Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I was about to respond to comments on the amendment when the debate adjourned. If the Senators bear with me, I wish to ensure I refer to the correct amendment. My recollection is that we dealt with most of the issues. Senator Daly raised an issue related to consultations with banks and there was some sort of strange and odd implication that the banks were prescribing this legislation. Let me be absolutely clear about this; this is legislation to deal with the entire area of insolvency in a manner that extends to individuals who are in major trouble the possibility of avoiding bankruptcy. It provides the possibility of a non-judicial settlement in the context of debt settlement and personal insolvency arrangements.

This will facilitate arrangements being entered into with creditors that may result in some levels of debt forgiveness or debt forbearance and that will allow people within a prescribed period of years to work their way out of the financial difficulties in which they find themselves. Personal insolvency arrangements, which would apply to secured debt as well as unsecured debt, are relevant to individuals who have borrowed money on foot of security on property, in particular residential and commercial property. Debt settlement arrangements would apply to unsecured debt, which may be debt owing to banks.

Those Senators who followed the debate on this Bill as it went through the Lower House and headed into this House might notice that the Irish Banking Federation, IBF, is extremely unenthusiastic about some of the mechanisms contained in this particular measure.

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is good.

Thomas Byrne (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It doth protest too much.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The reality is that the Government has had concerns. Whereas it is fair to acknowledge that banks engaged in substantial debt forbearance for many individuals, particularly in the home loans area, in recent years - the statistics show that there are more than 80,000 individuals who, over the past four years, have been in areas of debt forbearance for periods of time if not continuously, in that they may only have been making interest repayments on mortgages or paying a portion of capital as well as interest, but not the full sum - banks have been very slow to engage in debt forgiveness. The reality is that those who can afford to discharge their debts should discharge their debts whether those are secured or unsecured debts.

However, there is an area of concern to the effect that there are individuals who, in terms of home loans for example, are in serious negative equity, do not have the income to discharge capital and interest on their monthly mortgage repayments to avoid arrears, are in substantial arrears and are in financial circumstances in which it is clear that, for the foreseeable future, they will not be in a position to pay the full sum of capital and interest and where their negative equity is such that, in truth, the banks or financial institutions do not have security for the money lent.

For example, if a bank lent ¤500,000 for a residential home in 2005, if that was the cost of the residential home, namely, if a 100% loan was provided, if that home is today worth ¤250,000, if what was a two-income family has become a one-income family, if there is barely a capacity to make the interest repayments, never mind the capital, and if there are no other major resources, individuals in such circumstances may find themselves either in a position in which they have to seek bankruptcy, in which case they would lose their home, or a personal insolvency arrangement, under which they would have the opportunity to retain their home. If their creditors engage with them, their creditors will have an opportunity to look at what full arrangements might be put in place to facilitate their addressing their debt issues.

There will be families in circumstances like this where debt forgiveness will be appropriate. Members can be assured that, in any representation or discussion that has taken place, that has been explained and made clear. It is one of the options under the personal insolvency arrangement.

On the other hand, if someone is in negative equity but can afford to make mortgage repayments, or if someone is in negative equity with one property but has other resources and assets, he or she has an obligation to meet his or her financial commitments if he or she is in a financial position to do so. The alternative is that the banking system will realise even greater losses, which may ultimately impact on taxpayers.

Senator Daly seemed to be getting excited yesterday evening as we concluded. If he is trying to make the case that this legislation has been written by the banks to score some crass political point, I assure him that it is not. If I was Senator Daly and bearing in mind the contribution his party made in government to destroying the economy of this State and putting us in major debt, in encouraging the property boom - it encouraged people to buy properties at exorbitant prices and looked the other way when the regulatory system completely collapsed - and in being substantially responsible for the mire that the country has found itself in, I would not be foolish and make silly allegations about a Bill that is the most reformist legislation on insolvency in the history of the State and an area of work in respect of which absolutely no work of any description was undertaken during the course of the last Administration's period in government. What I do not want to do today is waste time on trying to score political-----

Thomas Byrne (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We will decide how to regulate our time.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We are not doing that.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----points against one another. What I want to do today is-----

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I asked the Minister for details, but-----

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----work our way through-----

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----all he is giving us is speeches.

David Cullinane (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

This is a bit of a joke.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

----the substance of the Bill.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That would be great, but yesterday I asked the Minister-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister without interruption.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----for details of the minutes of the banks' lobbying of him-----

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If some Fianna Fáil Senators, and one in particular,-----

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----but he refused to give them.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Senator will have his chance to contribute.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----want to engage in some foolish political exercise in the context of-----

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Hear, hear.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the Minister willing to provide the House-----

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----massive legislation that his own party in government-----

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----with the details of the minutes of his meetings with the banks?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Senator, we are on amendment No. 5.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----for the best part of 20 years was incapable of publishing, I would suggest to him that he should desist.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I admit that this does not relate to amendment No. 5, but-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will allow the Senator to contribute now.

David Cullinane (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Someone got out of the wrong side of the bed this morning.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I simply asked the Minister, and will ask him again, whether he will provide the details of the times and dates that the banks and their representatives met his officials and officials from the Department of Finance, the position papers on this legislation presented by the banks at those meetings and what changes the Government made to the legislation as a result of those meetings. I am asking him again, as I asked him yesterday-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Senator is repeating his request.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Exactly.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am not sure of its relevance to the amendment.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am asking him whether he will provide the House with copies of the minutes-----

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

The Senator's Government never provided details of what occurred on the night of the bank guarantee.

Ivana Bacik (Independent)
Link to this: Individually | In context | Oireachtas source

On a point of order, how is this relevant to the amendment before the House?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That was my point.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It would be grand if-----

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

What happened on the night of the guarantee?

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister raised the issue. If he is willing to address me across the floor of the House-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister-----

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----regarding my request for-----

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

The Senator is ignoring the Chair.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----details of the dates and times when meetings were held with the Minister and Government officials and the position papers put forward-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Senator Daly should respect the Chair.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----by the banks for amendments to this legislation, it is legitimate of me to question him.

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

The real issue is what-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister has given a detailed response. Yesterday, he stated that he would complete his response and he has spoken for nearly 15 minutes this morning.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He has not given an undertaking to facilitate my request and provide the details.

Ivana Bacik (Independent)
Link to this: Individually | In context | Oireachtas source

Stick to the amendment.

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

Senator Daly asked what the banks were getting out of it.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Will the Minister provide the details?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In my view, that matter has nothing to do with this amendment.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is that a "No"? In the eyes of the law, silence is not affirmation, as the Minister well knows. Will the Minister provide the information that I have requested?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Senator Daly has made his point. I call Senator Cullinane.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the Minister willing to reply?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He will respond when I decide to allow him.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

A simple nod of his head would do.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Senator Daly should resume his seat. He has made his point clearly.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He still has not given me a reply.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He does not need to. When I call him, he will reply.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He spent 15 minutes giving out about the fact that I asked about the information.

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Could we have a bit of order, please?

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In that entire time, he did not say whether he would provide the information.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will decide when the Minister can respond.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I look forward to hearing his reply.

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Suigh síos.

David Cullinane (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister spent ten minutes attacking Fianna Fáil. He is entitled to his views and I share many of the sentiments that he expressed. However, we have 120 amendments before us. I hope that this does not become a Punch and Judy show for the next couple of hours and that we can get down to the business of dealing with the amendments. The Minister needs to take some responsibility for his comments in this regard. He tried to take us down a cul-de-sac, but we should avoid those.

Regarding the banking sector and its powers, it is not right of the Minister to claim that the banks do not have a veto. He knows that the banks have complete power over personal insolvency arrangements. This is one of the central critiques of the Bill by many parties as well as individuals outside the political establishment. We all accept that the Bill's provisions are a step forward, but suggesting that the banks are in any way being forced to compromise does not match the reality of those provisions.

