Irish Government Approves Proposals On Debt Enforcement And Reaction

On Wednesday May 6th 2015 the Irish Government approved a Civil Debt Bill to abolish imprisonment of debtors & implement recommendations of 2010 Law Reform Commission report.  This includes Environment Legislation to strengthen regulatory regime around the payment of water charges.  The legislative stage could take up to 6 months before this bill goes to Dail for approval.

 

 

 Original Release

Original Release

The Government has today approved a joint proposal from the Minister for Justice and Equality, Ms. Frances Fitzgerald, T.D., for the drafting of the Civil Debt (Procedures) Bill, and from the Minister for Environment, Community& Local Government, Alan Kelly, T.D., for the introduction new measures for water compliance.


The proposed measures distinguish between those who can’t pay and those who won’t pay, and in the case of the latter, lay out a clear path for the recovery of civil debt, including unpaid water charges. Importantly, in line with recommendations from the Law Reform Commission, the legislation will abolish imprisonment for non payment of debt for the vast majority of debtors.


Civil Debt Procedures Bill
The proposals will implement a number of recommendations of the Law Reform Commission (LRC) in relation to the enforcement of debt. The Law Reform Commission Report published in 2010 on Personal Debt Management and Debt Enforcement made a number of recommendations for wide scale reform of the existing personal insolvency and debt enforcement regimes. Key elements of that Report were implemented through enactment of the Personal Insolvency Act 2012. The new Bill seeks to implement further recommendations of the Report aimed at enforcement and recovery of debts which could be developed to streamline the existing enforcement procedures.

Under the proposed Civil Debt (Procedures) Bill, creditors may apply to the Court for an order enabling either attachment of earnings or deductions from social welfare payments, as appropriate, for the purpose of enforcement of debt. These provisions would be subject to a number of safeguards. The Bill will also make provision to provide for the abolition of imprisonment of debtors except in the case of maintenance arising from family law proceedings.

Minister Fitzgerald said: “There is a need for a balanced approach in relation to civil debt to ensure the protection of creditor rights by making available a range of legal mechanisms which compel payment by “won’t pay” debtors who knowingly refuse to meet their obligations. At the same time the intention to abolish imprisonment is an important milestone.”

The Department of the Environment will strengthen the regulatory regime around the payment of water charges through measures not involving court proceedings.

i. The liability for the water charge will transfer automatically to an owner of a property where the owner has not provided Irish water with the necessary details in respect of a tenant.
ii. There will be a deemed obligation, in all new tenancy agreements, for the occupier to pay water charges, other than short-term lets where the landlord may retain this liability. It would already be standard in the majority of leases that tenants have responsibility for utility payments including water.
iii. There will be a further requirement for a landlord to retain a tenant deposit until the tenant provides evidence that they have paid their water charges; this is a temporary role for landlords until such time as the PRTB take over deposit protection whereby tenants will have to demonstrate that the domestic water bill is settled to recoup deposit.
iv. Furthermore there will be an obligation to confirm that water charges are paid before the completion of the sale of a dwelling to include a requirement to discharge arrears of water charges; A yearly domestic water bill represents a minor proportion of the proceeds of a house-sale

Minister Kelly said: “Everyone has to be treated the same here. We can’t have a situation where some people are paying their water charges while others simply refuse to pay. These measures are aimed at ensuring fairness in the application of water charges and will complement the Civil Debt procedures bill which will significantly reform the way all civil debt is treated in Ireland and move it way from what is a currently excessively bureaucratic procedure. ”


 Paul Mirphy TD Anti Austerity Alliance

Paul Mirphy TD Anti Austerity Alliance

Press Statement: Anti-Austerity Alliance

 

The Anti-Austerity Alliance has responded to media reports about new legislation in relation to debt collection.

Paul Murphy TD said "This proposed legislation is not the game changer in relation to water charges that the government think it is. This legislation appears to only apply to the fines related to water charges not the charges itself.

