Mary Hanafin (Dún Laoghaire, Fianna Fail)

Go raibh maith agat, a Chathaoirligh. Tá an-áthas orm bheith anseo sa tSeanad ar maidin chun labhairt ar an ábhar seo.

In recent times we have all become conscious of the fact that many people are in need of guidance and assistance on financial matters. They include people who have been unfortunate enough to lose their jobs recently and who may have mortgages or rent to pay as well as difficulties in paying bills generally. They also include people who are still in employment but have been overstretched in credit and accounts and do not know where to turn. We have been fortunate in recent years to have the facility of the money advice and budgeting service throughout the country. MABS can offer advice, guidance and support in helping people to reorganise their finances sympathetically and confidentially. I recently visited some of the MABS centres to get an idea of the type of client availing of that service. Whereas traditionally it has been a social welfare client base, and that continues to be the majority, one now finds people using MABS who may not be dependent on social welfare but who have found themselves caught in the credit squeeze. Such people need particular support and advice.

MABS is the main Government-funded service, which provides assistance to people who are over-indebted and need help and advice in coping with their debt problems. The 1992 budget provided for a special allocation of €330,000 for the establishment of five MABS pilot projects throughout the country. Since then the number of MABS offices delivering money advice has grown to 52 and the annual allocation this year is €18 million. That is a substantial sum of money and we are fortunate to have it at a time when so many people require it.

A national company, MABS National Development Limited, was established in 2004 to support and develop the service. Some 246 staff are employed by MABS companies throughout the country. In addition to the staff's expertise, we also have management committees drawn from local voluntary and statutory services and community groups to run each local project. The commitment and expertise of all these voluntary groups, together with the time given and training received, constitutes a major contribution to social capital in this country. This wide-ranging voluntary activity involves people who understand the circumstances in which clients find themselves. The efforts of voluntary staff who are so willing to give of their time is greatly appreciated.

Local MABS operate as partnerships of all relevant agencies. They give advice and assistance but do not pay debts or provide any funds to clients. The credit union movement has been a key partner in MABS since its inception. I know Members of this House and others are strong supporters of the credit union movement which helps communities throughout the country. In this particular respect, their involvement and support is central to the development and success of the service. Other voluntary and statutory bodies, such as the Society of St. Vincent de Paul, the community welfare service, citizens information centres, centres for the unemployed and local authorities, work closely with the programme.

The MABS provides a high-quality personal service to the public and makes a significant difference to peoples lives. The key features of MABS may be summarised as follows: an emphasis on practical, budget-based measures to assist people with debt difficulties; an approach that targets families identified as having problems with debt and money-lending; a prominent role for local voluntary and statutory agencies, as I mentioned; the provision of education on budgeting and money management in the local community; and the sharing of experiences and information to combat moneylending.

When the late Deputy Séamus Brennan, our great colleague, was Minister, there was much talk about moneylending and he was particularly active in ensuring that new regulations were introduced to counteract the level of illegal moneylending in the country.

Last year 12,400 new clients approached MABS. Already this year, 12,400 new clients have been seen by MABS. That is an indication, not just of their own personal circumstances, but of the way the credit crunch is squeezing people and that with more people losing their jobs, unfortunately, they, too, are feeling particularly vulnerable. They are also people who know now that they have somewhere to turn. In addition, the MABS helpline launched in October 2007 has dealt with over 9,000 calls.

I was interested by the profile of some of the people concerned. In Thurles, only last week staff were telling me about the different types of groups, young and old, that were coming in to them. Equally, in Dún Laoghaire, those in my local MABS office spoke of the different profiles.

In one case a young woman of 23 came in with debts of €61,000. She did not have a house. She had nothing to show for the €61,000, but the bank continued to give her credit for holidays and for incidentals. She now finds herself in a situation with no way of repaying the debt. There was obviously some lack of responsibility, both in the lending and in the girl herself in overstretching, but at least she turned to MABS for help.

At the other end of the spectrum MABS is finding that young men in their 40s, who at the height of the Celtic tiger were the ones taking out big loans and investing, suddenly find that they are not able to meet their repayments. MABS was not established to support that type of person initially, but it is available to such persons and they are welcome. If such persons now find themselves in serious difficulty with financing, MABS might not solve their problem but can guide them on where to go and can help them. It might be a way of protecting, not just a young investor but, more particularly, the houses that he was going to build in social housing and the jobs that he was going to provide for young people and others in a community. MABS is broadening its remit within the guidelines for its operation, but it is welcoming a range of different people through its doors.

The issues that give rise to problems of over-indebtedness for people are highly complex. Research shows that lack of information about money management can be a contributory factor in many cases. A key function of the MABS, therefore, is to promote greater awareness about household budgeting.

For example, MABS and the Financial Regulator have developed an education programme on money management for transition year students, which I launched a couple of weeks ago. It is a useful project. It is allowing young people at a good age to be able to make the decisions about what they want and what they need, and asking them to focus on the real issues on which they should be spending their money and on what their priorities should be. It is done in a good, fun way. The programme includes good student packs and a good workbook diary that allows students to record each day what they spend their money on, whether it be on their mobile phone or on food, and helps them budget at a young age. This allows a long-term approach to be taken as well as the short-term one.

MABS is growing throughout the country. It is a service that is particularly welcomed by the many people who, unfortunately, find themselves having to avail of it.

The key message that needs to be put across is that MABS is there to help, to advise and to guide. It is there to support people who find themselves unemployed, caught in a credit squeeze or in financial difficulties. Rather than such people continuing to bear that problem alone, perhaps leading to other social problems for them, it is key that they would know that the service is there for them. We can see that in the numbers of people who are applying all of the time.

The individual debt for any one person might to some of us appear very small, but to them it can be considerable, and MABS can help them to overcome that. The average debt owed by new clients was €11,600, but by being able to sit down with people working with the creditors, they were able to see how the payments could be phased and how they can work through the credit union.

MABS is a tremendous service. I am delighted to see that it is in place to support people coming from a range of different backgrounds. The majority of clients continue to be those on social welfare payments, who make up 59%. The highest number of those are one-parent families, at 18%. Some 17% are in receipt of job-seeker's payments. Approximately 28% are in receipt of wages. Many of them have no second income coming in.

The profiles of people using the service are different. Many of them live in their own homes, many are in rented local authority accommodation, others are renting and some are even living with their parents.

It is a key message. I am delighted that the Seanad has taken the opportunity to discuss this issue so that we can advise people that, no matter what their circumstances or how difficult they find the current credit and financial situation, if it is impacting on them personally, the Money, Advice and Budgeting Service is there throughout the country to support them. I am delighted to be the Minister who is responsible for that.