Leo Varadkar: There is 'no cliff-edge coming' for people on payment breaks due to lost income

Leo Varadkar: There is 'no cliff-edge coming' for people on payment breaks due to lost income

Tánaiste Leo Varadkar said there would be no sudden cutt-off for those availing of the schemes. 

The Tánaiste has said that there is "no cliff-edge" for people who have payment breaks or interest-only arrangements with banks due to Covid-19, however, applications for breaks will end from September 30.

Leo Varadkar, along with finance minister Paschal Donohoe and public expenditure minister Michael McGrath, met with the CEOs of AIB, Bank of Ireland, Ulster Bank, KBC, and Permanent TSB along with lobby group the Banking Payments Federation of Ireland (BPFI) to discuss the issues facing people in light of the pandemic.

In a statement issued from the three ministers, it was confirmed that the scheme put in place by banks to deal with people and businesses who have suffered a loss of income related to the virus would end from this week.

However, Mr Varadkar said that this would not mean a sudden cut-off for those already availing of the schemes. He said that banks would assess claims for payment breaks or restructures on a "case by case basis".

He said: "The recession caused by the pandemic is like no other. Nobody is to blame for being unable to pay because their job is gone or business is closed. It’s in everyone’s interest that people and firms are given more time to get back on their feet. We want to make sure that Covid results in a lost year of economic activity, not a lost a decade and that means forbearance and loan restructuring where appropriate.

“The banks must continue to offer payment breaks to individuals and business that still need them.

“There is no cliff-edge coming on September 30. This is merely the last day on which people and firms can apply for a Covid-related payment break if they don’t have one already.” 

Minister Donohoe said that banks should "demonstrate a continued awareness of customers’ financial situations and to deal with cases in the most sensitive way possible". 

Minister McGrath said that payment breaks had been availed of by tens of thousands of customers and as they expired, borrowers should be able to extend them.

"As these payment breaks begin to expire, borrowers should have access to a full suite of measures to alleviate any difficulties they may still be facing including a further payment break where that is appropriate. It is critical that banks and the various non-bank entities find fair and sustainable solutions for borrowers in difficulty.

"The Government will be monitoring the situation very closely in the months ahead and will continue to engage with the financial institutions in the interests of customers and the wider economy."

CEO of the Irish Mortgage Holders Organisation David Hall said that the decision not to extend payment breaks is "shameful".

This is a shameful decision which will cause additional unnecessary harm to many households and shows banks' continued unhelpful approach.

Brian Hayes of the Banking and  Payments Federation Ireland said that traditional solutions offered by banks would still apply.

“While the deadline for applications for the blanket Covid-19 payment break is September 30, traditional payment breaks that have always been available to customers will continue to form part of the range of solutions available to customers."

More in this section

IE_180_logo
Price info

Subscribe to unlock unlimited digital access.
Cancel anytime.

Terms and conditions apply

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.