Dáil Éireann Debate, Thursday - 20 February 2014
178. Deputy Aengus Ó Snodaigh asked the Minister for Justice and Equality if persons who are going through an insolvency process are expected to pay a portion of their social welfare payment to their bank. [8647/14]
View answerPersons solely reliant for income on payments received from the Department of Social Protection would not ordinarily be expected to pay a portion of this to creditors during the course of either a Debt Settlement Arrangement or a Personal Insolvency Arrangement. The legislative provisions contained in the Personal Insolvency Act 2012 preclude either arrangement containing any terms which would require the debtor to make payments of such an amount that the debtor would not have sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants.
Initial guidelines as to what constitutes a reasonable standard of living and reasonable living expenses were published by the Insolvency Service of Ireland (ISI) in April 2013 and an updated guide issued in June 2013 to reflect adjustments for inflation. The guidelines produced by the ISI are a modified version of the consensual budget standards model originally developed in Ireland by the Vincentian Partnership for Social Justice which has conducted research in Ireland for over 12 years on developing necessary expenditure figures for different types of households. The guidelines received a general welcome from debtor advocacy groups for offering insolvent debtors protection in negotiations with creditors.
It may be the case that where debtors have social welfare payments in addition to other income, a Family Income Supplement for example, then they have net disposable income in excess of the guidelines published by the ISI from which they are able to make payments to creditors as part of a Debt Settlement Arrangement or a Personal Insolvency Arrangement. It should be noted that where a debtor qualifies for a Debt Relief Notice, payments to creditors from income will not be made at all unless the circumstances of the debtor improve in accordance with the provisions of the legislation over the three year period of the Notice. Ordinarily, debts subject to a Debt Relief Notice will be written off at the end of the three year period.
