with the Financial Regulator, has devised a useful document in support of the transition year programme on money management and priorities within money. The MABS programme for working with Travellers will help such people from running into debt. The Deputy specifically asked about mortgages. I understand from the Financial Regulator that when one is selling a financial product, such as a pension or a mortgage, one has to advise people that its value is likely to decrease as well as increase. People have to be given that information.

Olwyn Enright (Laois-Offaly, Fine Gael)
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The banks gave people questionable advice in recent years. People will find themselves in difficulties as a result of reckless lending.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I do not question the Deputy's opinions on what has happened. She is right to mention that people were advised to take out 100% mortgages, for example. The Financial Regulator obliges financial institutions to give certain advice. There has been an increase in the number of debt collection groups, many of which have written to me to offer assistance with our work. I am aware of a serious and unfortunate case in which a number of people received letters, purporting to come from MABS, claiming they could receive support and help. It was frightening and disconcerting for people. Any organisation engaged in financial business is required to adhere to certain guidelines. I will investigate whether the Department of Finance or the Financial Regulator need to do anything else to regulate the companies mentioned by Deputy Enright.

Olwyn Enright (Laois-Offaly, Fine Gael)
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I urge the Minister to do that immediately. People will encounter difficulties down the line. It is wrong that people's payments for an entire month are going to these companies, rather than towards the repayment of the debts that got them into trouble in the first place. The huge waiting lists for MABS - of up to three months in some areas - are causing people to get into bigger difficulties. Is the Minister satisfied that the 12 full-time posts are sufficient? Can she comment on the Comptroller and Auditor General's report on the number of cases being dealt with by MABS personnel each week? The report seems to contradict my experience, which is based on my conversations with the staff of MABS. I respect the work done by the Comptroller and Auditor General in his report, which is generally fairly correct. I would like to hear the Minister's views on these matters.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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There are two issues. At a time when there is an embargo on recruitment, we were lucky to secure 12 positions. We have divided them among the MABS offices with the greatest increase in demand. I was also a little taken aback by the comments of the Comptroller and Auditor General on the number of cases being dealt with by MABS. I have witnessed the work that is being done. The Comptroller and Auditor General did not take account of the huge increase in the number of people who are dealt with on the telephone. Some 18,000 people, the vast majority of whom had straightforward issues that could be dealt with over the telephone, have called MABS so far this year. More complex cases need to be dealt with differently. The staff of MABS on the ground are genuinely trying to prioritise those with the greatest need. If someone is in a particularly difficult situation with priority loans, rather than secondary loans or debts, he or she will be dealt with immediately. MABS also has ongoing money management clients from year to year. I have suggested that there may be a way of putting such people at arm's length, perhaps by meeting them fortnightly rather than weekly, to ensure that the new catchment of people who are coming in can be dealt with.