Thu. Sep 21st, 2023
    The Government Considers Help for Mortgage Holders Squeezed by Rising Rates

    The Irish government is considering potential assistance for individuals affected by the continuous increase in mortgage rates. However, it is unlikely that universal interest relief for all mortgage holders will be implemented. Instead, officials are exploring the possibility of reintroducing a scheme similar to the mortgage interest supplement.

    The mortgage interest supplement was a social welfare benefit provided by the Department of Social Protection until 2017. It offered short-term support to eligible individuals who were struggling to meet their mortgage interest repayments. Before its discontinuation, the benefit only applied to those who had adhered to an alternative payment arrangement with their lender for a cumulative period of at least 12 months.

    While over 12,000 borrowers received assistance through the supplement in its final year, the government is hesitant to implement a broad relief scheme that could potentially benefit individuals who do not require it. The cost of such a universal scheme is also a concern.

    Discussions within the government are focusing on developing a proposal that would discourage dependence on the benefit. Officials criticized the previous scheme, suggesting that it disincentivized individuals from seeking employment or working additional hours due to the potential loss of the supplement.

    No final decisions have been made regarding the new scheme, and further negotiations between politicians and officials will take place prior to the budget announcement on October 10th. Taoiseach Leo Varadkar expressed his support for assisting mortgage holders paying the highest rates or at risk of losing their homes. He indicated that the details are currently being worked out by Minister for Finance Michael McGrath and Minister for Social Protection Heather Humphreys. This suggests that any forthcoming measures are likely to be means-tested social welfare benefits rather than general tax measures.

    In addition, Varadkar mentioned the government’s consideration of postponing scheduled increases in excise rates on fuel if petrol prices exceed €2 per litre.

    Sources: [Not provided]