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AIB CEO DAVID Duffy has said that four per cent of its mortgage holders are choosing not to keep up payments and are in ‘strategic default’.
Duffy told an Oireachtas Finance Committee this afternoon that about 20 per cent of its total mortgage holders are in arrears. The bank estimates that 20 per cent of that number have disposable income to make payments but have made a decision not to do so.
The bank says that it comes to this figure by defining disposal income as any income 20 per cent above what the Insolvency Service of Ireland defines as required to meet reasonable living standards.
Sinn Féin’s Pearse Doherty questioned Duffy about whether this disposable income included making allowances for unforeseen costs associated with things such as third-level education for children.
Duffy responded by saying that, “If someone decides to pay something else, they’ve made a decision to not pay their mortgage”. He added that it is not part of the bank’s role to judge what else they have used their income on but only to recognise when it constitutes a strategic default.
Fianna Fáil finance spokesperson Michael McGrath also probed the chief executive on a similar issue. He enquired about what circumstances mortgage holders who have entered into a negotiated settlement with bank would qualify for a ‘debt break for a period of time’. He referenced cases of bereavement or medical emergency.
Duffy responded by saying that, “If you asking are we practical then the answer is yes.” Duffy added that such debt breaks are also provided not just in emergency but in cases where a mortgage holder has an investment opportunity and needs access to extra credit. He said that in such cases the bank would engage with the debtor to look at ‘practically what is affordable’.
Mortgage restructuring
In March, the six biggest financial lenders were told to “restructure” 20 per cent of their mortgage arrears book by July with a further target of 30 per cent by end of the third quarter of this year. In AIB’s case this translated to a requirement to restructure about 6,200 mortgages in arrears.
Much of the debate within the committee focused on whether AIB has met these targets.
Duffy claimed that the bank had made 12,500 offers for sustainable solutions to customers with mortgages in arrears so far this year. Of these offers 1,600 were offers for split mortgages. Duffy admitted that only 153 split mortgages had actually been successfully negotiated.
Deputy McGrath criticised Duffy for not giving the committee the figures in advance of the meeting. He said that the point of these meetings was to examine the banks progress in meeting targets and the fact that the figures are only being provided now made that task difficult:
“You’ve thrown a whole load of numbers at us which I’m glad you have but we should have had access to these numbers before the meeting.”
Doherty also criticised not only the manner in which the figures were given to the committee but also disagreed with AIB when it said that contact with mortgage defaulters constituted meeting its commitments, “A letter to a customer asking them to engage is not a long time solution,” he said.
He added that letters sent to debtors threatening legal action is not what was is required from the bank: “You can’t give these figures and say that you have reached targets.”
Duffy’s appearance is the beginning of a new module of the finance committee with the chief executives of Bank of Ireland, Ulster Bank and Permanent TSB before also scheduled to appear to answer questions about how they are dealing with Ireland’s mortgage crisis.
Figures released last month from the Central Bank showed that almost 13 per cent of mortgages in Ireland were over 90 days in arrears.
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Adequate desks and chairs to work at home are needed from employers. Also I find we are worked more and for longer at home than in the office! A lot more is expected of us at home I feel. It’s nice to have the option once or twice a week but not 5 days! It’s too much
@Jonnie Marre: Agree 100%. Also require support financially to meet additional heating/lighting/broadband expenses
@Jonnie Marre: we don’t want office workers returning. There is a greater chance of spreading the virus also back clogging up the streets and parking spaces. A lot of us can’t work from home so we have to travel into factories. You should count your blessings!
@Jonnie Marre: definitely one of two days a week is grand. Have to get back into offices though!
@Jonnie Marre: it go mad and buy your own like I did?
@Jonnie Marre: or go mad and buy your own like I did?
@Whoswho: really, will you put in a claim for fuel or transport money also? You’ll want food money aswell while your at it. Working from home is normally a personal request so fund it yourself!
@Whoswho: surely the lack of travel expenses would offset any heating or lighting costs. Agree decent broadband would need to be installed for business use.
Personal time management is key, you have to get very strict with turning off work laptop and phone on time so you aren’t continuously being dragged into work.