I will stick to the amendments, as we have many to discuss during the coming hours.

This will facilitate arrangements being entered into with creditors that may result in some levels of debt forgiveness or debt forbearance and that will allow people within a prescribed period of years to work their way out of the financial difficulties in which they find themselves. Personal insolvency arrangements, which would apply to secured debt as well as unsecured debt, are relevant to individuals who have borrowed money on foot of security on property, in particular residential and commercial property. Debt settlement arrangements would apply to unsecured debt, which may be debt owing to banks.

Those Senators who followed the debate on this Bill as it went through the Lower House and headed into this House might notice that the Irish Banking Federation is extremely unenthusiastic about some of the mechanisms contained in this particular measure.

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is good.

Thomas Byrne (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It doth protest too much.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The reality is that the Government has had concerns. Whereas it is fair to acknowledge that banks engaged in substantial debt forbearance for many individuals, particularly in the home loans area, in recent years - the statistics show that there are more than 80,000 individuals who, in the past four years, have been in areas of debt forbearance for periods of time if not continuously, in that they may only have been making interest repayments on mortgages or paying a portion of capital as well as interest, but not the full sum - banks have been very slow to engage in debt forgiveness. The reality is that those who can afford to discharge their debts should discharge them, whether they are secured or unsecured. However, there is a concern to the effect that there are individuals who, in terms of home loans, for example, are in serious negative equity, do not have the income to discharge capital and interest on their monthly mortgage repayments to avoid arrears, are in substantial arrears and in financial circumstances in which it is clear that, for the foreseeable future, they will not be in a position to pay the full sum of capital and interest and where their negative equity is such that, in truth, the banks or financial institutions do not have security for the money lent. For example, if a bank lent ¤500,000 for a residential home in 2005, if that was the cost of the residential home, namely, if a 100% loan was provided, if that home is today worth ¤250,000, if what was a two-income family has become a one-income family, if there is barely a capacity to make the interest repayments, never mind the capital, and if there are no other major resources, individuals in such circumstances may find themselves either in a position in which they have to seek bankruptcy, in which case they would lose their home, or a personal insolvency arrangement, under which they would have the opportunity to retain their home. If their creditors engage with them, their creditors will have an opportunity to look at what full arrangements might be put in place to facilitate their addressing their debt issues.

There will be families in circumstances like this where debt forgiveness will be appropriate. Members can be assured that, in any representation or discussion that has taken place, that has been explained and made clear. It is one of the options under the personal insolvency arrangement. On the other hand, if someone is in negative equity but can afford to make mortgage repayments, or if someone is in negative equity with one property but has other resources and assets, he or she has an obligation to meet his or her financial commitments if he or she is in a financial position to do so. The alternative is that the banking system will realise even greater losses, which may ultimately impact on taxpayers.

Senator Daly seemed to be getting excited yesterday evening as we concluded. If he is trying to make the case that this legislation has been written by the banks to score some crass political point, I assure him that it is not. If I was the Senator and bearing in mind the contribution his party made in government to destroying the economy of this state and putting us in major debt, in encouraging the property boom - it encouraged people to buy properties at exorbitant prices and looked the other way when the regulatory system completely collapsed - and in being substantially responsible for the mire that the country has found itself in, I would not be foolish and make silly allegations about a Bill that is the most reformist legislation on insolvency in the history of the State and an area of work in respect of which absolutely no work of any description was undertaken during the course of the last Administration's period in government. What I do not want to do today is waste time on trying to score political points against one another.

Thomas Byrne (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We will decide how to regulate our time.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We are not doing that.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What I want to do today is work our way through the substance of the Bill.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I asked the Minister for details, but all he is giving us is speeches.

David Cullinane (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

This is a bit of a joke.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That would be great, but yesterday I asked the Minister for details of the minutes of the banks' lobbying of him but he refused to give them.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Senator will have his chance to contribute. The Minister to continue, without interruption.

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If one Fianna Fáil Senator, in particular, wants to engage in some foolish political exercise in the context of massive legislation that his own party in government for the best part of 20 years was incapable of publishing, I suggest to him that he desist.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the Minister willing to provide the House with the details of the minutes of his meetings with the banks?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We are on amendment No. 5.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I admit that this does not relate to amendment No. 5, but-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will allow the Senator to contribute now.

David Cullinane (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Someone got out of the wrong side of the bed this morning.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I simply asked the Minister - I will ask him again - whether he will provide the details of the times and dates that the banks and their representatives met his officials and officials from the Department of Finance, the position papers on this legislation presented by the banks at those meetings and what changes the Government made to the legislation as a result of those meetings. I am asking him again, as I asked him yesterday-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Senator is repeating his request.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Exactly.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am not sure of its relevance to the amendment.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am asking the Minister whether he will provide the House with copies of the minutes-----

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

The Senator's Government never provided details of what occurred on the night of the bank guarantee.

Ivana Bacik (Independent)
Link to this: Individually | In context | Oireachtas source

On a point of order, how is this relevant to the amendment before the House?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That was my point.

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

What happened on the night of the guarantee?

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister raised the issue. If he is willing to address me across the floor of the House regarding my request-----

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

The Senator is ignoring the Chair.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----for details of the dates and times when meetings were held with the Minister and Government officials and the position papers put forward by the banks for amendments to this legislation-----

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Senator should respect the Chair.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

----it is legitimate for me to question him.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister has given a detailed response. Yesterday, he stated that he would complete his response and he has spoken for nearly 15 minutes this morning.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He has not given an undertaking to facilitate my request and provide the details.

Ivana Bacik (Independent)
Link to this: Individually | In context | Oireachtas source

Stick to the amendment.

Aideen Hayden (Labour)
Link to this: Individually | In context | Oireachtas source

Senator Daly asked what the banks were getting out of it.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Will the Minister provide the details?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That matter has nothing to do with this amendment.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is that a "No"? In the eyes of the law, silence is not affirmation, as the Minister well knows. Will the Minister provide the information that I have requested?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Senator has made his point.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the Minister willing to reply?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He will respond when I decide to allow him.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

A simple nod of his head would do.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Senator should resume his seat. He has made his point clearly.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister still has not given me a reply.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He does not need to. When I call him, he will reply.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He spent 15 minutes giving out about the fact that I asked about the information.

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

May we have order, please?

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In that entire time the Minister did not say whether he would provide the information.

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will decide when the Minister can respond.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I look forward to hearing his reply.

Martin Conway (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Suigh síos.

David Cullinane (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister spent ten minutes attacking Fianna Fáil. He is entitled to his views and I share many of the sentiments that he expressed. However, we have 120 amendments before us. I hope that this does not become a Punch and Judy show for the next couple of hours and that we can get down to the business of dealing with the amendments. The Minister needs to take some responsibility for his comments in this regard. He tried to take us down a cul-de-sac, but we should avoid those.

Regarding the banking sector and its powers, it is not right of the Minister to claim that the banks do not have a veto. He knows that the banks have complete power over personal insolvency arrangements. This is one of the central critiques of the Bill by many parties as well as individuals outside the political establishment. We all accept that the Bill's provisions are a step forward, but suggesting that the banks are in any way being forced to compromise does not match the reality of those provisions.

I will stick to the amendments, as we have many to discuss during the coming hours.

I ask the Minister not to engage in party political point-scoring with any party, as if he does we will not get through all the amendments. We all want to do them justice.

Thomas Byrne (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The amendment refers to Part 5, which is a massive new piece of the legislation that will be added if Senators support it. Is there an explanatory memorandum for the amendments? There was an issue with the last Government when Bills were produced and substantial amendments made to them. It was agreed at the time that explanatory memorandums would be provided. Is that the case now?

