Written answers

Thursday, 14 December 2006

Department of Social and Family Affairs

Debt Levels

7:00 pm

Photo of Jack WallJack Wall (Kildare South, Labour)
Link to this: Individually | In context

Question 7: To ask the Minister for Social and Family Affairs when he expects to receive the research commissioned by the Financial Regulator and the Combat Poverty Agency on the nature and extent of debt incurred by low income families; and if he will make a statement on the matter. [43124/06]

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

Question 40: To ask the Minister for Social and Family Affairs when he will introduce legislation to put MABS on a statutory footing; and if he will make a statement on the matter. [43292/06]

Gay Mitchell (Dublin South Central, Fine Gael)
Link to this: Individually | In context

Question 83: To ask the Minister for Social and Family Affairs his views on the recently published MABS statistics regarding borrowing by low income families; and if he will make a statement on the matter. [43291/06]

Photo of Ruairi QuinnRuairi Quinn (Dublin South East, Labour)
Link to this: Individually | In context

Question 89: To ask the Minister for Social and Family Affairs the latest support he has given to the Money Advice and Budgeting Service in view of the concerns expressed by the organisation that they are being swamped with requests for advice; his views on the increasing levels of personal debt among families here; his further views on whether the structures and organisation of MABS require reform to cope with these new circumstances; and if he will make a statement on the matter. [43133/06]

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
Link to this: Individually | In context

Question 96: To ask the Minister for Social and Family Affairs if he has had discussions or plans to have discussions with representatives of the credit union movement with a possible view to providing additional credit options for low income families; and if he will make a statement on the matter. [43125/06]

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
Link to this: Individually | In context

Question 114: To ask the Minister for Social and Family Affairs when the promised new legislation to place the Money Advice and Budgeting Service on a statutory basis will be published; the principal areas in which it will differ from the Bill published in 2002; and if he will make a statement on the matter. [43126/06]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 7, 40, 83, 89, 96 and 114 together.

The Money Advice and Budgeting Service (MABS) provides assistance to people who are overindebted and need help and advice in coping with debt problems. There are 52 independent companies nation-wide operating the service. The credit union movement has been a key partner in MABS since its inception and 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.

In 2006, €16.4 million was provided to fund the service representing an increase of 20% on the previous year. In 2007, I have further increased the annual allocation to €17.64 million. Last year, almost 27,000 people availed of the service as compared with 18,000 in 2001. The growth in demand for the service can be attributed to the increase in the availability of credit generally in the economy and to the quality of the service provided by the MABS advisers. The issues that give rise to problems of over-indebtedness for people are highly complex. The cost and availability of credit for people on low incomes and the barriers they face in accessing mainstream and cheap forms of credit add to the difficulties people on low incomes encounter in managing their finances.

I have held discussions with a number of interests including the Irish League of Credit Unions and the Financial Regulator about these issues. One outcome of these consultations is that research has been initiated by the Financial Regulator with the help of the Combat Poverty Agency to find out more about the nature and the extent of financial exclusion in Ireland and the barriers faced by people on low incomes in accessing a wide range of financial services. The report entitled 'Financial Exclusion in Ireland — An Exploratory Study and Policy Review' was launched by the Financial Regulator on Monday 11th December. The report is being considered by my Department at present.

The findings of the research, together with the comprehensive statistical data now emerging from the new MABSIS information system will make a significant contribution to our knowledge about the problems of debt in Ireland and the situations that leave people on low incomes vulnerable to high cost credit services. I plan to bring proposals to the Government shortly to establish the Money Advice and Budgeting Service board on a statutory basis while retaining the voluntary input so vital to MABS. My proposals for legislation will build on the best features of the MABS model of service to the public. The proposals will combine a continuation of local voluntary involvement with strong national leadership. This will ensure a high quality and coordinated budgeting and advice service for the future, in particular for people on low incomes.

The proposals for the new legislation will take account of the significant developments which have taken place in MABS since the previous Bill was published in 2002. They will be informed by the outcome of consultations with a range of individuals and groups as well as the expert views of key MABS interests including money advisers, MABS voluntary boards of management and other stakeholders such as the credit union movement and the Financial Regulator.

The proposals will take account of best practice in corporate governance for a customer focussed service that provides value for money for the taxpayers investment and meets the challenges posed by the rapidly changing face of debt in 21st century Ireland.

I have asked my officials, in drawing up the legislation, to seek legal advice to determine if provisions can be included that address the issue of what appears to be the unacceptably high level of interest rates currently being charged by financial institutions and loan companies.

The MABS is highly regarded and respected and it is my intention that this continue to be the case. I believe the support structure put in place by my Department for the MABS in recent years has worked well for clients of the service, for local management and for the staff. The legislation I will be bringing forward will further underpin the service.

Comments

No comments

Log in or join to post a public comment.