Wages, welfare to be hit in debt recovery plans
Utilities and small firms to use attachment orders to get paid
Utility companies and small businesses will be entitled to seek attachment orders against the wages and welfare payments of customers who owe them money, under the Government's sweeping new debt proposals.
The measures agreed by Cabinet last night are aimed at ensuring nobody is sent to prison over the failure to settle a personal debt.
Instead, creditors will be given the option of seeking redress through the form of attachment orders against wages and welfare payments. Courts will be given the powers to deduct outstanding sums where previously they would have handed down a prison sentence.
The measures can be availed of by businesses and public utilities who are chasing customers over personal debt, such as electricity and gas bills.
But it will not apply to secured debt, meaning banks will be prevented from using it as a means of pursuing customers in mortgage arrears.
The Government's measures, will also apply to householders who fail to pay water charges.
Irish Water will be allowed apply for attachment orders in cases where customers refuse to engage. The Government insists a differentiation will be made between those who 'can't pay' and those who 'won't pay'.
The water plans also include thresholds to ensure those on lower social welfare payments are not pushed into poverty.
Government sources described these as "poverty protections", saying there is an absolute desire to ensure that those families who cannot pay are at the forefront of considerations.
Underpinning the Coalition's strategy is the introduction of a "deterrent" for people considering refusing making payments to Irish Water. Government sources insist the prospect of being landed with an attachment order will push many individuals into settling their bills.
"Attachment orders will ensure the money is paid while damaging an individual's credit rating for the future," said a senior Government source.
Measures being introduced by Environment Minister Alan Kelly will also prevent householders who refuse to pay their bills from selling their homes.
If a property is sold, the sale will still go through but the proceeds won't be given to the seller until the water bill is settled.
However, the measures are also significant for tenancy agreements. Despite protests from landlord organisations, landlords will effectively be required to act as debt collectors on behalf of Irish Water.
All new tenancy agreements will contain an obligation for the occupier to pay the bill.
There will be further requirement for a landlord to retain a tenant deposit until the tenant provides evidence they have paid water charges.
This is temporary until the Private Residential Tenancies Board takes over deposit protection.