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Government ignoring those on low incomes slipping into debt - Crowe

5 January, 2007


Sinn Féin Social and Family Affairs spokesperson Seán Crowe TD has said that the statement from the Money Advice and Budgeting Service (MABs) that a growing number of people in employment are seeking help with their debt problems highlights the worrying extent of personal debt in the state. Deputy Crowe said that it also underlined the reality that many people are surviving on inadequate incomes, have little or no savings and are therefore at high risk of falling into debt.

 

The Dublin South-West TD said: “We have record levels of personal indebtedness.  This was highlighted by the Central Bank in its Financial Stability Report 2006. This means we are storing up huge problems for the future. 

 

“The Government should be well aware of these problems and should be acting now to prevent them worsening in the time ahead. The EU Survey on Income and Living Conditions published in November 2006 found that in 2005, almost 40% of people in lone parent households reported having debt problems, along with 15.3% of people in ‘other households with children’ and 10.2% of households with ‘2 adults and 1-3 children’.

 

"Indebted households are particularly vulnerable to interest rates increases. Low income families which have no savings can fall into debt particularly easily because they don’t have any savings to enable them to cope with unexpected costs. MABs has pointed out that it is families on low incomes struggling to bring up children that most frequently get into financial difficulty. 

 

“A recent Combat Poverty Agency study entitled “Financial Exclusion in Ireland: An Exploratory Study and Policy Review” found that that improved access to financial services could help people on low incomes to avoid poverty by managing their money more effectively, accumulating savings and accessing affordable credit. Sinn Féin fully agrees with the conclusion of this report that credit unions and post offices have an important role to play in providing access to savings and affordable credit facilities in disadvantaged communities.

 

“Sinn Féin is proposing a number of measures aimed at tackling indebtedness amongst those with low incomes. We are calling for the introduction of a savings scheme for low income households, in the form suggested by the Society of St Vincent de Paul, the Money Advice and Budgeting Service (MABS) and the Combat Poverty Agency, because helping those on low income to save is an important measure to prevent such families falling into debt.

 

“We are calling for social welfare recipients to be provided with a once-off ‘Start-Up’ grant to enable them to open an account with a local financial institution. We are also calling for additional resources to be provided to MABs to enable it to deal with the increasing numbers of people who are seeking to avail of its services.”

 

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