As the Deputy will be aware, under the Prompt Payment Act 1997, and later the SI 580 2012 European Communities (Late Payment in Commercial Transactions) Regulations 2012, my Department is required to pay Prompt Payment Interest on valid invoices that are not processed within 30 days. In this scenario the Department applies a daily 8% interest rate (which is the ECB rate of 0.00% plus the margin of 8%) followed by a compensating amount based on the value of the invoice, as follows: Invoice Amount not exceeding €1,000 - Compensation of €40; Invoice Amount exceeding €1,000 but not exceeding €10,000 - Compensation of €70; and Invoice Amount exceeding €10,000 - Compensation of €100.
My Department monitors these payments to ensure that they are paid as promptly as possible and to reduce the possibility of Prompt Payment Interest and associated compensation being applied.
At present my Department provides a financial shared service to the Department of Further and Higher Education, Research, Innovation and Science (D/FHERIS). From January 2020 to March 2021 all published Prompt Payment returns for the Department of Education and D/FHERIS were reported under the Department of Education. This was due to the establishment of D/FHERIS during 2020 and the requirement for both Departments to use a common financial management system until the system was updated. Following the successful update to the financial management system, from April 2021 onwards the system is able to fully separate out the Prompt Payment returns between the two Departments.
All Prompt Payment amounts are published each quarter and can be found here – www.gov.ie/en/collection/396d1d-prompt-payment-returns/
The following is a summary by year of the costs included in the published reports since 2017.
- 2017: € 4,137
- 2018: € 5,014
- 2019: € 7,552
- 2020: € 7,270
- 2021 (Jan-Jun): €9,654