Denis O'Donovan (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is a matter for the Minister to decide. The Minister explained yesterday that when amendments, either from the Government or others, are tabled, he will deal with them as he goes along.

Alan Shatter (Dublin South, Fine Gael)
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We are dealing with personal insolvency practitioners in this amendment, which would enable us to get to Part 5. I thank Senator Byrne for bringing us back to the issue we should be addressing today. When we reach an amendment, Members will get the script I have, which should be of assistance as we go through the Bill. That is unusual but we will do the same when we get to a large amendment dealing with courts issues. Senators will have to forgive me if I do not stick rigidly to the script as other issues may occur. That should provide the background that I hope will make the process easier to follow.

I have not yet seen a Bill for which a new explanatory memorandum is produced for the amendments. There is a timing difficulty in that regard, as often the amendments are finalised only in the last few days before coming to the Seanad.

Paul Bradford (Fine Gael)
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We have read that the insolvency service will consist of a director, members of staff, etc. Has any consideration been given to the concept of having a board support structure along with the service? Would it be useful or helpful to have a board structure where there could be a broader range of interests as part of the consideration of policy? Most people would feel we have not had the best experience with the public interest directors on some of our financial services boards but perhaps the Minister might consider the issue. These are, in a sense, private financial arrangements between debtors and creditors, but there is a broad public policy issue in the mix of decisions, with certain decisions made that will reflect either favourably or unfavourably on the taxpayer and the broader public. We should include public interest thinking at least as part of the policy of the director and the staff. There may be some other way of ensuring that the broader public interest becomes part of the policy making for the organisation.

Alan Shatter (Dublin South, Fine Gael)
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A decision was made that there was no purpose or need to create a board and we are trying to avoid creating unnecessary quangos and expense for the general public. The insolvency service will have a series of discrete functions delineated in the Bill. It is also important that there is a degree of transparency in the actions of the service. As Senators look through the Bill, they can see that within six months of establishment, the insolvency service must produce a strategic plan that will come to the Minister and be published. There is also provision for it to be laid before each House of the Oireachtas and the plan must be reviewed every three years. There are also provisions for a business plan. In section 16 there is scope for reports by the insolvency service and for it to produce an annual report.

In a sense there will be direct connectivity between the work done by the insolvency service and the Houses of the Oireachtas. With the legislation, if the relevant Oireachtas committee wishes the director of the service to make a presentation and answer questions about its strategic plan and the manner in which the agency operates, it is an option. The decision was made that in this current economic climate, it would be superfluous to create a board with all the infrastructure and secretarial facilities that would go with it. That would have been a waste of public money and there is no purpose in having individuals on a board and being remunerated for that. By having the maximum connectivity between the services and the Houses of the Oireachtas, with a series of mechanisms in place allowing full insight into the strategy being deployed and a business plan, there is transparency that takes in auditing of accounts and a requirement for an annual report. This would meet all the necessary criteria.

Aideen Hayden (Labour)
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This is a minor matter relating to the charging of fees by the personal insolvency service. I know the Minister has provided for exemptions from the payment of fees or for waiving, remitting or refunding fees in whole or in part in different circumstances, classes of circumstance, cases or classes of case. Sometimes public bodies under pressure which find it difficult to deal with a volume of cases may use different strategies to keep the public at arm's length. These strategies may include opening and closing hours, access by the public etc. Sometimes, unfortunately, this extends to the charging of fees. Long before the Minister held office, the aliens section in the Department of Justice famously opened the telephone lines between 10 a.m. and 11 a.m. and one could never access that section on behalf of a client. Any fees charged by the insolvency service must make the service accessible to the widest possible extent, particularly as many accessing the service will be in deep financial distress or have limited means. I am not sure if this can be accommodated within the legislation but there is other legislation in which it has been specifically indicated that a service must be "cheap". Sometimes we do not like that term because it implies something is cheap and nasty but this service must be affordable. If it is possible within the legislation or any of its instruments, we should ensure that any fees charged by the service will be affordable.

Alan Shatter (Dublin South, Fine Gael)
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In a sense this is an empowering provision. In some circumstances it may be appropriate to charge fees. It would defeat the purpose of the legislation if individuals in major financial difficulty could not access it because there was a fee structure which created a barrier. There is no intention of any description that matters will develop that way. Although all Ministers are transient in their occupation of this particular office, I could not imagine that any of my successors would put in place a fee structure that would act as a barrier to an insolvent individual in accessing a service. I can give Senator Hayden assurances in that regard. I do not believe there is a need to amend the section in the manner she is suggesting because this speaks for itself. It is insolvency legislation and it is important that people who are truly insolvent can access the service, but it must not be forgotten that it is a service with two strands. There will be the personal insolvency practitioners and the insolvency service, which effectively is the service that will sign off on debt settlement or personal insolvency arrangements, whichever of the different structures someone succeeds in entering into.

Denis O'Donovan (Fianna Fail)
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Amendment No. 6 is a Government amendment. Amendments Nos. 6, 17, 18, 22, 23, 30, 31, 33, 61 and 101 are related. Amendment No. 18 is an alternative to No. 17 and No. 23 is an alternative to 22. Amendments Nos. 6, 17, 18, 22, 23, 30, 31, 33, 61 and 101 may be discussed together, by agreement. Is that agreed? Agreed.

Mark Daly (Fianna Fail)
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Regarding the ruling of the Chair on our amendments-----

Denis O'Donovan (Fianna Fail)
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We are not at that point yet. We are on amendment No. 6 and the Minister has the floor.

Alan Shatter (Dublin South, Fine Gael)
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All of these amendments relate to the issue of reasonable expenses. Amendment No. 6 empowers the insolvency service to draw up guidelines in regard to reasonable living expenses for debtors. These guidelines are referenced in sections 24, 60(4), 95(4) and 85D, as inserted by section 146 of the Bankruptcy Act 1988, and will be required for the information of all concerned in the new processes.

The new section sets out the principles and policies which will set the parameters for the guidelines on living expenses. The insolvency service is required under subsection (2) to consult with the Minister, the Minister for Finance, the Minister for Social Protection and such other persons or bodies as the service considers appropriate or as the Minister may direct.

Subsection (3) sets out the matters the service is required to have regard to in the course of drawing up guidelines. These include poverty indicators as set out in Government publications on poverty and social inclusion, statistical information collated by the Central Statistics Office on household income and expenditure, the consumer price index and household composition. Subsection (4) commits the service to giving examples in the guidelines of expenses that may be allowed as reasonable living expenses and expenses that should not be allowed. Subsection (5) provides that the guidelines are to be published on the insolvency service's website. Subsection (6) provides that the insolvency service is required to issue guidelines on reasonable expenditure at intervals of no longer than one year. That will take account of changes that are occurring.

I will make reference to amendments Nos. 17 and 18. Both of these amendments seek to raise the limit for the amount of disposable income above that permitted for necessary household expenses from ¤60 to either ¤80 or ¤150. With regard to the ¤60 provision, that is the limit of the qualifying amount of money left to the debtor after meeting his or her reasonable household living expenses in the context of the legislation. I am loath to use this phrase but it is a simple way of expressing it: it is money surplus to what is identified as being required for reasonable household expenses. Certain assets that an individual would use in his or her daily life are expressly excluded from being regarded as relevant in the context of his or her circumstances when facilitating the write-off of debt. If somebody has money in excess of reasonable expenses, there is a point at which it is reasonable that it be used to discharge some of the debt he or she owes to creditors, who may be local traders, tradesmen or local credit unions. We have set that point at ¤60.

