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Mica redress

Defective Concrete Block scheme regulations should be ready 'in the next couple of weeks'

Minister Michael McGrath says he will engage further on the role banks and insurance companies should play.

THE REGULATIONS FOR the Defective Concrete Block scheme should be up and running “in the next number of weeks”, according to Finance Minister Michael McGrath. 

The Mica redress scheme, which is designed to help homeowners whose houses were damaged by the presence of mica in their concrete blocks, stands at €2.7 billion.

A new 10% levy on concrete blocks, pouring concrete and other products, will help fund the Mica redress scheme, and is expected to raise €80 million annually.

Concerns have been raised about delays in recent months, with questions now being posed about the role insurance companies and banks will play going forward. 

Speaking in the Dáil today, McGrath confirmed that the regulations are now being finalised and are expected to be in place in the next number of weeks when the new scheme “will finally be in place and up and running”. 

Regarding the issue of costs and the price cap, the minister said the Society of Chartered Surveyors has provided an update on rebuilding costs for 2023 for Donegal and Mayo.

The cost to rebuild eight house types are shown to have increased of by 13% to 15% since their first cost report in February 2022. Building costs for 2023 for Clare and Limerick, received on 18 April are currently under consideration with the expert group, said the minister. 

McGrath said he believes insurance companies and banks have a role to play in the scheme. Independent TD Thomas Pringle said concerns have been raised about the bank’s mortgage terms and conditions, which make the repair of homes potentially an automatic default event.

“Mortgage providers are standing outside the remediation issue, taking all the benefits without any of the pain,” he said. 

McGrath said he will meet with the homeowners group on the banking and insurance issues.

“I recognise the reality that taxpayers’ money here is being used to essentially repair or reconstruct an asset, which is the security for loans that the banks hold. And equally it is the taxpayers rather than insurance companies who will be funding the costs involved here,” he said.

McGrath said the Banking Federation of Ireland have been in correspondence with the Mica action group and have indicated willingness to meet and enter into a process of structured dialogue.

“So I welcome that. I think that is important… I’ll do whatever I possibly can to support the homeowners in relation to those banking and insurance related issues,” he added. 

Taoiseach Leo Varadkar has said by this time next year he wants to see hundreds of homes in Donegal being repaired or being demolished and rebuilt.

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