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Opinion: 'In modern Ireland, you are invisible without money'

These lives matter as much as those whose accumulated wealth has been transferred to them through generations of social mobility, writes Audry Deane.

Audry Deane Author, Money Matters

HAVING WORKED IN the charity sector for over twenty years, I get to see up front and personally the chilling effect of poverty on people’s lives. I have witnessed the hardship, want, inequalities and brokenness, which corrodes life when there just isn’t enough money.

Unfortunately, there are many people in Ireland, living on the margins, whose needs do not appear to exercise the minds of politicians and policy makers. These are the people whose incomes, whether from work or supports, aren’t enough to keep them out of poverty.

In Ireland 16.5% of the population live in relative poverty, with 21% experiencing material deprivation, while 8.3% live both below the poverty line and experience deprivation and so are in consistent poverty. For those who are unemployed, not in work due to an illness or a disability or living in a household headed by a lone parent consistent poverty rates are three times higher.

The ‘Unbanked’

Hidden behind these percentages are people who struggle with an additional layer of disadvantage because they are ‘unbanked’. These people are financially excluded because they have problems accessing mainstream affordable financial products such as current and savings accounts, credit, savings and insurance.

They are excluded from basic everyday transactions such as bill pay, money transmission (direct debits, standing orders) and receiving lodgements. Unbanked people pay more, often an added charge on each financial transaction, which they make in person either in a post office or a bank.

Statistics from the CSO released in 2015, but sourced from the 2013 Household Finance and Consumption Survey, showed that 26% of unemployed people were credit constrained. Older research lists the groups who are financially excluded as the unemployed, lone parents, those on low incomes, people with disabilities, with low education qualifications and older people.

Strategy for financial inclusion

Despite years working in advocacy, I am perplexed at the government’s lack of interest in combating financial exclusion. While a Strategy for Financial Inclusion was launched in 2011 with the design and provision of standard bank accounts as its central plank, it took until September 2016, when an EU Directive on Payment Accounts was signed into Irish law, for discernible progress to be made.

Promotion of standard bank accounts has been lacklustre by banks. In contrast, the Credit Union sector designed a scheme, which has a high take up by its target audience.

The ‘It Makes Sense’ or Personal Micro Credit Scheme is available from 112 Credit Unions, in 240 locations. It offers loans at low interest rates (between €100 and €2,000) to people on social welfare payments and to workers in low paid jobs eligible for Family Income Supplement.

It uses the Household Budget Scheme to deduct repayments at source from social welfare payments at point of collection, in post offices. There are 6,000 active loans with an average loan amount of €590. A strong collective ethos is evident in this initiative and much positive feedback from users, providers and stakeholders. Borrowers report a sense of inclusion and respect.

So back to the government. Worryingly, Irish data on financial exclusion is out of date. There is no current data on unsecured debt. Responses to rising repossessions amongst homeowners include the ‘Abhaile’ scheme, Code of Conduct on Mortgage Arrears and the Mortgage Arrears Resolution Process.

This is in stark contrast to the indifference to the plight of financially excluded people.

National policy is not addressing their needs

While the lack of an adequate income is at the root of financial problems for many this can be exacerbated by a low levels of financial literacy. But financial education can be learned.

A collaboratively designed and delivered Financial Inclusion strategy would provide the skills and knowledge, which are the building blocks for better decision-makings, higher confidence and improved outcomes. The commitment to a new Financial Inclusion Strategy should be one part of the plan to address poverty and social exclusion currently being drafted by government, a key aim of which should be to ensure that everyone has an income for a decent life, whether in or out of work.

These lives matter as much as those whose accumulated wealth has been transferred to them through generations of social mobility. It’s time our leaders governed for all of us.

Audry Deane is the author of Money Matters: Addressing the Needs of People Living with Inadequate Incomes and Experiencing Financial Exclusion. The European Anti-Poverty Network commissioned the report, which will be launched today at special debate in Dublin hosted by The People’s Conversation, an initiative to support and encourage people to participate in shaping our collective future through action-oriented dialogue. The project is supported by The Wheel, the national association of charities, and the Carnegie UK Trust.

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Audry Deane  / Author, Money Matters

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