I emphasise to Senators that this legislation should not be seen in isolation from everything that is relevant to it. There are issues we must address to ensure the legislation does not have unintended detrimental consequences. It is essentially a balancing act. It is probably just as reasonable to argue that the net disposable income allowed to a debtor after reasonable household expenses should be ¤80, ¤150 or ¤160. These are subjective judgments to be made. We have made judgments based on the experience in other jurisdictions and it is important to remember in the context of moneys owing that those who are creditors are entitled to have moneys repaid to them. I highlight particularly the example of a credit union, which is dependent for its solvency and liquidity on the members of the credit union discharging their debts to it. It is of particular importance that if individuals have money that is in excess of what is regarded as reasonable living expenses, they be given some latitude, and ¤60 is the latitude we are proposing in these circumstances. I cannot accept the amendments proposed by the Senators.

It is our intention that the amounts will be kept under review and may be the subject of future revision by way of regulation. It will not be ¤60 into eternity, but that is the initial sum prescribed in the legislation to ensure we maintain a balance in terms of allowing individuals in major financial difficulty to retain certain assets and have available to them reasonable living expenses. They should be allowed something in excess of that, but after that their primary obligation is to meet their obligations to creditors. We regard the alternative figures of ¤80 or ¤150 proposed in the amendments as being inappropriate in the current circumstances.

I want to make reference to my amendment No. 22, which refines the provisions of section 24(5) to better set out how net disposable income is to be calculated in the context of an application for a debt relief notice. The existing provisions have been expanded to provide greater clarity in regard to this matter by making specific references to tax and other deductions. This amendment also sets out the way in which excluded and excludable debts, which we discussed yesterday, are to be treated in the calculation of net disposable income for the purpose of a debt relief notice.

Opposition amendment No. 23 would require the Minister for Justice and Equality to publish detailed guidelines defining reasonable household expenses for the purposes of the Bill. I thank the Senators for raising this matter. However, the Senators' amendment would impose a duty on the Minister to define a reasonable standard of living for each and every applicant for a debt relief notice. The Senators will recognise the inherent difficulties this proposal would present. The financial circumstances of debtors will vary greatly in the context of their own personal circumstances and the circumstances of family members who are dependent on them. This area will be addressed by the insolvency service in the context of the provisions that apply to its operations. I can assure the Senators that there will be no undue delay in addressing this aspect of the debt relief notice process. However, I believe it would be unwise to commit to a specific timeframe. The main approved intermediary for the processing of applications for debt relief notices will be the Money Advice and Budgeting Service, MABS, which is familiar with dealing with individuals in financial difficulty and particularly individuals who have low-level debt as opposed to debts of hundreds of thousands of euro. That organisation already has significant experience and knowledge regarding the devising of debt plans and is conscious of what is required by persons with debt difficulties in being able to retain enough income to provide adequately for themselves by way of reasonable living expenses and to provide for their dependants while at the same time addressing debt problems. The insolvency service will work closely with MABS and other organisations with expertise and interest in seeking to devise broad, realistic and workable guidelines for calculating net disposable income in the context of an application for a debt relief notice.

I do not believe, nor do I imagine do Senators, that we can arrive at an individually tailored figure for each of the applicants, potentially several thousand. It is neither practical, workable nor desirable because it is important that we do this through a form of guidelines. There will remain flexibility within the guidelines. In the context of individual circumstances, where individuals are in debt difficulties, issues may arise for which guidelines do not make provision. That is why it is important, as a general provision in legislation, that it prescribes that regard must be had to reasonable living expenses. I have no doubt the initial guidelines, over a period of having the experience of working the legislation, will be revised to take account of new issues and new circumstances that arise.

The situations and needs of individuals vary on a case-by-case basis and guidelines of a broad nature may be required. I will leave that to the expertise of the insolvency agency in the context of the consultative process in which it is engaged. I am opposed to amendment No. 23.

Amendment No. 30 is proposed by Senators Cullinane, Ó Clochartaigh and Reilly. The major approved intermediary for the processing of applications for debt relief notices, MABS, has the necessary expertise in devising, in respect of each individual application, the household items that are essential to the person's domestic requirements. The insolvency service will work closely with MABS and other organisations with expertise and interest in the area, and in that context it would not be wise to commit to a specific timeframe. I oppose amendment No. 30.

Amendment No. 31 proposes to amend the provisions of section 24(7) to include a specific reference at paragraph (d) to the guidelines in respect of living expenses to be issued pursuant to provisions of the new section 23.

Amendment No. 33 is essentially a drafting amendment and I hope it gives rise to no controversy. The proposal is to amend the provisions of section 24(14) to include specific reference to the guidelines in respect of reasonable living expenses, which are to be issued pursuant to the provisions contained in the new section 23.

Amendment No. 61 proposes to replace section 60(4) with new text that takes account of the provisions provided in section 23 with regard to reasonable living expenses. It is essentially a tidying up measure in the context of the content of section 23.

Amendment No. 101 proposes to replace section 95(4) with new text, which takes account of the new provisions provided in section 23 with regard to reasonable living expenses.

David Cullinane (Sinn Fein)
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I support the Government's amendments grouped with a number of others. I will speak to amendments Nos. 17, 23 and 30, which are in the name of the Sinn Féin Senators. Amendment No. 17 refers to subsection (2)(b), line 12, and proposes to delete ¤60 and substitute ¤80. The Fianna Fáil Party has a similar amendment that seeks to substitute ¤60 with ¤150. I expect the logic is the same. I listened carefully to the Minister's comments and he offered some comfort when he said the figure of ¤60 is not set in stone. The regulations will initially include ¤60 but it could be increased. This is obviously a measure of whether someone is entitled to a debt relief notice. Various criteria can be applied to people qualifying for the debt settlement measure. We do not believe the ¤60 figure is sufficient in terms of the maximum disposable income. That can be subjective but ¤60 is insufficient. We will press the amendment as we believe it should be higher. I took comfort from the Minister's initial response.

Amendment No. 23 proposes to insert the following on page 27, subsection (5), between lines 11 and 12: "(c) the Minister for Justice shall, no later than 30 days after the enactment of this bill publish detailed guidelines defining ?reasonable household expenses? for the purposes of section 24(5)(a) of this Bill?. The amendment is self-explanatory. The Bill entitles people to reasonable household expenses necessary to maintain a reasonable standard of living. For the debtor and his or her dependents, it is not clear what this constitutes. The Minister says it is up to the approved intermediary of the debt relief notice and in most, if not all, cases it will be MABS. We have the utmost faith in the organisation in dealing with these issues but the Minister has responsibility to lay down the criteria so that we know exactly what we are voting on and what provisions are being made for the criteria to be used. The criteria should be set out for the intermediary and it should not be up to the intermediary to do so.

Amendment No. 30 proposes to insert the following subsection in page 28, between lines 7 and 8: ?(7) The Minister for Justice shall, no later than 30 days after the enactment of this bill publish detailed guidelines concerning the household equipment and appliances that are reasonably necessary to maintain a reasonable standard of living for the debtor and his or her dependants, for the purposes of section 24(6)(c) of this Bill?. The same logic applies here. The Minister should set out the criteria and not leave it to the intermediaries.

Katherine Zappone (Independent)
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I have a number of remarks and questions, particularly on amendment No. 6, and what constitutes a reasonable standard of living and reasonable living expenses. The Minister refers to both in the Bill. My speech last week indicated that one of the very positive aspects of the Bill is that the insolvency service will prepare and issue guidelines on what constitutes a reasonable standard of living for debtors. "Reasonable" is a carefully chosen word and it is reasonable to suggest that it means a minimum standard and that it also refers to essential living expenses. If that is acceptable to the Minister, and I have seen him demonstrate reasonableness time and again, it is also reasonable to ask how one calculates these sums for unique individuals, their families and their circumstances. The Minister refers to this in respect of flexibility and the identification of guidelines.

