Department of Justice tries to allay insolvency fears

The Department of Justice last night moved to allay fears that “draconian” minimum income guidelines drafted by the new Insolvency Service of Ireland will force people to live at “subsistence levels” for as long as six years.

The guidelines will not be published until the middle of this month, but leaks over the past 10 days have suggested that people may have to give up their jobs if their income is less than the cost of childcare while health insurance and cars may also have to be surrendered.

Families who enter an insolvency arrangement could be forbidden from taking holidays while a single adult will be allowed just €31 each month to cover over-the-counter medicines, as well as visits to the GP, dentist and opticians.

The latest leaks suggest the ISI is considering allowing a single person just €29 a week for “social participation” while those living close to a public transport network may be forced to sell their cars and be given a monthly allowance of €136 to spend on public transport. Just over €100 would be allowed to cover all energy costs while single people would be allowed €20 a month to cover all emergencies.

A spokeswoman said while the department was not in a position to respond in detail to what she described as the “draft guidelines” now in the public domain, it was “anticipated that some changes/additions will be made” following the conclusion of the consultation process. She said the final guidelines would be designed “to strike an appropriate balance between the interests of debtors and creditors” and said it “would be a mistake to assume that the final guidelines published will be identical to those referenced in some reports”.

She said under the model, a reasonable standard of living “does not mean that a person should live at a luxury level but neither does it mean that a person should only live at subsistence level.”

Fianna Fáil's finance spokesman Michael McGrath said the leaked guidelines were "draconian and far too prescriptive and go into far too much detail as to what people can and cannot spend money on. I don't think it is possible to fit all families under this one umbrella."