Katherine Zappone (Independent)

We oppose some of the proposed changes to entitlement to mortgage interest supplement. With this amendment it seems the Minister is introducing a new concept in social welfare law, namely, deferred need. As the law stands, if people have a mortgage and lose their job they can apply for assistance from the State to help pay their mortgage when they lose their job or when the need arises. They can apply for assistance when their circumstances change and the need first appears. However, with the Government amendment regarding mortgage interest supplement, a borrower must enter into an arrangement with their lender for 12 months before an application for mortgage interest supplement can be considered. As a practical person, I am trying to understand how this works and, for the purposes of clarity, I will use an example. I cite the case of a couple with a mortgage repayment of €1,600 per month who lose their jobs, or job as the case may be, and become dependent on social welfare. If they are to eat and pay their utility bills, the most they can offer the lender is about €160 per month. I base that figure on the amount a couple would be expected to pay towards their interest payments when in receipt of mortgage interest supplement. However, by definition, any person who is dependent on social welfare as a result of losing a job will have substantial arrears after a 12-month period. We must remember that forbearance, which is part of the moving into the mortgage arrears process, does not make a debt disappear, a creditor is simply extending the time before it enforces legal action. That is what forbearance is.

That brings me on to one of the conditions governing the award of a mortgage interest supplement. Under Statutory Instrument 412, the designated officer must consider if "it is reasonable to award a supplementary having regard to the amount of any arrears outstanding on the loan". That is what is done at that stage. Who will receive mortgage interest supplement after the 12 month period has passed, when will it be reasonable to provide assistance and when will assistance be denied? I understand the complexity of the problem and a policy response to the crisis has long been delayed, but I am not sure what this amendment to the mortgage interest supplement will achieve. Is it the intention to effectively abolish the scheme by making it impossible to qualify? The Minister is presuming that the lender will engage, which is an aspect we have debated frequently in terms of the other issues related to the mortgage crisis. A lender is unlikely to commit to anything in these circumstances. Those in a mortgage crisis, therefore, need to know what they are dealing with and the support, if any, they can expect from the State.

We oppose section 12 because we are convinced the mortgage interest supplement section should be deferred until such a time as the Minister can convincingly clarify who will qualify for mortgage interest supplement after the 12 month-period has elapsed. We may then be in a position to have an informed debate and understand what the Minister is proposing rather than a debate on a Bill the amendments to which, and particularly this one, were only received relatively recently.