@Whoswho: are there not at least equal savings in expenses from not having to commute to work etc?
@Jonnie Marre: This is why it wont happen people will demand more money, ignoring the saving on travel and childcare of course..
Greed will kill this great idea before it begins, obviously it will work for some more than others but the choice should be given to employees..
Less cars on the road, less traffic jams, good for environment, its a win win,for those who it suits and those who dont have space or good internet fair enough keep trudging in as before….
@Whoswho: There are tax breaks for remote workers. Worth checking it out.
@MickN: It’s already happening across a lot of industries. Just because you haven’t experienced it you haven’t seen the shift. Most office jobs can been done remotely. No reason for staff to return especially with zoom or the likes of MS teams.
@Pete Crosbie: Employers want employees to WFH as it benefits them hugely financially! Employees should not have to pay for these expenses as a result of higher heating, electricity, broadband, setting up an office. Employers must pay this. There is a miserly tax credit of 3.20 per day currently
@Jonnie Marre: you need to talk to your manager about work life balance then – I haven’t experienced that at all
@Whoswho: It’s 3.20 if your employer pays you 3.20. Most employers don’t pay this so the employee doesn’t get this tax credit.
They can claim something back in tax the next year but it’s a fraction of the above.
Until businesses say oh great we can have all our staff working remotely- let’s start employing people abroad for less wages
@Greeneyes17: except if they did that they could end up having to paying corporation tax in the country those employees come from and those employees could end up paying tax in two countries.
@Sam Harms: yeah and?
Why do you think saaay apple outsourced some jobs to ireland? Some countries have a low corporation tax.
@Greeneyes17: sure they could have done that anyway
@Colm Malone: yes they outsourced to Ireland because of our low CT rate so why would Irish companies employ people from other countries with a higher CT rate? Also even if they did do it why would it be a bad thing, it would mean Irish people could move to other countries and still work for the same employer.
A survey has found that 80% of survey results are entirely fabricated.
@Diogenes Cat: 60% of the time ,survey results are fabricated every time
@Diogenes Cat: democracy IS a survey.
@Diogenes Cat: my own experience is that a lot of people want a couple of days a week. Nobody I have spoken to want to work 100% from home! It’s not nice!
@Joe: Not at all however large business don’t do nice. Large business just care about Profit and they are now trying to gain profits at the expense of the employee
@Diogenes Cat: Out of the four replies to my post at 10:55 75% didn’t get it.
most people I work with want to get back to the office. mainly because they dont have the facilities at home. I.e. lack of space, lack of broadband etc
@ed w: Employees should be supported financially if they are working from home. Employers should not be allowed to outsource their expenses to their employees.
@ed w: There’s going to be a grant for building studios/working space and the planning office is going to allow it… Bahahaahaa!
@Whoswho:
How do you propose they ‘not be allowed” to do that? Bring all the WFH folk back to the office, willing or unwilling?
Expenses have been more than balanced by savings for anybody with a half-decent commute.
@Michael Kavanagh: They should pay for employees additional utility bills as a result of asking them to WFH. I know of a large Irish financial company that is not allowing employees to return to work until 2021 at the earliest (they say for social distancing) however at the same time they are cancelling their lease on another building!! Beggars belief
@Whoswho: they should but talking to our head of EMEA the American company that bought us in April talks a lot about it but doesnt seem to believe it has any obligation to provide anything after a laptop.
I think it depends on the employee. I am enjoying working from home despite the stress of multi tasking and minding kids. My kids are happier and I’m not like a lunatic rushing and racing in the morning and evening. Going forward we hooped that between us we will no longer need afterschool, saving €500 a month if we can each get 2 days a week wfh. I find I’m getting as much work done. But I know colleagues who are younger or living alone are struggling with isolation and motivation and wfh does not suit them
@Bleurgh: is creativity and problem solving and collaboration of ideas suffering working from home?! I don’t know if it will work long term
@Caoimhín O’Cheallacháin: I actually find I’m documenting my creative solutions better as I don’t have the luxury of being able to slide over to people’s desks and fill in the gaps in a haphazard manner
Working from home is great till you look at the extra costs for utilities like electric, heating and stable broadband that the employee would have to cover….unless there would be tax breaks long term, in a lot of cases the novelty would soo wear off
@Michael Patrick Newell: Cost of bus, DART, petrol, coffee, lunch, etc vs storage heating already in use, broadband already paid for, tax breaks already in place, lower stress from not stuck in traffic or dealing with Karens at work. I can see why 9 in 10 would go for that.
