Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 110: To ask the Minister for Social and Family Affairs the steps he will take to fulfil the commitment in the Agreed Programme for Government where the Money Advice and Budgeting Service will be given a central role in increasing access to affordable credit for low income earners and social welfare customers; and if he will make a statement on the matter. [26175/07]

Martin Cullen (Waterford, Fianna Fail)
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The Money Advice and Budgeting Service (MABS) provides assistance to people who are over-indebted and need help and advice in coping with debt problems. There are 53 independent companies nationwide with over 230 money advice staff operating the service. Last year, MABS provided services to almost 12,500 new clients throughout the country. To date, in 2007, some 9,300 new clients have approached the service. The number of active cases at the end of September was 18,500. In 2006, €16.4 million was provided to fund the service and in 2007 the annual allocation was increased to €17.67 million to assist the MABS in dealing with its workload.

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 encounter in managing their finances. I am particularly concerned about the high level of interest rates currently being charged by some financial institutions, loan companies and by legal moneylenders in situations where people have no alternative sources of credit available to them.

The issues in this policy area are complex. For example, the regulation of money lending comes under the Consumer Credit Act 1995 and the Financial Regulator has statutory responsibility for the licensing process. My view is that MABS has a unique and expert contribution to make, on behalf of people on low incomes, in shaping the strategies that need to be put in place, including those of services providers, such as the banks and the credit unions, to ensure greater financial inclusion in Ireland.

Officials of my Department have had discussions with the Department of Finance on these matters. They also continue to engage with the Financial Regulator and other key interests on the options for tackling the barriers which arise for people on low incomes accessing the full range of mainstream financial services that is available to the wider community.

In line with the Programme for Government, I am developing proposals for a new structure for the MABS geared to meeting the needs of people with debt difficulties in today's society. These proposals will include initiatives to improve the situation of people on low incomes in securing access to affordable credit.

My proposals will build on the best features of the MABS model of service to the public to ensure a high quality, coordinated budgeting and advice service to meet the challenges posed by the changing face of debt in Ireland.