I commend the Minister for including amendment No. 6, which provides guidance. He notes that the service shall have regard to a number of measures. Section 23(3)(e) refers to "the need to facilitate the social inclusion of debtors and their active participation in economic activity in the State". The Minister is providing guidance to the service that debtors must be left with an amount each month that enables them to have the capacity, resources, health and motivation to remaining engaged with life, to hope for better days, not to move towards hopelessness and to believe they will find new ways to make a living for themselves and their families.

It is good to think about the meaning of the metaphor, "make a living", as we contemplate the best kind of law that ensures debtors who use this new regime have access to a reasonable standard of living.

How should the service go about this task? While I commend the Minister for the amendment, it may not give enough guidance to ensure that debtors shall be treated with consistency and fairness across all the multiple circumstances of individuals and families.

I suggest the Minister consider adding a couple of components to amendment No. 6. The proposed section 23(3)(a) states that the insolvency service guidelines shall have regard to "such measures and indicators of poverty set out in Government policy publications on poverty and social inclusion as the Insolvency Service considers appropriate". I recommend that it should also have regard to other academic or complementary research on poverty, debt and particularly minimum income standards in Ireland. I am suggesting inclusions beyond simply Government policy publications.

The proposed section 23(3)(d) states the insolvency service guidelines should have regard to "differences in the size and composition of households". The amendment should also include: the physical health of all the individuals within the household; the employment status of the heads of household; caring, including child care and elder care, required by the household; and the location of the household, that is, whether it is in a rural or urban area. All of these elements impact directly on what constitutes a reasonable living standard and living expenses for each individual family.

Section 23(4) notes the need to ensure reasonable living expenses. It is crucial that the definition and - I am afraid I need help with the word - operationalisation-----

Alan Shatter (Dublin South, Fine Gael)
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What about modalities?

Katherine Zappone (Independent)
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Very good. I will take that one too. If I consider the Minister's amendment he may consider mine.

I am trying to suggest something that is grounded in an evidence base. Minimum income standards have been developed by numerous experts in different countries. In Ireland the work has been spearheaded by the Vincentian Partnership for Social Justice but has also been assisted by economists in Trinity College Dublin and the University of Loughborough in the United Kingdom. That work has produced data that is grounded in the lived experiences of our people and has the potential to be effective in defining reasonable living expenses. This research has been carried out over a decade using a rigorous methodology, establishing a consensus on what members of the public believe is a minimum standard that no individual or household should go below and effectively developing a method to establish the gross minimum income required in a particular household based on needs, not wants. The data developed over this period now covers the expenditure needs of 92% of households with children. It is recognised that the method behind the minimum income standard data is designed to answer the crucial question of how much it costs to reach an acceptable standard of living.

The alternative to using evidence-based measures of need and adequacy is to continue to use abstract ad hoc indicators grounded in theory and I know that is not at all the Minister's intention. That is why he has developed a number of references the service should refer to in developing its guidelines. I am simply suggesting and asking the Minister to consider incorporating in his amendment, particularly in the new section 23(3)(a), with the measures and indicators of poverty set out in Government policy, which is fine, those set out in minimum income standards for Ireland publications.

Ivana Bacik (Independent)
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Listening to Senator Zappone, I am struck by the complexity of this and the difficulty of coming up with a model that adequately addresses the very different living arrangements for different families and households when we talk about such a broad and encompassing concept as reasonable living expenses or a reasonable living standard. There really is not a one-size-fits-all solution.

Amendment No. 6 is a huge improvement. I am glad to hear Senator Cullinane saying Sinn Féin also supports the Government amendments on this issue. It was raised at the meetings of the Joint Committee on Justice, Defence and Equality, as the Minister is aware. A big concern for many of the organisations representing the interests of debtors, such as FLAC, is the question of the minimum protected income a debtor applicant should be allowed to retain. The committee was also told it was not then clear from the heads of the Bill what a reasonable standard of living would be. This uncertainty, they said, could seriously affect the effectiveness of the Bill. It is welcome to see, in amendment No. 6 which will be the new section 23, the very clear criteria for the preparation of guidelines by the insolvency service referring to all of the different indices of poverty, official statistics and so on.

The later amendments amend sections 60 and 95. They represent an important and welcome tightening up of what is currently in the Bill. Section 60 concerning the debt settlement arrangement is currently framed in a vague way, saying the personal insolvency practitioner shall have regard to any guidelines on reasonable expenditure and essential income for debtors published by the insolvency service. The new subsection 60(4), which will refer specifically to the new section 23 and to the specific guidelines to be published by the insolvency service, represents a clearer indication for people generally as to what a reasonable standard of living and reasonable expenses will be. This is welcome and addresses some of the concerns raised with the Joint Committee on Justice, Defence and Equality when we had hearings on the Bill.

Thomas Byrne (Fianna Fail)
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What the Minister proposes is a major step forward. It is, nevertheless, shocking that we are debating what constitute reasonable living expenses. During the debate on Second Stage, the Minister made an unfortunate reference to food, light and heat, or perhaps it was shelter, light and heat. I acknowledge that we have moved substantially beyond that, but there must be a way for us to devise a one-size-fits-all policy based on a percentage of income which would allow people who have a slightly higher income to spend more and to have different expenses. Those expenses may well be ingrained in their households. As a society, we have not been able to do that.

The banks are dealing with reasonable living expenses in their mortgage arrears resolution schemes. Will the Central Bank look at something analogous to this for the banks? I would object to that because it would put too much power in the hands of people to judge what are reasonable living expenses.

Sinn Féin Senators will be pressing their amendment on the question of disposable income. We will also press our amendment. This is an important point. The section, as drafted, will be extremely restrictive. I do not know who will qualify for the provisions of the Bill. I hope the section will allow people to get relief from their debts, but it is hard to see how. I will talk further on this when we debate the section. Nevertheless, we acknowledge that a step forward has been taken. I pay tribute to FLAC for pushing this issue and for informing public representatives of the issues. Of course, we knew the issues already. The Oireachtas has had a central role in pushing the Minister to put these provisions in a better way than heretofore.

Paul Bradford (Fine Gael)
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I welcome the Minister's amendments. I also appreciate what Senators Zappone and Cullinane have said. They present an interesting debate.

As the Minister said, there is always a creditor and a debtor. For every person who owes ¤1,000 or ¤10,000, possibly to a small shop, local supplier or small builder or garage, someone else down the chain is also owed money. We have a responsibility to be responsible.

We must ensure that the Bill's purpose, workings and definitions are not Scrooge like. Unfortunately, in our present national financial straitjacket they cannot be Santa Claus-like either.

It is a question of trying to strike that balance. In fairness to what the Minister is doing in amendment No. 6, the language is quite open and inclusive and it allows for the flexibility we would all wish to see in the calculations. It also allows for ongoing review, because circumstances can change. Of course, we would like the ¤60 be ¤80, ¤150 or whatever, but we must live within the sad economic reality of our time and be responsible in that regard.

The most interesting comment I have heard in the past hour was what Senator Zappone said about giving people a reason to hope, to live and to get up in the morning to work and try to improve their situation. It is difficult to enshrine that type of thinking in the language of the Bill. However, at least the passing of this legislation will convey the message that we are putting structures in place to provide that hope. Where people enter into these arrangements we should see it not as entering into a negative situation, but a positive one. That is the only offer of hope we can put on the table. It means sitting down with people, recognising the financial mess they are in, trying to put some semblance of purpose to their arrangements, trying to chart a route to progress and a future and giving them support. I would love if we could include the phraseology of hope in legislation, but we are not Barack Obama and it would be difficult. However, the new amendments tabled by the Minister provide for a better sense of purpose than was there previously. It is as far as anybody can fairly expect a Minister to go. The security being provided is the flexibility and the ongoing review process. I am happy with that.

I acknowledge what Senators Cullinane and Zappone have said and realise their comments were genuine. However, the reality of our financial situation must be recognised as well.

