Donohoe to ‘follow up’ on banks over mortgage loan issues

Finance Minister Paschal Donohoe has pledged to investigate if banks are withdrawing mortgage loan offers because workers are part paid by the state wage subsidy scheme.

Mr Donohoe also said he will look at whether changes are necessary for this scheme and the welfare pandemic payment and if it is "affordable" for the Government to extend them or not.

“So we are going to be looking at the future of both those programmes in the coming weeks.

“"What we will be looking to do is to change them in line with what is happening in our economy and with public health.

"You can appreciate that these are measures that are costing between €300m to €500m per week.

"And because of that, we need to get the balance right between them being affordable for our country overall, while of course appreciating they're making a massive difference to people who've either lost a job or are still in a job because of the wage subsidy scheme".

He will follow up on concerns that the main banks are withdrawing mortgage loan approvals if applicants have their pay in part subsidised by the wage subsidy scheme.

“That is a matter I will follow up on.”

Fine Gael TD Colm Burke has identified cases to the Irish Examiner where families have had loans for home building works or mortgages withdrawn by banks.

Mr Donohoe said the idea of the wage subsidy was that companies would remain viable.

The Government has rolled out a multi-billion euro package of assistance for employers and workers during the crisis.

Around 450,000 workers are receiving state payments through a temporary wage subsidy scheme, while around another 600,000 have applied for a special Covid-19 unemployment benefit.

Speaking to On the Record on Newstalk, he elaborated on €6.5bn in supports for businesses announced over the weekend, in response to the virus and lockdown.

These include a write-off of commercial rates of up to €10,000, a three-month freeze to pay taxes as well as a €2bn state investment fund and a €2bn loan scheme.

However, some of these supports are dependent on a government being formed so that legislation for the schemes successfully passes through the Dail and Seanad.

Mr Donohoe said yesterday that a new government and agreement on one would be needed at the end of June or early July, so measures could be approved by parliament.

"I know they are going to be needed soon.

"And even though we are not in position to implement them fully, because some laws have to be passed first, it's going to take us a number of weeks in any event to get the schemes up and running."

Separately, he ruled out the government intervening with commercial rent agreements. He said the government were not allowed do this, despite calls for intervention from SMEs.