Charles Flanagan (Laois-Offaly, Fine Gael)
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Question 107: To ask the Minister for Social and Family Affairs her plans to amend the mortgage interest supplement scheme; if she will make revised guidelines publically available; and if she will make a statement on the matter. [34271/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The mortgage interest supplement scheme provides support for people who have difficulty meeting their mortgage repayments and whose means are insufficient to meet their needs. The scheme provides a short-term income safety net within the overall social welfare system, to ensure that people do not suffer hardship due to loss of employment. A supplement in respect of mortgage interest only may be paid to eligible people who are unable to meet their mortgage interest repayments in respect of a house which is their sole place of residence. There are currently over 14,100 people in receipt of mortgage interest supplement, an increase of 75%, or 6,000, over the number in payment at the end of 2008.

The assessment for the mortgage interest supplement scheme provides for a gradual withdrawal of payment as hours of employment or earnings increase. Those availing of part-time employment and-or training opportunities can continue to receive mortgage interest supplement subject to their satisfying the standard means assessment rules.

The review of the administration of the mortgage interest supplement scheme is progressing. The main purpose of the review is to consider how the mortgage interest supplement scheme can best meet its objective of catering for those who require assistance on a short-term basis, where they are unable to meet mortgage interest repayments on their sole place of residence. The review group includes representatives from this Department, the community welfare service, the Department of Finance, the Department of Environment, Heritage and Local Government and the Office of the Financial Regulator. The group is examining trends in programme and administrative costs, the impact of the Financial Regulator's statutory code of practice on mortgage arrears on the mortgage interest scheme, and legislative and operational issues that arise, including the cap on hours of employment. The review is also considering whether alternative approaches to achieving the scheme's objectives are warranted in the light of recent changes in the economic climate and the mortgage market. The full review should be complete in early 2010.

Following consultation with the community welfare service, guidelines on specific and immediate operational issues for the community welfare officers operating the scheme were updated recently. The guidelines are available on the Department's website, www.welfare.ie.http://www.welfare.ie/

Olwyn Enright (Laois-Offaly, Fine Gael)
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Will the Minister change the eligibility criteria as part of the review? If one person in a household is working more than 30 hours, he or she will not get mortgage interest supplement, regardless of how much money the household is bringing in. Does the Minister intend to make any changes to that? People are being penalised and being refused mortgage interest supplement on the basis that they should never have taken the loan out in the first place. That is placing full liability on the household who took out the loan, regardless of the fact that the banks should not have given them the loan in the first place, if it is to be considered as reckless lending. There is no responsibility being put on the banks for providing such a reckless loan, yet the person will suffer the repossession of their house because they are being refused mortgage interest supplement on that basis. Does the Minister intend to consider this and ensure it is fair?

There seems to be a difference in how the criteria have been interpreted around the country for mortgage interest supplement. Will that be changed?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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One of the criteria is to look at the time the person took out the mortgage, and whether he or she had an ability to repay it. That is reasonably valid, because the question could be asked as to whether he or she will be able to repay it. It must be asked if the State should continue to pay the mortgage interest for somebody who this time next year might never be able to attain that level of repayment.

Olwyn Enright (Laois-Offaly, Fine Gael)
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The Government is going to support the bank who gave the person that loan through NAMA, yet the person will not be supported in his or her own home. It is very difficult to explain that to somebody.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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It is difficult, but it is a legitimate question. One of the other questions is to ask whether the person is in a house that is greater than his or her needs. In other words, are there other ways in which he or she can get an income? Can a room be let out or can the house be shared? That is a valid question when supplementary welfare is being provided to somebody.

Olwyn Enright (Laois-Offaly, Fine Gael)
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The Minister surely cannot expect a family to let out a room.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I have had people in my own clinic who have done this. One man with a large house ran into difficulty, and it was suggested to him that the house was bigger than his needs. He told me he was looking to see if he could let out a room, because it is a tax free income. It would give him the same amount of money as he would get from the mortgage interest supplement.

Olwyn Enright (Laois-Offaly, Fine Gael)
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If he was paying tax, he would not have got it anyway.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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There is also a protocol that has attached to the financial institutions. No move is to be made on repossession for six months on people who are making a genuine effort to make repayments.

The issue that the Deputy raised regarding hours is being considered.

Róisín Shortall (Dublin North West, Labour)
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This situation is urgent. There are hundreds of people in negative equity and facing the prospect of losing their homes. The Minister promised reform by last Easter, but we have not yet seen it. As well as the areas that have already been identified by Deputy Enright that urgently need reform, such as the 30 hour rule and the means test, does the Minister accept that the Government needs to look at putting in place a much more creative scheme to enable people to stay in their own homes when they have financial difficulties? Is she prepared to look at a scheme where the State might take an equity share in people's homes if they can no longer afford to make the repayments? Does she accept that the priority must be to enable people to stay in their own homes as far as possible? If so, what steps is she taking to make that happen?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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It is a priority that people need to be supported to remain in their own homes. Mortgage interest supplement is only one way of doing that. The mortgage interest supplement will only apply to a relatively small number of people who find themselves in difficulty in repaying their mortgages. People might find themselves in that difficulty by virtue of lower incomes or having lost their job, or whatever. Therefore, it must be tackled in a number of different ways.

The mortgage interest supplement is meeting the needs of over 14,000 people today. There is evidence that perhaps 10% of those who apply do not qualify for it. That is the information we are getting back from CWOs. It is not as high as might have been indicated in different reports earlier this year.

Róisín Shortall (Dublin North West, Labour)
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The arbitrary rules preclude them from applying.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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There are other ways. Somebody may be in negative equity and a number of people are very upset-----

Olwyn Enright (Laois-Offaly, Fine Gael)
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Over 200,000 people are in negative equity.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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There is a number of people who are in negative equity, but that does not mean that they are not able to repay the mortgage. They are still repaying a mortgage which relates to the loan that they took out but unfortunately, the value of the house has declined and that would impact on them if they sold it. Where real support can be given to mortgage holders is with regard to the capitalisation of the banks, and with the agreements and protocols that have been made with them so that they will not move on people, but negotiate with them instead. There has also been a new housing Bill, with a new incremental house purchase scheme for people, which allows them to find a new, innovative way of buying houses. That has been initiated by the Department of the Environment, Heritage and Local Government.

Olwyn Enright (Laois-Offaly, Fine Gael)
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That does not help people in debt already.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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This issue is being dealt with. The mortgage interest supplement is just one small element. It is a valuable element of it, but what is just as important is the work that is going on with the Department of Finance and the Department and the Department of the Environment, Heritage and Local Government.

Róisín Shortall (Dublin North West, Labour)
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When is the Minister going to reform it?

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Yesterday's ESRI report suggested that another 35,000 people who will not be able to meet their mortgage repayment next year. Is the Minister calculating that into her deliberations on the numbers who will be dependent on the mortgage interest supplement?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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In so far as people need and qualify for the scheme, additional money will of course be made available. A total of €40.2 million was originally provided for this year, but we anticipate that the scheme will cost about €59 million.

Before I answer the next question, I would like to clarify for Deputy Reilly that the Office of Public Works has secured premises for the Department in Balbriggan and arrangements are being made to fit them out to the Department's needs.