Aideen Hayden (Labour)
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This has been an issue of great concern in the voluntary sector. I compliment FLAC not just on the work it has done on this matter but also on its general contribution to this legislation. I also acknowledge the work of the Vincentian Partnership for Social Justice in defining what constitutes reasonable living expenses.

I accept Senator Bradford's point. Obviously there are complex rights involved, including the rights of the debtors and of the creditors. However, this aspect of the legislation will not just guide activities under this legislation but will be a wider guidance to the actions of the banks, in particular, in how they approach dealing with the type of settlements the Minister is hopeful they will offer to debtors, given that they will try to avoid having people going to the personal insolvency service. It is, therefore, of wider interest than simply in the context of this legislation.

I was very pleased to see the amendments put forward by the Government. As Senator Zappone said, it is necessary to facilitate the social inclusion of debtors and their active participation in economic activity in the State. In that context, there is a genuine fear among the wider group of organisations dealing with this matter that what will be adopted will be the lowest common denominator, in other words, the social welfare assistance rate. The clear message must be conveyed that this is not the case. I agree with Senator Zappone that when the Minister sets out the bodies that must be consulted it would be appropriate to include the wider voluntary and academic sectors and to consult other indices on minimum income standards and so forth. I would not favour it being debated that what constitutes reasonable is the social welfare assistance rate, which we all accept does not constitute a reasonable standard of living.

Alan Shatter (Dublin South, Fine Gael)
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I thank the Senators for their thoughtful contributions on this important issue. I will comment first on what Senator Hayden said. Reasonable expenses in this context should not be, and it is not intended to be, simply the social welfare rate to which somebody might be entitled. Somebody who enters into a debt settlement or personal insolvency arrangement will be an individual who has some stream of income other than social welfare. If they do not have a stream of income or other capital resources, they will not be in a position to enter into an arrangement which would ensure that over a period of years they would discharge the agreed portion of their outstanding debts with creditors. It simply would not work. Where individuals are in debt and have a minimal income or who are on social welfare, the debt relief notice might be the mechanism. However, that is a separate issue.

In dealing with reasonable living expenses let us start from a perspective where what is reasonable for one individual might not be reasonable for another. The terminology is designed to fit into the circumstances Senator Zappone mentioned. An individual might have particular health issues or there might be health issues for a child who is dependent on that individual. There might be a range of other issues. It might not be as expensive to live in one part of the country compared to another, but one cannot prescribe a map which states that reasonable living expenses is X amount in Dublin and Y amount in Leitrim. When it comes to the personal insolvency practitioner making a presentation to creditors seeking to bring about a resolution or in the context of a debt relief notice or the money advice and budgeting service performing that function, ultimately the individual circumstances of each individual will have to be dealt with and addressed. All that can be provided here is guidance. It is not that this is definitively what X should get, it is simply guidance.

With regard to the issues Senator Zappone raised about other sources of information that are available for the work the insolvency agency may do, I draw her attention to the fact that what is detailed in section 23(3) in amendment No. 6 is not exclusive. Subsection (3) states that in preparing guidelines to be issued under subsection (1) the insolvency service "shall have regard to" a series of things that is listed. However, the preceding subsection (2) states that before issuing guidelines under subsection (1) the service shall consult with the Minister for Justice and Equality, the Minister for Finance, the Minister for Social Protection and "such other persons or bodies as in the Insolvency Service considers appropriate...". It is open to the insolvency service to consult with a broad range of bodies and individuals and to consult learned articles and research of relevance to its tasks. The insolvency service has broad discretion in dealing with this area.

This is not entirely new. In the context of bankruptcy in Ireland, for the small number of bankruptcy petitions that take place each year, regard must be had to the reasonable living expenses. However, little is known about bankruptcy petitions because there are so few of them and there are no major written judgments that give substantial insight into them. In a sense, this is a new issue because it will affect far more people in broader circumstances. Clearly, it will be open to the insolvency service, under these provisions, to look at how this concept is interpreted and applied in other jurisdictions.

Northern Ireland and England have a mechanism similar to our debt relief notice and debt settlement arrangement, although not the personal insolvency arrangement, and have to apply similar factors in determining what are reasonable living expenses. There is experience from a neighbouring jurisdiction and other jurisdictions. This is not inclusive. It occurred to me that we should not try to make up an additional list of a whole series of bodies or research because there is so much of it, some of which is international as opposed to domestic, and much of it is relevant to this area. To ensure that the insolvency service does not feel in any way confined in considering how to construct the guidelines and what information should be contained in them, I will consult the Parliamentary Counsel as to whether in subsection (2) we should refer to such other persons, bodies or sources as the insolvency service considers appropriate, etc. I am not sure if it is entirely necessary but it makes it clear they are not confined to dealing with individuals and bodies, be they voluntary or statutory. Arising out of this discussion we should give consideration to a reference to sources. I hope that would cater for the concerns expressed by Members.

This is a difficult area. It is important that individuals in financial difficulty who are in employment and who have a stream of income, or who are self-employed and have a stream of income, have some incentive to pay their debts. One cannot reduce them to an income level they would get if they were unemployed and in receipt of social welfare because if that were to happen they might as well petition for bankruptcy, render themselves bankrupt and get rid of the debts over a three-year period. There would be no incentive to work. On the issue of individual circumstances and a reasonable standard of living and reasonable living expenses, individuals must be able to retain a reasonable sum from the money they are earning before it goes to discharge debt because there has to be some incentivisation in the context of the personal insolvency and debt settlement arrangements. With regard to the debt relief notice, the amount is prescribed as ¤60 above one's reasonable living expenses. This is an issue that must be dealt with carefully. There is no monopoly of wisdom. There will be a need for personal insolvency practitioners to engage with creditors and debtors and for the insolvency service to keep a watchful eye on how this is working in practice in order to ensure workable common-sense arrangements are put in place. Creditors have an interest in getting all, or at least a portion, of their debts repaid and have an interest in the debtor being at work, getting a benefit from working and paying off his or her debts. In the middle of all that, a happy medium has to be found. It will vary from individual to individual, depending on personal circumstances, family, debt levels, health and a range of other issues. This was a useful and important discussion and I thank Senators for their contributions.

It will not come as a surprise to Senators Cullinane and Byrne that I cannot accept the amendments. As I have given the reasons in the context of specific financial figures I will not detain the House by repeating them.

David Cullinane (Sinn Fein)
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I thank the Minister for his responses. We believe the Government amendment, No. 6, has gone some way towards alleviating some of our fears. Senator Paul Bradford mentioned the word "hope" a number of times. I sincerely hope the mechanism for debt relief notices will work, but we have to be realistic in terms of how they will apply.

Amendment No. 17 refers to section 24(2)(b), which provides for a net disposable income of ¤60 per month; that is less than ¤15 per week. The Minister mentioned a workable solution and common sense. We do not believe that ¤60 per month is sufficient and we have to reinforce that point. A recent Irish League of Credit Unions report indicated that many people have less than ¤100 of disposable income. That caused consternation and much concern, with people asking how anyone could survive on less than ¤100 of disposable income per month, yet ¤60 per month is the amount provided for in the Bill for those subject to a debt relief notice.

The Minister mentioned other jurisdictions in the context of reasonable household expenses. The cost of living in the State is much higher than in some of the countries he mentioned. If the cost of living is higher the thresholds should be higher for net disposable income and for reasonable household expenses. We have had a number of debates on equality-proofing and poverty-proofing. While those issues are important, the Minister cannot deal with them in this Bill. I do not claim to have a monopoly of wisdom in this area, but in all the decisions we make we need to find some mechanism on which the political establishment can agree in terms of measuring poverty. Some countries have clear equality-proofing and poverty-proofing mechanisms in place. Amendment No. 6 refers to such measures and indicators of poverty set out in Government policy publications on poverty and social inclusion and it also refers to the consumer price index published by the Central Statistics Office.

