Many vulnerable, elderly people will be left with no life cover when a credit union scraps its death benefit insurance next month.
Gurranabraher Credit Union may be the first in Ireland to stop the scheme, providing €4,000 to fund end of life expenses to members, paid for by all adult members via a €30 annual fee.
New Central Bank regulations require credit unions to get 50% of members to sign up to the scheme, or abolish it. Only 36% of the Cork credit union’s members signed up, so it is due to end on December 30.
Sinn Féin councillor Thomas Gould said that many members were unaware of the new rules and are now “distraught” that the benefit is ending.
Cllr Gould said: “It’s having serious ramifications on families. The worry it’s causing people is terrible. People are distraught, especially the elderly.
“From December 31, 3,500 people will be left with no cover. Many of these people are elderly or retired, they’ve paid into the scheme for 40 or 50 years and they cannot now afford to take out new insurance.
“It’s a brilliant initiative. A lot of elderly people used it as their life insurance policy.
“I’ve asked the Credit Union to extend the deadline by two weeks. They did extend it once but there wasn’t enough publicity about it so people didn’t know.
“Many people don’t open letters from the credit union, thinking they’re about car loans or advertising. So sending a letter or two asking people to sign up to something is not enough. There needs to be a public awareness campaign. A lot of members are really upset.
“The Central Bank is over regulating. It let the banks and financial institutions get away with murder before and now it puts barriers in the way when there’s an initiative which actually helps people. It’s a crazy decision and it has national implications for all credit unions.”
A spokesperson for the Irish League of Credit Unions said that the scheme did not fall under central control and that decisions on it would be taken at a local level.
Gurranabraher Credit Union was contacted for comment but had not replied at the time of publication.