@Michael Patrick Newell: there’s a tax relief called e-worker tax relief that you might be eligible to claim.
@Jennifer Murphy: The relief is tiny. Heating & Electricity bills in the Autumn/Winter will soar if your work from home. Employers must meet these expenses. Large employers are already saving massively from employees WFH, reduced rent, employees (security, cleaning, canteen), reduced insurance, utility bills. Employers must pay their employees expenses as a result of WFH
@Michael Patrick Newell: you can write off a percentage of your bills i.e. utilities at home broadband being a big one.
@Whoswho: I I don’t see why they should have to meet these expenses personally. They will likely have employees still working in their offices. A lot of savings are made WFH one of the biggest being commute and possibly childcare which far outweighs soaring bills (not necessarily soaring, I WFH and don’t have soaring at all since I changed from the office a few yrs ago). No commute also a huge benefit. You do need to be disciplined though.
@Whoswho: Not a lot of offices getting reduced rent…property management companies are not charities
@Lydia McLoughlin: They will be paying the employees who are WFH only. The employers will be meeting these costs from their business, like their previous rental and heating costs that they are saving
@Michael Patrick Newell:
How much extra power did home working cost anybody? – most people just had a laptop on and certainly there wasn’t much extra light needed unless you were on a home working night shift!
Kids and teens at home probably used the bulk of any extra broadband cost – which is hardly bank breaking.
@Michael Patrick Newell: You can indeed submit those expenses if you are working from home. I have been working from home for 6 years now but have given up trying to get tax back on that as they make it ridiculously difficult for the bit you get in the end. At last calculation the revenue acknowledged €3 approx per working day, of which you get a small percentage. The amount of paperwork you have to submit is unreal. My employer pays for my broadband – that is the biggest chunk anyway.
@Whoswho: unless they sell off or stop renting their office buildings altogether they will not be making any savings there. Building owners are not going to reduce the rents because offices are only staffed on certain days of the week. Only if all employees are working from home permanently will there be a difference in the rental costs etc.
@Kevin Lonergan: I know of large Irish financial companies already cancelling their leases and at the same time telling people not to return to work due to not being enough space!
@Michael Patrick Newell: There are tax breaks for remote workers.
@Whoswho: You may think you know about what companies are doing but you have very little knowledge about the costs involved/saved because of WFH which this article is about.
There are. You can claim back a portion of your bills related to working from home as a tax credit. Here’s a link from citizens information on it. Hope this helps.
https://www.citizensinformation.ie/en/employment/employment_rights_and_conditions/health_and_safety/working_at_home.html
Savings made on rent, services etc on office space can help towards gearing up work from home needs.
@DJ François: it’s a no brainer for all the societal problems we face, but eh, we’re Irish!
Working remotely works for some and not for others I imagine ,personally I think I would get nothing done anyway I don’t have that type of work that can be done from home but my children do and they are not up for it at least that’s my impression .
I wonder how training the next line of up and coming workers and that type of thing would work out ,how to cope with the whims and oddities of other people ,these are skills you learn as a group working together ,reading peoples faces and the likes .
I know myself sometimes I read a email and say to myself that is a bit short ass and then knowing who it came from I would know thats not so and sos attitude that type of thin and the likes
I for one would hate to work at home. No getting away from the job. Covid is an opportunity in my opinion to strengthen regional towns where you could possibly have clusters of employees working in smaller offices. It would in my opinion improve these small towns and bring some money back into the local economy instead of having every penny we spend go to large multinational companies.
This data is less relevant off a full 1,000 sample, it should only be based on workers, who work in an office usually…what is the point in construction workers, fishermen or surgeons answering this?
The maths does not add up. What answer option is missing? Is it 11 per cent want to work 5 days from home?
P
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