Tuesday 22 August 2017

Special EU deal sought on €170m water bill refunds

Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem greets Irish Finance Minister Paschal Donohoe during a Eurozone finance ministers meeting in Brussels. REUTERS/Francois Lenoir
Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem greets Irish Finance Minister Paschal Donohoe during a Eurozone finance ministers meeting in Brussels. REUTERS/Francois Lenoir
Cormac McQuinn

Cormac McQuinn

The Government is set to seek a special deal with the European Commission to pay around €170m in refunds to people who paid water charges.

Officials are to make a bid for the refunds to be considered a "one-off" payment under European Union spending rules, according to a briefing prepared for new Finance Minister Paschal Donohoe.

Water charges have been all but abolished after the issue was thrashed out by a cross-party Dáil committee earlier this year.

During the Fine Gael leadership race, Taoiseach Leo Varadkar said water charges should be refunded to those who paid "as soon as possible", saying he wanted to see it happen "this year".

The cost of the refund would come in at around €170m, Mr Donohoe's officials said.

"In terms of the treatment under the fiscal rules, we will make the case to the Commission that this should be treated as 'one off'," the briefing added.

The document also said that the assumption made about Irish Water's domestic charges revenues was that it would take in around €130m this year.

They reported that the abolition of charges would reduce general Government revenue by €133m this year and this deficit would rise each year, to reach as much as €300m in 2021.

The officials note that this "could be partially offset by income from yet-to-be identified excessive use charges". The legislation to abolish water charges will not pass through the Dáil before the summer recess.

A Finance Department spokesman did not respond directly when asked if officials had been in contact with the European Commission in relation to water charge refunds yet.

The spokesman said: "Given the prevailing statutory situation, no assumptions have been made in relation to the budgetary impact of the abolition of water charges."

He said there were various "moving parts" that would be "considered as part of the overall fiscal arithmetic to be updated for Budget 2018 in October".

Irish Independent

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