Seanad debates

Thursday, 9 October 2008

Money Advice and Budgeting Service: Statements

 

1:00 pm

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)

Ba mhaith liom mo bhuíochas a ghabháil leis an Seanadóirí a thug an méid sin tacaíocht do MABS agus a aithnigh cé chómh tábhachtach agus atá an seirbhís sna hamanta atá againn anois.

The increased numbers calling into MABS looking for advice is a sign of its success but it is also a sign of the difficult times for individuals and their families. As all Senators said, we are fortunate to have such a service, not just in terms of those who are employed in MABS but also those who voluntarily give of their time.

Some valuable points were raised by the Senators, all of whom expressed their support for MABS but raised other issues that are of use as well. Any of the 53 MABS companies throughout the country would say they would like some sort of an over-arching structure. We are working on that and hope to be in a position very shortly to be able to announce where that will be.

I fully appreciate what Senator Brady said about the co-ordination of services because in most towns one will find the MABS office and the citizens information office almost side by side, and sometimes in the same building, yet they are under different structures. Perhaps it is time to make sure we do not have duplication while at the same time ensuring we can give the service to people as well.

The Senator also raised questions about the value for money aspect. We constantly review the staffing levels, the contracts given to the companies and their future plans. Any director has huge responsibilities and therefore we ensure training is given to boards about their responsibilities as directors and as employers. Each of the boards is established as an independent legal partner, which brings responsibilities with it also, and it is important that people would be aware of that.

Senator McFadden spoke about trying to broaden the remit of MABS. That does not conflict with what Senator O'Malley said, that we should not broaden it too much, but if a business person comes in who is self-employed, MABS cannot help them with their business but they can help them with a personal debt they might have accrued as part of the business difficulties. The door is not closed on anybody, and the appropriate way to proceed is that they are able to advise them, even in regard to their personal difficulties, and recommend where they can go.

A number of Senators spoke about money lenders. In the past this was a very serious issue. I spoke recently with the financial regulators about this matter because it comes under their remit. There are 47 licensed money lenders in the country. The regulators and the banking sector have taken a strong view on this but a draft code of practice for money lenders was published in March 2008 and it comprises the elements of a consumer protection code for the money lending industry and other provisions to give protection to the consumer and promote responsible lending practices on the part of money lenders.

What often happens, as Senators said, is that people look for a small amount of money at a particular time but banks and other institutions do not give small amounts of money. MABS has a loan guarantee fund which means that if somebody who had built up a relationship with MABS is looking for that small amount, they can go to their credit union and access a loan of up to approximately €500, which is the amount people here spoke about for a First Holy Communion or the other life events and MABS can guarantee that loan from the loan guarantee fund. That is useful because a person can draw down the money and, even more useful, the person does not know that MABS has guaranteed the loan. It is not as if they can become reckless about it. They are still taking responsibility for it but they have that extra security. That is a very useful service for the small amounts we are talking about here.

Many useful comments were made about information, including negative information on the number of fliers people get in their letter-boxes asking them to take out a credit card. That is something we should examine. I do not know whether it comes under my remit in terms of finance. I had not focused on the number of fliers put through our letter-boxes that offer us credit cards. Equally, advertising the facility MABS offers is important. There has rightly been a huge reduction in the amount of advertising and campaigning we are doing and it might be useful for us to find another way.

I would suggest that Senators and public representatives have a key role to play in this area through constituency offices, people they meet, on local radio and in local newspapers. The best way of getting a message across is through the local radio stations and people taking the opportunity to go on their programmes to highlight this service. I am aware some of the radio stations are anxious to get some of the MABS staff on their programmes to discuss budgetary matters and managing finances. It would be in the best interests of vulnerable people if we, as public representatives, took it upon ourselves to promote the work they do.

Senator Boyle and other Senators asked how can the role of MABS be enhanced. That is something we are examining. The involvement of the credit unions and the Society of St. Vincent de Paul, as Senator O'Reilly mentioned, is a key aspect. They have been partners of MABS from the outset and are represented on all of the boards of management, therefore, people are getting that direct input from them.

Public education, the transition year programme and the money advice services available in local communities to give talks to different groups were mentioned. I am aware that they find that very useful.

Senator Bradford spoke also about encouraging children to save. He is right in saying there was a time when everybody put the few pence into the piggy bank but I realise people find it difficult to save. In terms of my own job, on the one hand we recognise how difficult it is for people to save but on the other, we are asking them to make provision for their pensions in the future. We need to change society's attitude to money. Too many people think they might as well spend it while they have it without providing for the future. I accept that those who have recently lost their jobs are encountering difficulties in this regard. We should not lose sight of the long term. At the end of the day, it affects each of us individually.

The wider impact of MABS in society was one of the other issues that was raised. Senators referred to the number of people being supported by MABS. As Senator McDonald said, it is interesting that many women, including lone parents, avail of the services of MABS. Most of those who contact the service are women. Many of them are very young and are on social welfare. Women tend to be responsible for the household budget. We should not be surprised.

The credit unions, which are key partners in this regard, also offer help to people with financial management difficulties. Advice is given to those who struggle with the management of their accounts and those who are unable to decide how much of each bill to pay off and what to do. A special credit union account can be set up for such people. If one is struggling, one can lodge one's money into a special account, from which one's money adviser pays one's utility bills. Significant assistance is available from various companies at 65 locations throughout the country. People can avail of a helpline and a one-to-one service. I can inform Senators who asked about the helpline that the officials who staff the helpline are able to give assistance and guidance to 90% of those who call it. The staff do not always advise callers to go somewhere else. In many cases, those who use the helpline need to be guided towards self-help. The helpline is useful in bridging the gap between the point at which the problem develops and the point at which a one-to-one appointment can be made.

I thank all Senators who took the time to contribute to this debate. I assure them I will take on board the points they made. The Government and the management of MABS are working with the Financial Regulator to ensure vulnerable people are not made even more vulnerable to moneylenders. Such people need to be assisted when they encounter difficulties. As public representatives, each of us needs to play a part in promoting the role of MABS to those who need the service most.

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