I said initially that I took some comfort from the Minister's initial contribution when he said that the ¤60 per month of disposable income would not exist into eternity and could be changed. My question is how and when. If it is changed, what formula will be used to arrive at a new figure? If it is to be ¤60 per month it is reasonable for us to ask for how long it will be ¤60. Will the amount be reviewed on an annual basis? What formula will be used? Will it be the consumer price index? If there are to be changes to the figure at some point in time, perhaps the Minister can allay some of our fears by setting out how they would be calculated.

Denis O'Donovan (Fianna Fail)
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Does the Minister wish to expand? He has covered the issue substantially.

Alan Shatter (Dublin South, Fine Gael)
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I will respond briefly. If the figure of ¤60 per month for disposable income is to be changed, it will be done by regulation. There is a little confusion in the context of this issue. The ¤60 is ¤60 that is left after one has the money required for reasonable living expenses. I admit it is a monthly sum. In the context of the legislation - I am not comfortable using this language because I am conscious that anyone caught in this situation is in great financial stress - it is much more generous to debtors than similar legislation in other jurisdictions, although I am sure no debtor will consider he or she is being generously dealt with.

In a sense they are because the mechanisms are designed ultimately to write off debt for which they would otherwise be liable. In the general provisions relating to debt relief notices, assets to the value of ¤6,000 are not even regarded as assets for the purposes of determining eligibility for the debt relief notice. Some of those assets would be taken into account as being assets in other jurisdictions. While I appreciate the Senator's concerns, as I said and believe he agreed with me, none of us professes to have a monopoly of wisdom in this area. We believe the structure provided for in the Bill is the appropriate one for dealing with these issues.

Denis O'Donovan (Fianna Fail)
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Amendments Nos. 7 to 11, inclusive, have been ruled out of order.

Thomas Byrne (Fianna Fail)
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On a point of order, I have two queries. I understand that the Seanad Standing Orders do not have a provision ruling out matters as charges on public expenditure. At the end of the day only the Dáil can approve them. Senator Daly has correspondence from the Seanad office on that issue. He has left temporarily and taken the correspondence with him but he will be back shortly. Even if that provision was in place, I do not consider that these are charges on the Exchequer. This is putting in place a process and these types of amendments have been routinely accepted in other matters.

Denis O'Donovan (Fianna Fail)
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The Senator has made his point. Unfortunately, under Standing Order 41, my hands are tied. It states: "An amendment to a Bill, which could have the effect of imposing or increasing a charge upon the people or upon the revenue, may not be moved save by way of Government amendment." Furthermore, the Cathaoirleach ruled on this matter yesterday and I see no reason to change that decision. Unfortunately, my hands are tied.

Alan Shatter (Dublin South, Fine Gael)
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This amendment makes clear that the debt relief notice process concludes when the debtor's application for debt relief notice is withdrawn, deemed to be withdrawn or refused in accordance with this chapter, or when the debt relief notice issued in respect of that debtor ceases to have effect in accordance with this chapter. The text as presented in the Bill is not sufficiently clear and requires further refinement for the avoidance of doubt.

Denis O'Donovan (Fianna Fail)
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Amendments Nos. 15, 16, 19 and 20 are related. Amendment No. 16 is an alternative to amendment No. 15 and if amendment No. 15 is agreed to, amendment No. 16 cannot be moved. Amendment No. 20 is an alternative to amendment No. 19. Therefore, amendments Nos. 15, 16, 19 and 20 may be discussed together.

David Cullinane (Sinn Fein)
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I move amendment No. 15:

In page 26, subsection (2)(a), line 10, to delete ?¤20,000? and substitute ?¤30,000?.

While we have some concerns over certain aspects of the Bill, we will be supporting it. We recognise the new mechanisms, including the debt relief notices, will provide some comfort and hope to people. The Minister is trying to strike a balance between the rights of the debtor and the creditor, as he clearly explained in his previous responses. However, it is also reasonable for us to point out ways in which we believe the Bill can be strengthened. In that vein we are trying to be helpful and take on board suggestions made by outside bodies that have significant expertise in the area. We believe those views should be considered.

Thomas Byrne (Fianna Fail)
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I know of a person who had an accident and was unfortunately uninsured and owed the Motor Insurance Bureau of Ireland ¤50,000. He is unemployed and given that there is little prospect of him paying this, he should be subject to a debt relief notice. I suspect his car, which he needs to do the bit of work he does when he goes on and off the dole, is worth more than the ¤1,200 provided for in a different section.

Limiting the qualifying debts to ¤20,000 will exclude a large number of people. Amendment No. 16 proposes to increase that to ¤50,000 which we believe is far more reasonable and brings it into the lower level of the jurisdiction of the High Court. Some people are subject to High Court judgments and yet are completely penniless. We do not want to send them into bankruptcy if we can avoid it. This limit is set very low and it is difficult to imagine that many people will benefit from this. I hope people will be able to get relief from their debts. However, given it is so restrictive - section 24 is entirely couched in negative terms, which we will discuss later - I wonder how beneficial it will be to people. I will be pressing both our amendments in this area. I believe we need to broaden the criteria to allow people in this type of debt to get on with their lives.

Paul Bradford (Fine Gael)
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I suspect the amendments will not be accepted. There is an aspect of the debt relief notice to which we should give some consideration. Given the ¤20,000 limit, personal insolvency practitioners will almost certainly be excluded from any dealings with the category of people involved. As the sum of money is modest, there is no possibility of any money being available to remunerate a personal insolvency practitioner for working through the problems of these particular debtors. The money advice and budgeting service or another taxpayer agency will inevitably be funding whatever administrative work might be required. The entire cost of administering these solutions will fall on the taxpayer. If the limit was slightly higher, some of the administrative work on the processing of the relief notice might be carried out by a personal insolvency practitioner with a possible resultant saving to the State and to MABS, which otherwise would be doing the work.

While I will certainly listen to what the Minister has to say, we need to accept that the ¤20,000 limit, being so modest, is corralling the debtors in that category straight into the MABS route and there will not be the assistance or involvement I would expect of the outside personal insolvency practitioners who, because at that ¤20,000 limit, would not wish to be involved in the resolution process.

Alan Shatter (Dublin South, Fine Gael)
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I thank the Senators for their contributions. I have great respect for the work the free legal advice centres have done in this area, and their commentary on it. I suppose I should make a declaration of interest in that many years ago I was a director of a free legal advice centre. I was chairman of the free legal advice centres and, in their early days, I was engaged in much of the campaigning in which they are now engaged on a broad range of issues.

This is a question of context and balance. If we look at our neighbouring jurisdiction in Northern Ireland, the mechanism similar to the debt relief notice only applies to debts of up to £15,000. That is also the position in the other parts of the United Kingdom. Our debt relief notice mechanism, if one works out the currency differentiation, actually goes to a higher sum, at ¤20,000. One must remember what is the effect of a debt relief notice. It protects persons who have debts of ¤20,000 or less from being sued on foot of those debts. It creates the possibility that after three years, without the person having paid anything if his or her financial circumstances have not improved during the supervision period, the debts are simply wiped out and they walk away from them.

For every debt that is wiped out from which persons walk away there is a creditor, someone owed money. It might be the local shop that allowed a family or an individual in difficulties to run up a bill of ¤500, ¤600, ¤700 or a couple of thousand euro for household goods. It might be the local plumber or electrician who came around to do a little work. It might be the local credit union that is owed ¤3,000 or ¤4,000. There is a range of persons whose lives are impacted by an individual's incapacity to meet his or her financial obligations. Individuals find themselves in those circumstances for many different reasons, some because something unfortunate has happened in their lives such as they have had unexpected difficulties and they always assumed they would be in a position to make payments. Some find themselves in that position because they simply incur a debt with no intention of making payments and have no thought for the impact on others. Let us not be naive about it. There are such persons who, if they can get away with making payments due to persons for work done on their behalf, for services provided or for products supplied, will do so. We must provide a balance. We cannot provide incentives to individuals to run up a large amount of debt knowing that if they do so, after three years they can simply walk away from it, wash their hands of it and damn the consequences for those affected by it.

