Jimmy Harte (Labour) | Oireachtas source

I welcome the Minister of State. I am asking the Minister for Justice and Equality to explain why an up-front fee of €500 is payable for a protective certificate to commence a personal insolvency arrangement. That is in addition to the fees of €250 and €100 fees, which I see as a tax on people's inability to pay or entering into an insolvency arrangement. This is contrasted with the UK, which has an almost identical service with no fee involved.

I have asked the Minister to explain the €500 charge. According to an expert in the area, this charge is payable before the personal insolvency process can commence. That means that if a young couple meet a personal insolvency practitioner and he or she advises that they take the route of personal insolvency, they would have to pay €500 to get to the next stage. That is in addition to the fee they would have to pay and the VAT on that fee. That is out of line with what is happening across the Border and throughout other jurisdictions. I have already raised the matter of a 23% VAT rate on the fees; such a VAT rate was challenged by a debt settlement agency when it was introduced in the UK and that objection was upheld in the courts in the UK as HM Revenue and Customs did not challenge it. We have almost identical legislation here and if somebody challenges the imposition of VAT, they will win the case. The 23% VAT rate and the imposition of the €500 has come out of the blue.

The statutory instrument was signed on 30 August, when we were on holidays and the House was not sitting, and it was not flagged. I ask the Minister to consider the issue in light of the plight of many young families who must get advice on personal insolvency and if they must pay extra money, it will be an extra burden on most couples. As we know from the findings of the credit union survey this morning, many couples do not even have €20 extra at the end of the month, yet we are asking a couple to pull out the guts of €1,000 before they can even get on the road to getting their affairs settled.

There are many personal insolvency advisers but many are being excluded from this process because of the stringency of the process in becoming a personal insolvency practitioner. It is much more stringent than the process in the UK. We will lose many people who have expertise in the area as a result, and even if these people become practitioners, they cannot advise people who were formerly clients. There are many anomalies to be addressed.