Shock of the new poor

Charities such as St Vincent de Paul are seeing a sharp increase in requests for help from people unfamiliar with financial worries, who last year would have been contributors to their campaigns, writes Alison Healy

DARREN MAUGHAN never thought he would be asking the Society of St Vincent de Paul for help. In fact, the 34-year-old construction worker would have thrown money into their collection buckets on previous occasions. Now he is getting food vouchers from the charity in Athlone to help make ends meet.

He has been working for 15 years as a labourer and dumper driver, but was laid off in October.

"I've no experience of this," he says. "The most time between jobs would have been two weeks, four max, but you always knew you would get work. To go from that to this is honestly so depressing. I'm barely living. Every day you wake up to the same story."

He has lost count of the number of recruitment agencies he's tried without success.

"I come highly recommended. I've good references. I work hard. I don't miss days of work or leave early. But still there's nothing happening," he says.

He is receiving his jobseeker's benefit but is still waiting for his rent allowance.

"I've applied for the third time," he says. "I know I'm entitled to it, but they keep coming back looking for different things. It's diabolical, the excuses they are giving me."

Maughan is separated from his partner, but he sees his children regularly. The children - a nine-year-old son and a four-year-old daughter who has disabilities - have their Christmas wish-lists and he doesn't know what he can do for them.

"It's the small, little things that get you, like when you're asked for €1 to buy sweets in the shop and you don't have it," he says.

He contacts St Vincent de Paul once a fortnight and is grateful for the food vouchers but finds it embarrassing to need them.

"That wouldn't have been my lifestyle," he says. "I always worked and provided for my family, paying my bills and rent on time. Now I'm reduced to relying on charity. It's awful degrading. In fact, it's depressing. I can't sleep at night thinking about it."

Siptu organiser Pat McCabe says workers like Maughan, who are engaged by agencies, are the most vulnerable in this downturn. "The contractor will say there's too many agency workers on the site, and they are let go. There's no security."

McCabe believes the Government should set up a programme to upskill construction workers who have lost jobs and says it should also think twice about shelving major infrastructural programmes that could keep people in employment.

MAUGHAN IS ONLY one of thousands of workers who have been plunged into a financial crisis for the first time and are struggling to cope. About one quarter of the calls now received by St Vincent de Paul are from people who have never contacted the charity before, according to its vice- president, John Monaghan. They are looking for help with day-to-day expenses, such as food and fuel costs and ESB bills.

"I have no doubt we are going to see a huge increase in the number of people coming to us for the first time - people who made donations to us before," Monaghan says. And where the society could help with mortgage payments in the past, the level of debt encountered by volunteers today is "astronomical".

To compound the problems, there are delays of up to 12 weeks in processing applications for jobseeker's benefit in some parts of Dublin, according to Monaghan. He worries that the society will not be able to cope with the demand. As it launched its annual appeal for donations last week, it emerged that some conferences of the society were already running out of funds.

He fears that the recent spate of job losses are only the tip of the iceberg and predicts that the numbers signing on the live register will increase dramatically after Christmas.

The effect of the recession on home repossessions will also start to be felt in earnest next year. Many of the cases currently going through the courts involve people who got into difficulty before the downturn. The High Court chancery summons list is full of cases taken by subprime lenders, but one financial services source says the names of the main banking institutions will soon appear on these lists as lenders default on loans.

But the cases may never come to court if people voluntarily surrender their homes, according to the source. He knows of 16 cases of voluntary surrender, and only one involved a subprime lender. He believes that this will happen more and that it will go unnoticed because of the trend for people to remain in their homes and rent them back from the bank.

"We haven't seen anything yet," he says. "This is going to be the first middle-class recession we've had."

The Money Advice and Budgeting Service (Mabs) has already noticed a change in the socio- economic status of its clients.

"The majority of people are still on social welfare or with low incomes," says spokesman Michael Culloty. "But we are also dealing with people with small business loans, credit-card debt, car loans, store-card debt and overdrafts."

Mabs, which provides advice for people in debt, has seen a 30 per cent increase in its number of clients this year. It has also received more than 10,000 calls to its helpline (1890-283438) this year. The helpline, which was introduced in September 2007, saw a steep increase in the number of calls from May onwards.

Bank loans are the main cause of debt for these new clients, followed by utility bills and credit-card bills. At the Bray Mabs office, coordinator Deirdre Rice has noticed more builders' labourers seeking help.

"They would have always had money," she says. "They would have been used to having money, but now they have mortgages to repay and are finding it difficult because they are out of work."

She has also noticed people who have quietly lost their jobs without the media focus that goes with large company lay-offs.

"There are hairdressers and restaurant workers who have been let go and haven't a voice because they are not part of a big group," she says. "We see people with two credit cards who can't make repayments."

She adds that people get a serious shock when they get letters threatening to cut off the electricity or gas because the money is not in the account to meet the direct debit.

"Car repossessions also carry a huge stigma," she says. "You have a car or a jeep sitting in the drive, and suddenly it's gone."

MANY OF THE callers to St Vincent de Paul's Dublin offices are worried about coping with pre-Christmas expenses, according to Dublin president Rose McGowan.

"We have a significant number of parents looking for help to buy toys. Nobody wants to let the children down. Children don't understand a recession and they shouldn't have to," she says.

The society can help with small items, such as dolls, jigsaws and colouring books, "but not the bicycles and Xboxes".

Some firms have donated toys, products and confectionery, and the charity would also like to get vouchers for music or clothes shops for teenagers.

"I know that people think it should be about providing food, but teenagers are children too and you don't want an old head on young shoulders," says McGowan.

Darren Maughan is still hopeful that he will be able to help out Santa this year.

"I'm down to Fás every day of the week. They are sick of seeing my face. When I was down getting the unemployment benefit I told them I would do anything. I'd stack shelves," he says. "I'm trying my best to be strong and stay focused, but it's very hard when you have nothing."

Stretched to the limit: Six recent cases at St Vincent de Paul

• The father of three college-age sons has recently been declared bankrupt. The gas has been cut off and the family does not have the necessary €200 to have it reconnected.

• A father with several young children lost his job a few months ago. The gas had already been cut off (due to non-payment of a bill) when the ESB rang to say that the family's electricity was also about to be cut off. St Vincent de Paul intervened on behalf of the family to stop the electricity being cut off, and also managed to get the gas reconnected.

• The mother of a 12-year-old boy has electricity and gas bills of about €180 each and cannot afford to pay them. Her main concern is that her son could find out that she called St Vincent de Paul for help, as she is trying to protect him from the anxiety of their financial situation.

• A single man working full-time has three credit cards and is paying so much towards these that he cannot afford to pay his rent and is in danger of losing his home.

• A self-employed single woman in her early 30s, who earned €50,000 in 2007, made just €11,000 this year. Her home is worth less than her mortgage, and all her savings have been used up on day-to-day expenses.

• A young construction worker lost his job a few months ago and is in arrears with his rent. He is unable to go back to the family home as his father is an abusive alcoholic. His landlord has refused to sign his application form for rent supplement and he is in danger of being evicted from his accommodation.