Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

To turn that on its head, if a debtor has dependents and children his or her reasonable expenses will be higher. In other words, the amount which such an individual would be effectively entitled to exclude from the pot will be higher than a single individual with no dependents. The area of discretion or elasticity in this is dependent on individual circumstances. There will be guidance as to what amounts to reasonable expenses but quite clearly what are reasonable expenses for a single individual living on his or her own with no dependents is quite different to what are reasonable expenses for an individual with a dependent spouse and dependent children. The €60 applies to the individual and his or her debt. That person will not receive additional sums because of the dependency of other individuals: the dependency of other individuals is taken into account having regard to the amount of reasonable expenses to be discounted from the pot in dealing with issues under the debt relief mechanism.

To answer Deputy Mac Lochlainn, let us remember we do not have debt settlement arrangements at present. If one runs up a substantial amount of unsecured debt, providing a mechanism whereby one may be able to extricate from debt based on discharging a reasonable proportion of it in the context of one's income and personal financial circumstances would provide a light at the end of the tunnel. In this context it is envisaged a part of the debt may not be discharged.

The Deputy is correct to state the credit unions are making certain representations on this as is FLAC and there are various perspectives. FLAC does fantastic work and it deals with debtors all the time. It represents people in debt and tries to make the best case it can for those in debt. On the other side of it are the creditors who may be ordinary individuals with part of the debt owing to them not being paid. They may find themselves trying to engage in a debt settlement arrangement because they may get into personal difficulties. There are also the credit unions which are understanding of individuals in financial trouble, but which need to try to recoup the moneys they lend out for the benefit of the other members of the credit union who may want to borrow from it and for the liquidity and security of the credit union.

All of these different interests are valid. They are all what I describe as good-faith interests. We must try to make a judgment as to where to find the balance. This means one does not please either side totally in where one goes. One tries to find the balance. As I stated, one would almost need the judgment of Solomon in some of these cases. Is there a perfect figure in a range of areas here? There is not. This is the judgment that has been made after a great deal of thought, teasing out and looking at what happens in other jurisdictions.

If a wrong judgment is made and we discover along the route after the legislation has been tested and working for a while that amendments are required to it I will not be slow to introduce them, whether they are on what might be perceived to be a minor issue or a major issue. We need to get it up and running and get a sense of it. We need to have some regard to the lessons from other jurisdictions and try to find the balance between the different valid cases made on each side either from the perspective of creditors or debtors.

What makes the debt relief notice somewhat less controversial to address is that it generally does not have a whole heap to do with banks and the mistakes banks made. However, it has a minor heap to do with them in that some of it will be credit card debt. MABS deals all the time with people who have got themselves into credit card debt. It is not what I describe at this level as major debt of hundreds of thousands of euro or millions of euro through very bad borrowing decisions or bad lending decisions made by banks which should have been more diligent in what they were doing. In this particular area we are just trying to find a balance. We believe this is the right balance for the start of the legislation. It is very worthwhile that we tease through out.

See this speech in context