The Government will rush through legislation to allow water charges to be repaid as soon as the Oireachtas returns in the autumn, to avoid breaching the European Union water framework directive and budgetary rules.
It is understood the Department of Housing and Local Government and the water regulator have had separate discussions with the European Commission over the proposals to reimburse householders who paid the charges before they were scrapped last year.
The EU directive is based on the polluter pays principle and requires adequate pricing to encourage a sustainable use of water.
Last spring, the compromise brokered by Fine Gael and Fianna Fáil members of a special committee which looked at the issue of charging resolved to keep an element of charges for households who wilfully wasted water. All other householders would face no separate water bills.
However, some legal uncertainty surrounded the position the European Commission would adopt to the committee’s decision to reimburse householders who had paid charges.
Current spending
The department and its new Minister, Eoghan Murphy, are of the view that as the repayment is a one-off and not ongoing it will not fall foul of EU budgetary rules or the directive. However, in order to avoid such breaches, the €170 million to fund the refund will have to come from current spending in 2017 and the Government will have to convince the commission it is a one-off and find the money from unspent funding across Government departments this year.
Taoiseach Leo Varadkar said the repayments would begin in the autumn and all householders who paid bills would be refunded by Christmas. Larger households should expect to be repaid €325 if they paid all their bills.
However, the Taoiseach accepted that any Government effort to recoup the conservation grant it paid out to hundreds of thousands of households would be “extremely difficult both legally and logistically”.
The conservation grant was announced by then minister for the environment Alan Kelly in late 2014, partly as a mechanism to reduce water charges in the face of increasing public opposition to Irish Water.
The grant was treated separately to water bills and was to be claimed in September each year. The grant was paid in 2015 but suspended in 2016 pending the deliberations of the special committee which investigated the charging system.
It emerged that 190,000 households who paid no water bills, albeit many of them in group water schemes, had availed of the grant.
Speaking in Dublin Castle Mr Varadkar said the mechanism for repayment had not yet been worked out but added: “The absolute principle we are applying is those who paid their water charges, and who obeyed the law, should not be disadvantaged in any way.”
When asked about how it would be paid he said: “We need between now and the end of the year to see if money coming in from taxes is better than we expected or there are areas where there has been an underspend. There’s no pointing in pretending the money will fall from the sky.”
Fianna Fáil spokesman Barry Cowen said the refund had been agreed by the committee and said the Government needed to publish the legislation quickly to allow this to happen. He said he also wanted “clarity and a straight answer” as to where the funds would be found.
There appears to be large degree of political consensus on the refunds. Sinn Féin spokesman Eoin Ó Broin said his party had argued very strongly there should be a refund
