Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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209. To ask the Minister for Social Protection if, given the Lough payments that have been discontinued due to the passage of the replacement scheme that has been put in place, there has been any study completed of the effects of same. [28645/15]

Joan Burton (Dublin West, Labour)
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A number of Money Advice and Budgeting Service (MABS) companies continue to facilitate their clients with a method of direct deductions from their social welfare payments for bill paying purposes, through historical arrangements put in place by Cork MABS and the Lough Credit Union (known as the Lough Payment Scheme), using the Household Budgeting facility operated by An Post.

As some of the creditors catered for by the Lough Payment Scheme fall outside those specified for the Household Budget facility, the local MABS companies involved are working with the remaining clients to explore alternative arrangements for paying their bills. Particular effort is being made to ensure that suitable alternative options are made available and that clients are fully supported through the transition to the alternative arrangement.

Separately, an initiative to develop a personal microcredit scheme in Ireland is currently under way. The work is being carried out under the auspices of Citizens Information Board and the Social Finance Foundation and involves extensive engagement with a number of stakeholders including this Department, the Department of Finance, the Central Bank of Ireland, the Irish League of Credit Unions, the Credit Union Associations, An Post, the Money Advice and Budgeting Service (MABS) and some non-governmental organisations.

A preliminary outline of the scheme envisages a personal microloan facility, operated by Credit Unions, providing small loan amounts (initial loan values circa €500), over an average term of 12 months, with a monthly interest rate of approx. 1%.

When the proposal is agreed with key stakeholders, an implementation plan will be developed with a view to piloting the initiative with a number of participating Credit Unions.

It is expected that up to thirty Credit Unions will participate in the pilot scheme, each offering twenty to fifty personal microcredit loans. The outcomes and learning from the pilot will inform the development of any final model prior to full roll-out.