COMMITTEE ON SOCIAL AND FAMILY AFFAIRS:THE GOVERNMENT should consider asking banks who avail of the State's recapitalisation scheme to allow mortgage holders to opt out of fixed-rate mortgages without being unfairly penalised, a Cabinet Minister has said.
Minister for Social and Family Affairs Mary Hanafin said yesterday the problems facing mortgage holders who were locked into a fixed rate was “undoubtedly an issue” and should be addressed.
“It’s something which should be considered as part of the recapitalisation programme and is something which has been discussed,” Ms Hanafin said.
However, the Department of Finance played down the possibility that a deal could be done for fixed-rate mortgage holders, adding that such a move would place banks at an unfair advantage.
A spokeswoman for the Minister said that it has been in contact with the Financial Regulator to investigate if banks are charging only the redemption fees for opting out of fixed-rate mortgages.
However, she did not say if the option of allowing people to get out of fixed-rate mortgages would form part of its discussions with banks which are being recapitalised.
The moves follow growing calls from Opposition parties to help thousands of fixed-rate mortgage holders who have been unable to benefit from the dramatic fall in interest rates.
Penalties for ending a fixed-rate mortgage can cost between €10,000 and €20,000 for typical mortgage holders. Ms Hanafin was speaking at the Joint Oireachtas Committee on Family and Social Affairs yesterday, where she outlined the priority issues facing her department.
She said the department was seeking to ensure benefits are paid in a timely and accurate manner. Ms Hanafin also said there has been a “huge” increase in the number of anonymous reports being made to the department over suspected social welfare fraud during the past year.
A total of 1,735 tip-offs had been received by the department by the end of April 2009, a 750 per cent increase over the same period last year when 232 reports had been received.
People have been encouraged to make complaints on the anonymous report line operated by the department’s Carrick-on-Shannon-based central control section.
The full number of complaints being made is not necessarily reflected in the figures, since others have been made directly to social welfare counter staff around the State.
A separate control measure introduced recently was a three-monthly certification process to validate the continued entitlement of foreign nationals to child benefit, Ms Hanafin said.
The Minister said this followed evidence that some non-Irish nationals were arriving in the country to claim benefits fraudulently. However, Fine Gael social affairs spokeswoman Olwyn Enright questioned whether this kind of control was sufficient to combat child benefit fraud, given the cheap cost of international travel.
