Phil Hogan (Carlow-Kilkenny, Fine Gael)

Late payment fees and late payment interest will only apply if the household charge is not paid in respect of a liable property by or on the due date of 31 March. These are similar provisions to those that apply under Revenue legislation in respect of the late filing and payment of certain taxes and will act as an incentive for persons to pay the self-assessment household charge on time. Any household charges, late payment fees and late payment penalties will remain as a charge against the property concerned.

The Government recognises that the charge represents an additional cost for home owners and it is proposed to facilitate them by allowing it to be paid by direct debit in four equal instalments of €25. I will set out in regulations the dates by which each instalment will fall due and the arrangements for the payment of the instalments.

Similar to the €200 charge on NPPRs, an online system is being developed by the Local Government Management Agency, LGMA, to enable home owners pay the household charge over the internet by credit or debit card. In addition, home owners will be able to make payments by cheque and postal order through the post to the LGMA. A bureau will be put in place in the agency to administer the charge on a shared service-agency basis for all local authorities.

It is recognised that the existing revenue base of local authorities is narrow by international standards. This was a consideration in the introduction of the NPPR charge in 2009. While the charge represents a dedicated source of funding for local authorities, which is relatively stable, it does not go far enough in addressing the imbalance in the sector's financing. A proper broadening of the revenue base for local government will come about as a result of the introduction of the household charge. This measure is significant because it recognises that local authorities should not be disproportionately dependent on central government funding.

The proceeds of the household charge will be paid directly into the local government fund. As Minister for the Environment, Community and Local Government with responsibility for the management of the fund, I will disburse moneys back to local authorities in general-purpose grants. It is considered that this approach is preferable to allowing local authorities to directly retain moneys collected from the household charge in their areas. It will make it possible to introduce equalisation into its distribution, ensuring local authorities with higher populations than others do not benefit unduly as a result.

The Government proposes that a small number of exemptions to the household charge will apply. The proposed exemptions are properties that are part of the trading stock of a business and have not been sold, occupied or been the source of any income since their construction; properties vested in local authorities or voluntary and co-operative housing bodies for social housing, as making such properties liable would lead to a circular flow of income and be unnecessarily bureaucratic; properties owned by a Government or the HSE and used or let in the performance of their functions, as making such properties liable would lead to unnecessary circular administrative structures; properties to which commercial rates apply - as with the second house charge, it is intended that this charge would operate as an alternative to commercial rates, that is, a property will be liable for either commercial rates or the household charge if it is domestic property, but not both; where a person is forced to vacate a property because of long-term mental or physical infirmity - this exemption was included in the Local Government (Charges) Act 2009 as a compassionate measure intended to provide for elderly people who have no choice but to move out of their sole or main residence into a residential nursing home; and where a charity owns a property.

In addition to these exemptions, two important waivers will apply to the charge. The programme for Government commits to giving consideration, in the context of introducing a property tax, to the impact that such a tax would have on the number of households in mortgage distress. The Government, therefore, proposes to exclude from the charge households in receipt of mortgage interest supplement from the Department of Social Protection. Mortgage interest supplement provides short-term support to help eligible households pay mortgage interest payments. In excess of 18,000 households will benefit from this waiver. The Government also intends providing a waiver for households in certain categories of unfinished housing estates. The report of the advisory group on unfinished estates identified two categories of households in particular difficulty: category 3, comprising 1,112 estates, where a developer is in place but there is no on-site activity and where there are significant planning, building control compliance and public safety issues to be addressed; and category 4, comprising 188 estates, where the developer or site owner is not contactable and-or where no receiver has been appointed and serious public safety problems similar to category 3 exist.

I will set out the estates to which the waiver will apply in regulations. These regulations will be informed by local authority returns to the Department from the 2011 national survey of unfinished housing estates. The Government's priority is to address the needs of these estates as quickly as possible but, in the interim, this waiver will benefit such residents as they work with other stakeholders in developing resolutions for these problematic developments. The costs of this waiver will abate over time as the issues in these estates are resolved and property owners become liable for the charge.

During the Bill's passage through the other House, a number of amendments were put forward, proposing to exempt various additional categories of properties and persons from the charge, including affordable housing, those who had paid stamp duty in the housing boom period and persons in receipt of the numerous welfare payments from the Department of Social Protection. These proposals would have the potential to severely reduce the amount collectable from the charge, would significantly increase the administrative burden and costs associated with the charge and would be inconsistent with the need to introduce a new broadly based revenue stream of funding, which is vital for local government services.

While I accept the introduction of the charge is an additional cost to households, the exemptions and waivers provided in the Bill, added to the provisions for instalment arrangements, in my view, provide a comprehensive response to those in particular need. I would also point out to Deputies that expanding the number of exemptions would leave no option but to increase the charge for others in order to raise the revenue necessary to adequately resource local government.

I consider it important to reiterate that those households that have no liability for the charge include: tenants in private rented accommodation for any lease or tenancy under a term of 20 years; tenants in local authority housing; tenants in receipt of supplementary welfare allowance rent supplement from the Department of Social Protection; households who are purchasing their homes under the shared ownership scheme, where the local authority still retains an ownership stake; tenants and-or those living in housing provided by voluntary and co-operative bodies and charities; those living in housing vested in the HSE or a Minister of the Government; those home owners who have been forced to vacate their property by reason of long-term mental or physical infirmity and who are now living in a property which they do not themselves own; those households in receipt of mortgage interest supplement; home owners residing in certain unfinished housing estates; and those residing in property owned by charities or discretionary trusts. I am confident, therefore, the Bill provides a reasonable level of protection for those in greatest need in our communities.

Concerns were also raised in the Seanad on the issue of bedsits and liability to the household charge. While the charge does apply to such properties, I must stress again that it is the owners of bedsits who will be liable, not the tenants.

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