[00102-17: Note on refund of
domestic water charges] - For
Review by Minister
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To: Minister
Action Required: Note on options for discussion in context of General Scheme of Water
Services Bill - briefing set for 10 May 2017
Status: For Review by Minister
Purpose: For Discussion
Division/Office: Water
Decision By:
Author: Maria Graham
Owner: eSub Minister Office
Reviewers:

Executive Summary
The note sets out issues arising with options to implement the recommendation on refund of
charges in the Report of the Joint Oireachtas Committee on the future funding of domestic water
services, which states
"In respect of the most cost efficient mechanism of adhering to the principle of equity of treatment
for those who have paid and have not paid water charges, the Committee recommends that,
following consideration of payments made by the State to date through the water conservation
grant and the most effective refund methods, such households should be compensated in an
equitable manner."

Submission Detail

Domestic Water Charges Refunds
Note for the Minister
1.

The nine month period for the suspension of domestic water charges implemented by the

Water Services (Amendment) Act 2016 was extended recently to 31 July 2017. Work is underway
to prepare legislative provisions to implement the alternative arrangements recommended by the
Joint Oireachtas Committee on the Future Funding of Domestic Water Services (JOCFFDWS). One
issue which needs to be considered in this context, is the approach to compensating domestic
customers who have paid charges to date. In this case, the JOCFFDWS recommended that

 "In respect of the most cost efficient mechanism of adhering to the principle of equity of treatment
for those who have paid and have not paid water charges, the Committee recommends that,
following consideration of payments made by the State to date through the water conservation
grant and the most effective refund methods, such households should be compensated in an
equitable manner."

2.

This is against the backdrop of the Confidence and Supply Arrangement states that "those

who have paid their water bills to date will be treated no less favourably than those who have
not".

3.

Some €171m was collected in charges under the 2014 water charging regime (and a broadly

similar amount remains uncollected).

Some €90m was paid in water conservation grants (WCG)

by the Department of Social Protection (DSP) on behalf of this Department to Irish Water
customers

and

non-Irish

Water

customers

reliant

on

private/group

water

sources.

this

regard:

Options
4.

There

are

a

number

Option

of

Issues

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
Refund by Irish Water (proactive/reactive), without taking
account of Water Conservation
Grant

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options

to

be

considered

in

Preliminary view on potential
cost
No account is taken of
the WCG so greater
costs arise;
Proactive approach,
where Irish Water sends
a refund cheque to
everyone who paid is
the most straightforward €170m in refunds and €3/€5m
and administratively
in administrative costs
cost effective option;
Only those who have
paid benefit, and all
those who received the
WCG are treated equally
This is the least risk
option in terms of
matching information

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Refund taking account of WCG

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Tax refund

5.

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The netting off of the
grant could reduce the
costs by up to €70m[1].
The payment of the
WCG was not dependent
up on payment of an IW
bill. Therefore if refunds
of IW payments are
made, less the WCG,
then paying customers
could be considered to
be treated less
advantageously to those
who didn't pay but
claimed the grant;
€100m in refunds and €9Administratively, this
11m[2] in administrative costs
arrangement will be
more complex, with data
protection issues to be
addressed, as
information on payment
of bills and payment of
grant will have to be
exchanged between IW
and DSP.
There may be legal
issues to be addressed
in netting off a payment
which had originally
been made as a
universal payment.
This would have
administrative costs
associated with
Revenue, as well as Irish
Water costs and DSP
costs if WCG refunds are
to be taken into
account;
Not all customers have a More costly than foregoing.
tax liability, so a cohort
of customers would not
benefit from the refund
if progressed in this
manner (particularly
those lower income
groups reliant on DSP
pensions).

Irish Water have been asked to prepare a note on issues arising if they are asked to refund

the charges. A first draft has been received (attached) but requires further exploration by the

 Department, following engagement with the Minister. In any scenario, the CER would play a key
role

in

6.

ensuring

that

a

cost

effective

and

customer

friendly

system

is

deployed.

It would be useful to discuss the options at our proposed meeting with the Minister

tomorrow. If options taking account of the WCG are to be adopted, then additional provisions will
be required in the General Scheme of the Water Services Bill to cover issues such as data transfer.

Maria Graham

[1] This is very a tentative cost as no matching of data has taken place. Of the original file of info
transferred to DSP, 80% were Irish Water customers. Thus the €70m is assumes that 80% of the
grants paid were made to IW customers, but less than 70% of all eligible customers claimed the
grant and based on survey data it is likely that a higher proportion of non-Irish Water customers
claimed the grant compared to IW customers, so this may reduce the amount to be netted off.
[2] Includes €6m estimated for DSP costs, ie same as costs of issue of the WCG, but detailed
costings would need to be developed.

Comments
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(09/05/2017 15:02:34) by John McCarthy: We can discuss with Minister at scheduled
briefing session tomorrow. JMC