Personal Debt, Poverty and Public Policy in Ireland. The Impact of the Money Advice and Budgeting Service on Over-indebtedness among those in Poverty

This is a study of the long-term impact of the Irish Government’s main policy response to over-indebtedness among those in poverty, namely the Money Advice and Budgeting Service (MABS). The main objectives of MABS are to enable people to cope with their immediate debt problems and become financially independent in the long term and to this end, MABS works closely with the Irish credit union movement. There has been no academic evaluation of the impact of MABS services on both over-indebtedness andpoverty. Nor is much known about whether those in poverty are more likely to experience debt problems, whether their problems are different from those of others, and what causes them. The present study has two main objectives. Firstly, to identify the relationship between over-indebtedness and poverty in Ireland; secondly, to examine the effectiveness of public policy in this area by evaluating the long-term impact of MABS. It uses two existing datasets to address the first research objective, namely a series of annual poverty surveys (the Living in Ireland Surveys 1994-2001) and administrative data gathered by MABS on its service clients. To fulfil the second research objective, and to gather information on the causes and consequences of over-indebtedness, new data was sought by way of an interview survey of a sample of MABS clients. The conclusions are threefold. Firstly, that there is a strong relationship between over-indebtedness and poverty in Ireland and that people in poverty experience different and more severe debt problems than others. Secondly, debt problems are triggered predominantly by things that happen to people rather than things that are done by people. Thirdly, although MABS has a significant and highly valued impact in helping people cope with debt problems, the model itself is primarily a residual or conservative one that helps poorer people to manage their debts and their poverty, but not to become financially independent in the long term. A more strategic, multi-dimensional approach is therefore required, particularly in the light of worsening debt problems as a consequence of the current economic downturn.

Name dc:type.qualificationname

phd

Level dc:type.qualificationlevel

doctoral

Grantor dc:publisher.institution

National University of Ireland Maynooth

Year dc:date.issued

2009

Author dc:creator

• Stamp, Stuart

Language dc:language

en