David Cullinane (Sinn Fein) | Oireachtas source

I cannot accept the Minister's response. I do not believe that those in the banks are the only people who will suffer if this support or supplement is abolished. There is no doubt that people who are struggling to pay their mortgages will also suffer. Senator Mooney referred to the FLAC submission made to all of us. I will quote from that report because it was a very good submission. The submission reminds all of us that the programme for Government for 2011 to 2016 referred to "Making greater use of Mortgage Interest Supplement to support families who cannot meet their mortgage payments, which is a better and cheaper option than paying rent supplement after a family loses their home". That makes sense. The submission went on to suggest that the proposal to close the scheme to new applicants from the beginning of January 2014 and to abolish it entirely by 2018 would remove what is an essential housing support which has been part of the safety net in our social welfare code for when people become ill or unemployed. The submission also suggested there is no evidence that banks are positively encouraging solutions that will keep people in their own homes. These are all points from the FLAC submission.

A recent Oireachtas committee hearing invited in the leaders of the main banks. I am referring to the pillar banks, Bank of Ireland and AIB, as well as Ulster Bank and Permanent TSB. What came into the public domain following that meeting was that the banks had sent out, between them, 14,721 repossession letters and 2,439 requests for voluntary surrender. So much for the banks helping people who are in mortgage distress. One of the most galling aspects of this and the banks' appearance before the committee was that they included sending out what many would see as threatening letters of repossession as solutions. This was the banks' solution.

As the Minister is aware, the Central Bank has set a target of 20% of offers to be made by banks to mortgage holders in arrears of over 90 days. The banks are suggesting that sending these letters, which seems to be happening in the vast majority of cases, represents a solution, but it is not a solution for most families. A number of families I dealt with, who are in arrears of approximately €5,000 at most, received letters from the bank suggesting the family should sell up. The only reason was because they were among the few who were not in negative equity. The bank took the view that it could force these people to sell up and then it would get its money back. There are also situations where people are in negative equity and the bank are asking them to sell up. This makes no sense because the bank will take a hit. The bank will take a hit anyway but if the person loses the home, the bank still takes a hit.

I have no wish to stray from the amendments because I realise we are dealing specifically with the mortgage interest supplement, but we cannot see it in isolation from the wider need for a real sustainable solution to help people who are in mortgage distress. Nothing the Minister said in her response - I mean this genuinely - has given me any hope that this will change. This is a short-sighted solution and my view is shared by FLAC and other organisations as well.

The Minister's response was unsatisfactory. It was disappointing for those who were genuinely hopeful that the Government would put in place better solutions rather than abolishing supports already in place. I do not see much hope of that following the Minister's response to our contributions.