Seanad debates

Wednesday, 6 November 2013

Social Welfare and Pensions Bill 2013: Committee Stage

 

6:45 pm

Photo of Thomas ByrneThomas Byrne (Fianna Fail) | Oireachtas source

The Minister effectively abolished the mortgage interest supplement last year. Did her initiative last year, which required people to have worked for one year with the bank, lead to a collapse in applications? I would certainly have expected them to have reduced, but I do not know. I can see the logic behind not giving hard-pressed taxpayers' money to the banks by removing mortgage interest supplement. There is logic in not giving such support to the banks. However, I cannot see the logic when the Government is not proposing anything instead. This is not part of some grand strategy to help people in mortgage arrears; it is simply a budgeting and accounting exercise. As I said at the outset, I accept there are cuts the Government must make and all we are asking is that they be as fair as possible. This cut is particularly unfair.

Last week when we met representatives of the troika, they said - I am sure they told the other groups, including Sinn Féin, Independents, and Labour Party and Fine Gael backbenchers who met them - they were very unhappy with the Government's progress in sorting out the problem of people in mortgage arrears. However, the Government line is always that it is doing a considerable amount, but what it has offered effectively is bankruptcy, personal insolvency and letters from banks informing people to sell their houses. That is what the answer has been instead of this. Had this section been part of some grand strategy where the balance of power was weighted in favour of the person in trouble, I would probably support it and say it was a reasonable proposition in the context of an overall strategy to help people in arrears. However, it is unreasonable to disconnect completely a support such as this, which is keeping people in their homes, particularly those on interest-only arrangements able to make repayments, without offering something else.

The result of the provisions in this section and other actions the Government is taking is that people are getting letters asking them to sell their houses. Last March the Government and the Central Bank announced targets for the banks to create sustainable solutions for mortgages. It turns out that a large percentage of those sustainable solutions are legal threats or letters asking people to sell their houses. The mortgage-to-rent scheme is non-existent. Split mortgages are available to some people but not available to others and absolutely no criteria are set out. It is wrong to make this change when not enough is being done for people who are in trouble.

While I do not have the exact wording before me, when the budget was announced I believe this was described as the winding down of the scheme over four years. The legislation does not specify that and merely states that the scheme will end and will not be payable after 1 January 2018. However, what does it mean for people currently in receipt of mortgage interest supplement? Will they be told they will no longer get it outside of the normal times when they might be told that?

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