Money worries during Covid-19 and state support is a first time for many

By Lee Moroney

Covid-19 found over 1 million people reliant on state support. Some via the wage subsidy scheme (70-85% net wages) through their employer and some claiming the Pandemic Unemployment Benefit. Many were receiving state support for the first time.

Money worries are one of the biggest stresses people face in general but when you have lost your job suddenly, or found yourself on reduced wages it comes as a shock, and this can effect your mental health.

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Many people are facing money worries during the Covid-19 Pandemic

This week we reached out to the Money Advisory Budgeting Service, better known as MABS, for some practical advice.

Marie White is the Co-ordinator with Tallaght MABS, Marie has worked with Tallaght MABS for 25 years and has vast experience of working at all levels of the organisation. Marie took time out to talk to The Echo about the services that MABS provide.

What does MABS do?

MABS is a state funded organisation who offer free and confidential money advice to people experiencing problems with debt. We have experienced Money Advisers who work with clients who have difficulties with a wide range of personal debts including personal loans, mortgages, credit card debt, catalogue debts, debts to legal moneylenders and hire purchases.

What advice do you have for someone who never thought that they needed social welfare support (Pandemic unemployment payment) or find that they have reduced hours resulting in reduced wages?

The first piece of advice is stay calm. There are various supports available and it’s important to check that you are getting everything you may be entitled to, this is called maximising your income.

For example your hours or days have been reduced in work – you could be entitled to the Short Term Work Allowance which you can claim if you work 3 days or less (normally have worked 5 days).

Check out your entitlements with the local Citizens Information Centre or by visiting https://www.citizensinformation.ie/en/

Once you know how much income you are going to have, the next step is to draw up a budget and list down all your expenses. MABS have budgeting tools available on www.mabs.ie or you can call our helpline, who can assist you to draw up a budget. Tel: 076 107 2000

If someone who never had to worry about servicing loans or credit card now find it hard to meet payments - Will this affect them for future borrowing?

After the initial shock of dealing with a reduced income, many people will begin to worry about managing bills and debt repayments. Is is very important that you make contact with the companies that you owe money to especially mortgages or rents and utilities like electricity or gas. Many of these priority creditors have special arrangements in place for people affected by reduced income during Covid-19 and will be happy to help you.

Many banks and credit companies are also offering payment breaks so contacting creditors as early as possible can help to keep your situation under control.

In the longer term, not making repayments and not contacting your creditors, may affect your future borrowing. MABS can help you to make contact with your creditors so please call our helpline for assistance.

What would be your advice for someone who is currently not affected by the pandemic and wages have remained the same but considering a 3 month mortgage break?

Payment breaks have been introduced largely to assist people who have had a reduction in income. Avoid trying to take payment breaks if you have not experienced any change in situation as you may need the payment break at a later stage.

Payment breaks are only a temporary arrangement and the repayments that you don’t make during a break will be recalculated and spread over the remaining term of your loan.

This means that future payments will increase to take account of the break.

What advice have you got for a family with budgeting use of an overdraft to meet the weekly food shop and monthly bills?

Use of overdrafts and credit cards to meet food expenses or monthly bills is not advised. These forms of credit are amongst the most expensive borrowings. If you have to meet essential expenses by using credit, then this would suggest that there are issues with your budget.

It is important that you draw up a budget and prioritise your expenses. Housing costs first, then food and utilities next. Non-essential debt repayments should be bottom of the list when drafting your budget.

If your budget after essential expenses does not balance and you can’t reduce any outgoings by shopping around or changing providers, then you should speak to your creditors. It may be possible to reschedule your loans or make reduced payments. MABS can assist you to draw up a budget and to deal with your creditors

If someone needs extra help or support how can they get in touch with MABS?

Tallaght MABS are not open for face to face appointments but can be contacted on 076 107 2370.

Our telephone helpline is available on 076 107 2000 or log on to our website on www.mabs.ie

Its important to reach out and ask for help or advice if needed – this will help you put perspective on it and plan for the immediate future with your finances.

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