Monday 22 October 2018

Tax cuts will cover the water charges - but failure to pay means penalties

Taoiseach Enda Kenny
Taoiseach Enda Kenny

Fionnan Sheahan and Niall O'Connor

Taoiseach Enda Kenny is planning to sell the new water charges package by pointing out the cost of bills will be covered by tax cuts for workers in Budget 2015.

But failure to pay bills will result in penalties and surcharges, with the unpaid bills being attached to homes.

The Government will finally announce the new water charges package, including two new maximum rates for the first four years.

The cap on charges will now be €60 for a one-adult household and €160 for all other households.

These capped figures take account of a €100 payment from the Government to all households who register with Irish Water.

So the bills from Irish Water will be €160 for a one-adult household and €260 for all other households, but the €100 payment will reduce the cost to the householder to €60 and €160.

The utility company will have to delete all the PPS numbers collected from nearly 900,000 households across the country.

The penalties for not paying water charges will still be relatively weak. The Government has ruled out cutting off supply or reducing water pressure for non-payers. Likewise, deduction of payment from wages, dole or pensions is now ruled out.

Instead, there will be penalties applied to unpaid bills and the total will be attached to homes. Similar to the property tax, the mounting bill will have to be paid if the homeowners want to sell their house.

The Government will also bring in legislation to prevent privatisation without the holding of a referendum. Any future government would have to hold a referendum to get approval for the privatisation of the public water supply.

The Government will claim the new lower level of water charges will be adequately covered by the tax cuts announced in the Budget, which will kick in next year.

"Capped water bills now mean everybody at work will be better off next year because of income tax cuts. A single worker on an average wage of €35,000 will get a tax cut of €400 - almost seven times the net water bill of €60. A married couple with two kids earning €55,000 and €50,000 respectively will be over €1,040 better off next year after paying the maximum net water charge of €160. A single person on the minimum wage will get a tax cut of €173, almost three times the maximum net water charge," a Government source said.

Families with meters will be able to bring their bill down more by conserving water.

Householders will have the option between paying the capped amount or the metered bill - whichever is lower.

Bills will still show the amount of water used and the cost per litre. A free allowance of 21,000 litres will be given for each child.

Therefore, families with children will have the best chance of reducing their metered bill.

The cost of a litre of water will also be reduced substantially.

Under the new plans, the Government is also postponing the start date for billing by three months - with the first bills arriving in April.

It had been planned to begin charging for water from last month, with the first bills arriving in January.

But now, the first bills will arrive in April instead, covering January, February and March.

Irish Independent

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