THE NUMBER of households receiving emergency welfare support to help them meet mortgage repayments has increased by more than 250 per cent over the past two years.
New figures compiled by the Department of Social and Family Affairs show that almost 14,740 people are getting the mortgage interest relief supplement. This compares with 8,000 recipients at the end of 2008, and 4,000 at the end of 2007.
The dramatic increase in the number who cannot afford to meet their monthly mortgage repayments illustrates the scale of the financial problems affecting homeowners.
The Government is likely to have spent about €55 million on the supplement during 2009, or almost twice what it spent the previous year.
Under the scheme, households receive an average of €365 every month to help them cover part of their repayments. The mortgage interest relief supplement is designed to be a short-term payment to cover the interest portion of the home loan.
In a further sign of how the downturn is affecting households, the number of people in receipt of rent supplement – a short-term welfare payment for those who cannot afford rent – has risen to in excess of 90,000, an increase of more than 50 per cent since the end of 2007.
The sharp rise will put further pressure on the public finances, with the cost of rent allowance forecast to have reached in excess of €450 million by the end of last year. Figures published earlier last year showed between 1,000 and 2,000 people per month were applying for the mortgage interest supplement. However, significant numbers have been turned down due to the strict eligibility criteria.
Anyone seeking the payment is mean-tested and required to show they negotiated to reschedule mortgage payments with their lender.
Eligibility is assessed by community welfare officers, who are attached to the Health Service Executive. Groups such as Free Legal Aid say the rules are too strict and many households who desperately need the support are not able to get it.
Department of Social and Family Affairs officials are reviewing the mortgage interest relief supplement to see how it “can best meet its objective of catering for those who require assistance on a short-term basis, where they are unable to meet mortgage interest repayments on their sole place of residence”.
The review is also considering whether alternative approaches are warranted in the light of recent changes in the economic climate and the mortgage market.
Pressures on the public finances forced Minister for Finance Brian Lenihan to limit access to mortgage interest relief in last April’s supplementary budget. As a result, it was targeted at those who bought homes at the peak of the housing market.
