The Finance Minister has sent a "clear message" to the banks that mortgage applicants in receipt of the State's Covid-19 wage subsidy payment should not be blocked from drawing down their loans.
That's the view of Fine Gael TD Colm Burke following Finance Minister Paschal Donohoe's comments to the Dáil on the issue.
"There is no excuse in these cases for a bank refusing a mortgage drawdown where it is the employer availing of the subsidy, and the employee is still drawing full salary. There has to be an element of fair play here," Mr Burke said.
Mr Donohoe was questioned on the issue in the Dáil after the Irish Examiner revealed that some banks and local authorities are preventing prospective home buyers with mortgage approval from drawing down their loans because their employers have availed of the salary support scheme.
In each case, the person receiving the payment has not seen a reduction in salary.
But the couples are now at risk of losing substantial deposits or house purchases because of their banks' stance.
Mr Donohoe told the Dáil that while he can't get involved in individual loan decisions, in the cases of families, workers and businesses whose income has been reduced, it would be "appropriate" that "care be taken" to assess if they would be in a position to repay them in future.
But crucially, he said: "My view is that participation in the wage subsidy scheme should not be a reason for treating an applicant in a different way."
Mr Burke said this sends a clear message to banks that an element of fairness must be applied to those couples caught in this situation: "All of these people reached the bar set by the banks in terms of drawing down a mortgage.
"I can understand if there was a reduction of income and the banks looked for further assurances. But there is no reduction of income in these cases.
The banks can't start raising that bar again — they are just making it more difficult for people to get access to finance to complete the contacts.
"These people are getting full payment. It is their employer who has availed of the wage subsidy scheme yet the banks are making it almost impossible for them to proceed.
"There is no substantial change in income yet the banks are in some cases still insisting on new mortgage applications.
"In these cases, vendors have given an extension of time for purchases to be completed, builders have given an extension of time, yet the only ones not giving an extension of time appears to be the banks."
The Temporary Wage Subsidy Scheme was introduced by the Government along with the €350 Pandemic Unemployment Payment welfare scheme as part of a raft of emergency measures at the beginning of the pandemic to help preserve peoples' income and jobs.
While the €350 unemployment payment is paid to people who lost their jobs, the wage subsidy scheme helps companies pay the wages of workers, with the State generally covering up to 70% of the salary of affected employees earning below €76,000.
It is estimated that 53,900 employers have registered for the wage subsidy scheme, with just over 464,000 people in receipt of payments, which it's estimated have cost the State €936m.