Pat Deering (Carlow-Kilkenny, Fine Gael)
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I thank the Ceann Comhairle for selecting this issue and the Minister of State with responsibility for housing for his attendance. It is an important issue.

Unfortunately, one of the legacy issues of the Celtic tiger economy is the many people in mortgage distress and mortgage arrears. Recent figures show that 38,000 are in mortgage arrears for two years or more, a very difficult situation for them. The priority of Government policy, with which everybody agrees, has been to keep people in their own homes in so far as possible. That is important.

I welcome the changes made in recent weeks to the mortgage-to-rent scheme which is one of the best methods of ensuring people can remain in their homes when they get into mortgage difficulties. The changes announced, including the flexibility provided for and the increase in the valuation, have been helpful in that regard. However, there are still anomalies in the system. I can offer the example of a case brought to my office recently, although there are a number of cases that must addressed in this context. The individual concerned, Jason, has a wife and two children. He borrowed in excess of €300,000 to buy a house that is now worth €150,000. It is an ordinary, three bedroom semi-detached house. He ticks almost all of the boxes in respect of eligibility for the mortgage-to-rent scheme. He owns the house and the valuation is under €180,000. The one box he does not tick is that he does not qualify for social housing. Previously, he had a job that guaranteed an income of €60,000 per year. Unfortunately, like many others, he lost his job, but, unlike some, he had the get up and go to find another job, although it only gives him an income of €35,000 per year. The cut-off point for eligibility for the mortgage-to-rent scheme and social housing qualification in County Carlow is €27,500 for a man, his wife and two children. Therefore, he does not qualify for the mortgage-to-rent scheme. It is the only box he does not tick. There must be flexibility on an individual basis in this regard. He believes that if he were to give up his job, stay at home and become a burden on the State, he would qualify for the scheme and thereby let it look after him. He was prepared to try to get his life going again, but he is not in a position to pay his mortgage, although he is in a position to stay in his home, if possible. If he loses his house in the morning which is an unfortunate possibility for him, he will have to rent private accommodation. It is impossible to rent a property in the Carlow region for less than €700 per month and he would not be in a position to pay that amount.

I urge the Minister to examine the mortgage-to-rent scheme again. There are anomalies in the system that must be addressed. This is one that could be addressed on an individual basis. I am not asking the Minister to open the doors completely for social housing qualification, but where somebody is in mortgage difficulty and qualifies in every other regard for the mortgage-to-rent scheme other than in this respect, it should be reviewed.

Paudie Coffey (Waterford, Fine Gael)
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I thank the Deputy for raising this important issue. There are two mortgage-to-rent schemes in operation through my Department. There is a scheme whereby a local authority can acquire ownership of properties with unsustainable local authority mortgages, thus enabling the household to remain in their home as a social housing tenant. The other scheme provides for an approved housing body, AHB, to acquire ownership of a property with an unsustainable private mortgage, which also enables the household to remain in their home as a social housing tenant. It is the latter scheme to which the Deputy is referring. This scheme is designed to assist families with income difficulties whose mortgages are unsustainable and where there is little or no prospect of a significant change in circumstances in the foreseeable future.

To be eligible for the AHB mortgage-to-rent scheme, a household must have had their mortgage position deemed unsustainable under the mortgage arrears resolution process, agree to the voluntary surrender of their home, be in negative equity anddeemed eligible for social housing in accordance with section 20 of the Housing (Miscellaneous Provisions) Act, 2009. In that context, income thresholds that are applied to be eligible for the scheme are the income thresholds for social housing generally. It is important to remember that the income thresholds for social housing which can be up to €35,000 per year for a household with a single adult are based on net household income after taxes and social insurance payments. In addition, there are further allowances for each child. These amounts are in line with the general housing needs assessment guidelines applicable to all social housing tenants to be deemed eligible for social housing and are considered reasonable in respect of the income bracket targeted by the scheme.

While we are making progress with it, it has been acknowledged that take-up of this scheme overall has been slow. In that context, the Government recently announced changes to the mortgage-to-rent scheme as part of a broader package of measures to deal with mortgage arrears. The changes being made will make the scheme more flexible and accessible and are designed to enable more properties to qualify for the scheme. The key measure proposed in this package is that the valuation threshold for properties will be increased in line with the acquisition thresholds for social housing generally. These new measures are due to be in place by end of this month.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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The Minister of State makes the same points I made in my initial contribution. I very much welcome the changes to the scheme announced a few weeks ago, particularly with regard to the valuation. They have been helpful.

The Minister of State referred to the financial eligibility criteria. In the case I outlined the individual in question would be better off staying at home on the dole, as he would qualify for the scheme. He is barely over the threshold, which is €27,500 in the area in which he lives. He has a wife and two children and they live in a three bedroom house. The sum of €27,500 is a hard and fast figure and there is no flexibility in that regard in the area in which he lives. He has no choice and I am sure he is not alone in this situation. There must be flexibility on the figure of €27,500, or whatever the figure might be for any other individual, depending on the area involved. The most simple solution is for this man to be able to stay in his home, look after his children and pay what he can to a voluntary housing body or the local authority, as the case may be. It would be far cheaper for the State if he could do this rather than have him give up work, stay at home and qualify in that way. I ask that section 20 of the housing Act be reviewed to take account of the issues I have outlined where the mortgage is unsustainable, as it is in this and other cases, in order to qualify for social housing.

Paudie Coffey (Waterford, Fine Gael)
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The operation of the scheme is closely monitored on an ongoing basis by the Department and the Housing Agency which are also in regular contact with approved housing bodies and financial institutions. To date, a total of 2,865 cases have been submitted under the approved housing bodies mortgage-to-rent scheme. Of these, 2,036 were deemed ineligible or terminated during the process. Of the remaining 829 cases submitted, 97 have been completed. In a further 44 the sale could not be agreed. A total of 115 are with the lenders, with the remaining 573 being actively progressed.

There has been an increase in the number of cases being progressed through the scheme in recent months. The new protocol endeavours to ensure certainty is provided as early as possible in the process to minimise uncertainty and late withdrawals from the scheme. In addition, the recently announced package of measures will bring more flexibility to the scheme and enable more properties to qualify. In that context, I expect approximately 250 mortgage-to-rent transactions to be completed this year.

I am keeping the scheme under review. This will give me an opportunity to address some of the Deputy's concerns and give them due consideration.