Luke Flanagan (Roscommon-South Leitrim, Independent)
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139. To ask the Minister for Finance if the fostering care allowance should be excluded as income by lending institutions when calculating mortgage repayments (details supplied); his views on whether including such an allowance in mortgage repayments calculations is to put the welfare of fostered children in jeopardy; and if he will make a statement on the matter. [19774/13]

Michael Noonan (Limerick City, Fine Gael)
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At the initial application and award of credit stage, it will be a matter, having regard to consumer protection guidelines, for the borrower and the lender to satisfy themselves on the appropriate portion and source of income, including foster care allowances, available to meet mortgage repayments. In a situation of mortgage repayment difficulty, one of the recommendations of the Expert Group on Mortgage Arrears and Personal Debt was that “a standard financial statement (SFS) should be developed for use by all lenders and MABS, to assess a borrower’s financial position and to identify a best course of action” in respect of a borrower experiencing difficulty in meeting mortgage repayments. A standard format for the SFS was developed by the IBF and MABS and approved by the Central Bank in 2011 and all lenders are required to use this SFS when dealing with consumers under the Mortgage Arrears Resolution Process (MARP) as set out in the Code of Conduct on Mortgage Arrears. The SFS is a key component to the effectiveness of the MARP as it requires borrowers to objectively assess their incomings and outgoings, assets and liabilities and it also provides the lender with valuable information regarding the financial position of the borrower in mortgage arrears or pre arrears and will allow the lender to make its assessment of a possible alternative repayment arrangement based on the full financial circumstances of the cooperating borrower. If the borrower is dissatisfied with a proposed alternative repayment arrangement, the MARP appeals process will be available.

Outside of this bilateral framework, the Personal Insolvency Act provides for new statutory processes to deal with unsustainable mortgage and personal debt. In these processes, the rights and obligations of both debtors and creditors, in the context of any arrangement to address a position of insolvency, will be more formalised. However, in any such arrangement, the debtor will not be required to make payments at a level that would reduce his/her income below that necessary to maintain a reasonable standard of living. The Insolvency Service of Ireland has now published guidelines on what would constitute a reasonable standard of living for certain household types having regard to household composition and other relevant characteristics.