The new poor - Way out for families in debt

Far from enjoying an extravagant lifestyle, double income families can now often be numbered among the new poor, such is the economic reality in the Ireland of today.

Many families with incomes ranging up to €40,000 are caught in a financial trap that has them applying for help in such numbers that it can, unfortunately, be considered a growth area.

Despite the Celtic Tiger economy, or possibly because of it, household incomes too often do not match the crippling burden of bills that has to be met every month.

With the average house mortgage running at about €1,000 a month, many households, especially young couples, need two incomes to pay for it, along with the other everyday expenses.

Financing the cost of a new house can often necessitate the cost of a second car for the second job and child minding services which often can be as much as a mortgage.

Consequently, it is not remarkable that the Money Advice and Budgets Service (MABS) is experiencing a considerable increase in the number of people seeking help, especially from middle income homes.

The extent to which economic hardship has broadened, despite better wages and salaries, can be gauged from the fact that MABS was set up 13 years ago primarily to help those on social welfare and to counteract the curse of illegal moneylenders.

It was, and still is, financed by the Department of Social and Family Affairs and now supports 50 centres all over the country.

At that stage, over 90% of people they helped were on social welfare. The profile has changed dramatically. Now, 34% of new clients come from middle income homes on what would normally be considered good wages.

In fact, the number of people MABS helps is increasing steadily at the rate of 20% annually and the number of people in severe financial difficulty who will approach the service this year will be about 15,000, as well as the 30,000 people they deal with on an ongoing basis.

A very pertinent point has been made by the head of the Combat Poverty Agency, Helen Johnston, which is that household income is no longer a poverty indicator.

It is illogical to point to statistics showing that few people in employment are at risk of poverty, when the income from that employment does not, or cannot, support the outgoings of the family or household.

Too many of those expenses are beyond the control of people.

In can be a vicious circle under ordinary circumstances, but becomes unbearable if unemployment or serious illness intervenes.

Comparatively easy access to credit, especially credit cards, may ease that burden in the short term, but ultimately may just compound it.

Social Affairs Minister Seamus Brennan recently described MABS as "a beacon of light" for many, which is an exceptionally apt description for a service which can save thousands of people from the despair of overwhelming debts.