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Household Charge

Dáil Éireann Debate, Thursday - 28 June 2012

Thursday, 28 June 2012

Questions (6, 7)

Barry Cowen

Question:

6Deputy Barry Cowen asked the Minister for the Environment; Community and Local Government the number of persons who have paid the household charge to date; his plans to compensate the Local Government Fund for the shortfall in projected revenue; and if he will make a statement on the matter. [31155/12]

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John Browne

Question:

8Deputy John Browne asked the Minister for the Environment; Community and Local Government if he will outline his on-going communication campaign in relation to payment of the household charge; if methods of payment have been changed; and if he will make a statement on the matter. [31151/12]

View answer

Oral answers (11 contributions)

I propose to take Questions Nos. 6 and 8 together.

The Local Government (Household Charge) Act 2011 provides the legislative basis for the household charge. Under the Act, an owner of a residential property on the liability date of 1 January 2012 is liable to pay the household charge, unless otherwise exempted or entitled to claim a waiver. The household charge is on a self-assessment basis and it is a matter for an owner of a residential property on the liability date to determine if he or she has a liability and, if so, to declare that liability and pay the household charge.

The Local Government Management Agency, LGMA, administers the household charge system on a shared service-agency basis for all county and city councils. I understand, from data provided by the LGMA, that as of 22 June 2012, a total of 967,816 properties had been registered for the household charge. This represents 60% of the total number of households liable. A total of 17,607 declarations have been received where a waiver from payment of the household charge has been claimed.

It is estimated that there are some 1.6 million residential properties potentially liable for the household charge. As such, if collected in full, the household charge has the potential to raise €160 million annually.

The communication and advertising campaign is a matter for the LGMA and the county and city councils.

Following the 31 March payment deadline, national and local radio advertisements were undertaken to remind persons of their obligations under the household charge legislation. In particular, this campaign was aimed at reminding householders that late payment penalties applied after 31 March and that unpaid household charges and late payment penalties remain as a charge against the property concerned and will have to be discharged in the event of the transfer or sale of the property. In addition, local authorities also took local initiatives to remind persons of their obligations under the legislation. Further local and national communications and advertising will be undertaken by the LGMA and local authorities as considered appropriate.

A range of options is available for persons to pay the household charge. An online system,www.householdcharge.ie , is in place in the LGMA to enable homeowners to pay the household charge by credit or debit card and more than 60% of those who have paid to date have chosen to do so online. In addition, homeowners can make payment by cheque, postal order and credit or debit card by completing the relevant payment details on the declaration form and posting it to Household Charge, PO Box 12168, Dublin 1. Instalment payments were available by direct debit only and persons opting to pay in this way had to register their details with the LGMA before 1 March, 2012. This deadline was necessary in order to meet banking requirements for direct debit arrangements.

A bureau is in place to administer the charge on a shared service basis. As an incentive to pay the self-assessed charge, late payment fees and late payment interest apply and any amounts due and unpaid remain as a charge against the property concerned. I am keeping the income generated from the household charge under constant review. The local authorities will be in touch with people who have not paid to date in the very near future and they will receive letters in the coming weeks indicating the need to pay the charge and the penalties and fees involved.

Apart from the previously aired issues regarding the household charge, namely, that it is unfair and inequitable and we have had examples quoted of the millionaire having to pay the same amount as the unemployed person in negative equity, has the Minister any plans to take it to the next level where local authorities which collect the charge in their areas would administer and spend it in their areas? The current position does not sit well with people whereby they pay the money and it goes into a central fund in Dublin. On many occasions the Minister has equated the payment of the household charge to the running of parks and so on in local authority areas but people do not see it like that. It is a local tax and is locally collected.

I agree with Deputy Collins that ideally we would like to have money raised at local level ring-fenced at local level but at present the way the system works is that there is a equalisation dimension to the local government fund for particular countries that do not have the necessary number of houses. We would have a very low level of service in some parts of the country, particularly in rural Ireland, if we did not have the equalisation measure. Those on the east coast are subsidising the west cost in regard to the matters and that has always been the case.

Ideally, and this will be part of a local government reform policy statement, I would like to see opportunities, much wider than exist now, for local authority councillors to be in a position to raise money locally in order to retain that money locally. That will be a fundamental change from the current system where almost 80% of all the various moneys they get through various funds have less discretionary opportunities for councillors than we would like. I agree with the principle of what Deputy said.

I am opposed to the household charge, the way it is being administered and that it does not take account of people's wealth and those who are very wealthy in society. How does the Minister propose to collect the charge from those who have not paid it? He has said that 60% of householders have complied and 40% have not. It is one thing to talk about going to court and placing the burden of this charge on people in terms of the value of the house. Even if the number who comply increases, a large percentage of householders will still not be paying the charge. Therefore, there will be a huge deficit in the money that is needed and that will have to be got from somewhere. From where does the Minister propose to get it?

Can he clarify that the waiver in respect of the charge for senior citizens will only be in place this year? It is very deceptive to say to people that they will have a waiver in respect of the charge when it will only be in place for a year.

The Minister has been reported in the newspapers, and I go by what they say, as having said that he will not take any money out of people's wage packets or otherwise in this respect. I want the Minister to clarify that because sometimes one does not know if what one reads in the newspaper is the truth.

What about An Phoblacht?

No. We tell the truth all the time. With regard to the Department's advertising campaign in respect of this charge which was not properly dealt with by the company concerned, what was the cost of that campaign?

The last person in here who should be bringing up anything about property tax is Deputy Ellis and Sinn Féin.

We are in favour of a wealth tax. We have already said this.

Let me answer. I did not interrupt the Deputy.

A charge of £900 per house is the average that is paid in Northern Ireland and the Deputy's party is in charge up there. The notion that Sinn Féin sought the abolition of the household charge, used its Private Members' time last week to do so, was a pure waste of time and very hypocritical, and I do not say that lightly.

In regard to following up on people who have not paid, letters will be issued in the next few weeks. We have cross-checked details with the help of the Data Protection Commissioner. We have access to information now that will allow people to get letters and to remind them of their obligation under the law. Also it is important for local authorities to get in this money, otherwise they could face cuts in services towards the end of year if they do not have it.

The Deputy will be aware that this is part of the EU-IMF agreement. I do not have the luxury of doing anything other than getting in this money. The Minister for Finance does not have any more money in the form of a Supplementary Estimate to give the necessary resources to local authorities. It is in everybody's interest to pay into this fund in order to ensure that the services continue to be provided and that employment in local government continues. I expect the Deputy supports the principle of expecting people to pay through property tax for services. There is a flat charge basis this year, which the Deputy has said is not the right way to go, but it will be different next year and in future years when the Government decides what form a property tax will take. Everybody will realise that there will be a much fairer and progressive system. I have always accepted that the flat charge was not ideal but we were obliged to implement it because of the obligations to which we signed up under the EU-IMF agreement.

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