Getting Help With Mortgage Payments if You Are Unemployed

There has been a lot of talk in recent weeks about people in Ireland struggling to pay mortgages – especially those who have lost their jobs.
It seems that many people are not aware of the extra help they can get with paying their mortgage if they are out of work . There appears  be a  failure of  the welfare system in Ireland to make people aware of what they can claim.
There are  currently  around  19000 households in Ireland who are receiving  Mortgage Interest Supplement .  This is a very small proportion of the total 782,429 residential mortgages .

The Unemployment rate in Ireland is around 14% –  but it is hard to find out how many mortgage payers are unemployed . Even if we assume a rate of just 7% – that would mean there could be about 54000 unemployed mortgage payers .
In comparison – there were 60,000 mortgages that were more than 3 months in arrears at the end of June 2011.

Mortgage Interest Supplement – is a payment that mortgage payers can claim for if they are unemployed or on low income.
There are some criteria you have to pass in order to qualify – but the basic rules are that after paying your mortgage interest – your remaining income should be no more than  €24 a week  below the Supplementary Welfare Allowance .

You can be working (under 29 hours a week) and still be eligible.

The amount of capital repayments are not covered by Mortgage Interest Supplement – it only takes into account INTEREST payments.
If you are on an Interest Only Mortgage – then all the repayments will be made up of Interest.  Not many homeowners will be on Interest Only Mortgage. The most common mortgage is a Repayment Mortgage – where the monthly repayments are made up of a combination of Interest and Capital.
It is easier to explain with an example:

A Couple with 2 Children – both parents unemployed.
Income from – Jobseekers allowance :  €372.40 per week
Child Benefit / Allowance  of  €280 a month or  €64.62

Mortgage : €200,000 taken out in 2008 – current rate is 5%
Monthly Repayments are currently €1157 – which is made up of  €710 Interest and   €447 capital .
The interest portion of the mortgage works out at  €164 per week.

If the couple were paying this  €164 interest out of their Jobseekers Allowance – it would leave them with a weekly income of just  €208.4.
(Child Benefit is disregarded)
So – they should be entitled to mortgage interest supplement of  €140 a week – which would leave them with €24 to contribute towards the mortgage interest.

Of course  – it still leaves them with the problem of the €447 a month capital (€103.15 a week)  which still has to be paid out of their weekly income of   €437.

The system for claiming mortgage interest supplement appears to be overcomplicated – and it is operated  by the Community Welfare Services division of the Health Service Executive.
Applications for Mortgage Interest Supplement have to be made to the Community Welfare Officer at your local health centre.

The department of Social Protection don’t have anything to do with the assessment – and it is easy to see how many people just don’t realise thay can claim it.
There also seems to be a lot of discretion involved in the assessment – for example a person can be refused Mortgage Interest Supplement  if   “The amount of the mortgage interest payable by the claimant does not exceed such amount as the Health Service Executive considers reasonable to meet his or her residential and other needs.”

Also  – to qualify for help with the mortgage –  the mortgage must have been taken out at a time when, in the opinion of the Health Service Executive, the person was in a position to meet the repayments.

BUT – In exceptional circumstances, the Health Service Executive may award a supplement where the amount of mortgage interest payable by a person exceeds such amount as the Health Service Executive considers reasonable to meet his or her residential and other needs. Such supplement is payable for a maximum of 12 months from the date of the claim.

Other rules for eligibility are:
From 18 June 2012 new applicants for MIS must show that they have availed of an alternative payment arrangement with their lender for at least 12 months under the Mortgage Arrears Resolution Process
“It is reasonable to award a supplement having regard to the amount of any arrears outstanding on the loan.”
So – it could be that someone who has left it a few months before applying for help – will be refused because the arrears are too big!

Housing Agency – Respond  –  estimates that over 1,000 individuals a month are being refused  mortgage interest  supplement but the actual numbers and reasons are unclear.

The Department of Social Protection doesn’t appear to have any  figures on refusals and  the HSE’s community welfare officers – who administer the supplement – do not record the number of rejections .

Our advice is – if you are unemployed or working less than 29 hours a week and struggling to pay your mortgage – then apply for Mortgage Interest Supplement at your local Health Centre.