"This means that people can safely continue to boycott the water charges as no fines are applied until after the 4th bill in 2016. By this stage a general election will have taken place and faced with a mass boycott any new government will be put under massive pressure to abolish the charge before any of this legislation comes into effect.

"This is not the property tax, Revenue are not involved, attachment orders would still have to be obtained. This shows that the boycott campaign is winning and that the government are feeling massive pressure because of it."

Councillor Mick Barry said: "The government are on the back foot - they cannot cut off your water, they cannot jail people and Revenue are not involved to steal it from people's wages or welfare.

"They have previously floated this idea about landlords deducting water charges from people's deposits but have met huge opposition from landlords. They don't want to act as debt collectors for Irish Water. They will have major problems if they go down this route."

Councillor Michael O Brien said "That the government have been forced to go down this route shows that they are aware of the massive strenght of the boycott. The boycott will defeat this charge. A mass boycott at the general election will force any government elected from it to abolish the charge. The anti-water charges movement should continue to organise the boycott campaign in communities across the country to put the maximum pressure on this Fine Gael and Labour government.


Donegal Campaigner Quieries employer Over Civil Debt Bill consequences on his wages
 

 Patrick Crawford Donegal Anti Water Charges Campaigner

Patrick Crawford Donegal Anti Water Charges Campaigner

I rang my payroll section today (HSE) and made an enquiry about if the government makes their decision to implement an attachment order against my wages to pay for a private company (Irish water) to deduct wages from my account to pay for their bills even though I'm not a registered customer, where do I stand.

Q&A: Latest in the ebb and flow of water charges saga Irish Times

Irish Water and its bills are in the news again?

Yes. This time the story is about how a utility that does not have the power to cut anyone off can make them pay. Originally the plan was to cut the water supply of non-payers to a trickle, but that wasn’t a runner, so Irish Water and the Government have had to think of something else.

Does this mean non-payers will be hauled before the courts and face jail?

No. The proposals are not fully formed but there appears to be an anxiousness by the Government to avoid just that scenario. People being jailed for non-payment would be, to quote a judge from another jurisdiction, an appalling vista. It would be disastrous PR, and the courts could not cope with the flood of cases. Then there is the stupidity element.

Stupidity element?
The fines and debts system in the Republic is not working. At present people can - and are - jailed for non-payment of fines. They can be put in prison for periods of no more than two hours, which means the cost of the punishment far exceeds the fine.

So what will happen if you can’t afford to pay?
An attachment order could be made to your wage or social welfare payments. To take money from people on social welfare would be very controversial, not to mention unfair. The Government has been anxious to intimate that the proposal will differentiate between those who cannot pay and those who will not pay. It is against international law to jail someone for not paying a fine or debt they cannot pay.

So, what happens next?
A set of compliance measures has been drafted and they include attachment orders on wages and welfare payments, and giving landlords the power to take water charges from deposits of tenants. It will also be possible to attach unpaid charges to homes so a homeowner will not be able to sell their home until they pay.

And what are the penalties?
Late payment penalties of €30 for single households and €60 for others can be applied to non-paying customers after the first year of non-payment. After that, the fines double to €60 and €120, and in the third year it will increase €120 and €240. After the fourth year that will rise to €180 and €360. But the penalties do not come in for 15 months.
Irish Times article


I also asked if this were to happen, would the HSE payroll section write out to me or send me an email stating that they are being requested to do this and offer me the opportunity to lodge a grievance, complaint or at least offer me the opportunity to fight against this happening.


In fairness the Lady that I spoke with, doesn't really know we're they stand as it has not been decided on whether this is going to happen or not.

She also said that, if it comes through as a directive through the revenue, they will have no choice but to forward my details on and then it's a matter between myself and the tax office.

She also stated that the water charge is going to be difficult to try to set up through payroll, the property tax charge was a set amount every year to which can be easily balanced out over the course of the year when making deductions from  wages, but with the water charges, depending on how much water every household uses within each month, this payment is going to different throughout each calender month.  This in turn will make it very difficult to make set payments from wages throughout the year.