Irish News

Saturday 2 August 2014

Price rise fears as cost of water supply is really €500 per house

Paul Melia Environment Correspondent

Published 31/05/2014|02:30

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Environment Minister Phil Hogan introduced water charges; an expert group has said the charge may be higher than predicted
Environment Minister Phil Hogan introduced water charges; an expert group has said the charge may be higher than predicted

AN expert group established by the Government says the cost of providing water to every home in the country will run to €450-€500 a year, twice the so-called "average" charge.

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The estimate will spark fears that the charges, expected to average €240 per household, will rapidly increase over the coming years as families begin paying bills.

And pensioners living alone, single people, single-parent families and large householders are most at risk of so-called "water poverty", with as many as 164,000 people at risk of being unable to afford their bills.

The cost of assisting these low-income groups would be as much as €115m a year, the Economic and Social Research Institute (ESRI) says.

The 'Report of the Inter-departmental Working Group on Affordability Measures' outlines the options for addressing water poverty, which arises when between 3pc and 5pc of disposable household income, after tax, is spent on bills.

But the ESRI, which was paid €50,000 by the Department of the Environment to examine the issue of water poverty, said it was "questionable" as to whether a free allowance would help the least well-off.

"It should, of course, be noted that these allowances are not free," it said.

"Such allowances have to be funded by either other customers of Irish Water paying a higher tariff for water services or taxpayers in general whether current (via out of current tax revenues) or future (via borrowing which will have to be paid back eventually)."

The Government has announced a range of measures to address affordability issues, including a 'free' allowance of 30,000 litres of water per adult and couple and 38,000 litres per child, along with a €100 payment under the Household Benefits Package to families in distress.

The allowance will help reduce bills, and decrease the number of people at risk of water poverty.

People still unable to pay their bills can also request additional help under the exceptional needs payments scheme, administered by the Department of Social Protection.

The free allowance and other measures in place will only apply for the next two years. In 2016, the Commission for Energy Regulation (CER) will develop a new way of structuring water charges, which could include a drop in the allowance.

The report said that as many as 4pc of the population could be affected by water poverty, while those with certain medical conditions would also incur high bills. This includes 80 people on home dialysis, which can involve using 163,800 litres of water a year.

One option to help people was using the Household Benefits Package, a move resisted by Joan Burton's Department of Social Protection which said it was not targeted at those most in need, while the ESRI said it would result in a "high cost" for moving households out of water poverty.

Irish Independent

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