It is important to achieve a balance and we believe we have achieved that balance in the provisions. As I stated, I do not like the phrase but, in the context of debtors, we are being more generous than is the case in similar legislation in a number of other countries. For those reasons, I cannot accept the amendments that have been proposed.

Paddy Burke (Fine Gael)
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Amendment No. 16 cannot be moved because a decision has been taken on amendment No. 15.

Thomas Byrne (Fianna Fail)
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The House might have thought the previous amendment was not sufficient and that we need to go higher.

Paddy Burke (Fine Gael)
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The decision has already been made.

David Cullinane (Sinn Fein)
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I move amendment No. 17:

In page 26, subsection (2)(b), line 12, to delete ?¤60? and substitute ?¤80?.

Paddy Burke (Fine Gael)
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Amendment No. 18 in the name of Senator Darragh O'Brien cannot be moved.

Darragh O'Brien (Fianna Fail)
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I move amendment No. 20:

In page 26, subsection (2)(c), line 14, to delete ?¤400? and substitute ?¤1,000?.

Paddy Burke (Fine Gael)
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Amendments Nos. 21 and 32 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Alan Shatter (Dublin South, Fine Gael)
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Amendment No. 21 proposes the deletion of section 24(2)(f). This deletion arises as a consequence of amendment No. 32 in regard to the proposed deletion of the reference in section 24 to the treatment of goods on hire purchase. Amendment No. 32 proposes the deletion of section 24(8), which sets out the treatment of goods on hire purchase in the context of the debt relief notice process. Having considered the comments of Senator Norris on Second Stage on the matter and comments received from other relevant organisations and having consulted the Parliamentary Counsel, I have decided to remove the provision from the Bill so as to offer great flexibility to debtors. I have been advised by the Parliamentary Counsel that the matter can be left to the provisions of the Consumer Credit Act 1995 and there is no requirement for an explicit provision in the Bill.

Ivana Bacik (Independent)
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I welcome the amendments and know Senator Norris would do likewise. It is good to hear that the Minister has taken into consideration comments made on Second Stage, as well as comments from other groups, and consulted with groups between Second and Committee Stages. I am glad the amendments are being made to give the flexibility that has been described.

David Cullinane (Sinn Fein)
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We also welcome the amendments.

Alan Shatter (Dublin South, Fine Gael)
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I thank Senators for being so welcoming.

Paddy Burke (Fine Gael)
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Amendments Nos. 24 and 25 are related and may be discussed together, by agreement. Is that agreed? Agreed.

David Cullinane (Sinn Fein)
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I move amendment No. 24:

In page 27, subsection (6)(a), line 14, after "its" to insert "net".

Amendment No. 25 is: "In page 27, subsection (6)(a), line 15, to delete "irrespective of" and substitute "taking in to account"." The current wording means the assets that can be taken into account include properties regardless of any mortgages or charges upon the house. We do not agree with that; such things should be taken into account. For example, a house may be in negative equity and people may be struggling to pay for it. There is logic in this amendment and we look forward to the Minister's response. We will press amendment No. 24.

Alan Shatter (Dublin South, Fine Gael)
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I will try to dissuade the Senator. I know the amendment is well intended but I am not sure of its relevance in these circumstances. For example, I am not sure what effect the proposed additional qualification with regard to the market value of an asset or the deletion of "irrespective" in dealing with a mortgage or charge is designed to achieve in the context of a debt relief notice. I remind the Senator that this seems to be directed at the debt relief notice.

The current description is quite clear in that it encapsulates market value irrespective of whether the asset in question is subject to any charge. In any event, where the permitted qualifying asset level in this process is ¤400, apart from the excluded assets, I am not sure this issue is a significant consideration. To make the changes proposed by the Senators would completely alter the nature of the debt relief notice process and potentially qualify an applicant even where he or she had a large property in negative equity. That is not the intention of the debt relief notice, which is far more confined.

David Cullinane (Sinn Fein)
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I move amendment No. 25:

In page 27, subsection (6)(a), line 15, to delete "irrespective of" and substitute "taking in to account".

Thomas Byrne (Fianna Fail)
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I move amendment No. 26:

In page 27, subsection (6)(c), between lines 31 and 32, to insert the following:"(ii) one item of jewellery of ceremonial significance of a value not to exceed such amount as may be determined by the Minister by regulation;".

Alan Shatter (Dublin South, Fine Gael)
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We will have something on Report Stage.

Thomas Byrne (Fianna Fail)
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I am happy to hear it, as the issue is worth discussing. It would be relatively common for somebody to have an engagement ring in excess of the asset value. That could be a broken person, as the person in question would have been doing okay five years ago, like many people in the country, but could now be almost without assets and have hardly any income. We cannot take an engagement ring from a woman in those circumstances. I am sure the Minister, like me, can think of numerous women in his constituency who may be part of a broken marriage or in a relationship in which both people have lost jobs.

We must allow them have a debt relief notice and not include an engagement ring for the purposes of determining whether they can qualify for it. It is symbolic and would also have some practical effect but I welcome what the Minister said. I was hoping something like that would be proposed. I look forward to Report Stage but if the Minister is so willing, he might give me more detail.

Alan Shatter (Dublin South, Fine Gael)
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In amendment No. 26 the Senator proposes to exempt one item of jewellery "of ceremonial significance". First, while I understand the sentiments behind his proposal, we would all recognise there are difficulties with seeking to discern ceremonial significance, varying it as it may be from person to person. Second, on the decision as to the monetary value, there is no monetary value of any description prescribed by the Senator in this proposal-----

Thomas Byrne (Fianna Fail)
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We will allow the Minister decide.

Alan Shatter (Dublin South, Fine Gael)
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-----nor does he tell us what he means by "ceremonial significance". I have no idea what particular ceremony the Senator has in mind. There could be a series of different ceremonies for which people may want to use some item of jewellery, nor is the nature of the item clear based on this proposal. Somebody might think a large ring hanging out of their nose was of ceremonial significance.

Thomas Byrne (Fianna Fail)
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Honest to God, we might as well call a halt to the debate if that is the way the Minister is going to proceed.

Alan Shatter (Dublin South, Fine Gael)
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We are dealing with legislation and the reality is we have to define what we are talking about, but I agree with one aspect of this. We had a long debate on this issue in the other House. I do not believe that modest items of jewellery should require to be sold unless a debtor wished to do so to repay debt. The sad reality over the years has been that individuals have pawned items of jewellery to pay debt. That has been part of the backdrop to this country and many other countries for many decades. I do not believe modest items of jewellery should require to be sold. I am also of the belief that creditors would be unlikely to seek the surrender of items of jewellery of modest value, whether they have ceremonial, family or other significance, in an enforcement action prior to any application for the granting of a debt relief notice. The experience in other jurisdictions is that people are not asked to have modest personal items valued, and I do not believe that was intended or envisaged.

There is an argument for suggesting we might be better off being silent on that issue, but, on the other hand, if someone has something of substantial value, say, ¤200,000 or ¤300,000, and they want to have their debts written off, it is not reasonable, fair or appropriate that we say that is of ceremonial significance and they can keep that. There are some individuals who during the course of the first part of the 2000s spent extraordinary sums of money on items of jewellery. Some of them felt the need on occasions to advertise that in the social columns of the Sunday Independent by ensuring press releases were issued about that to boast how much they had spent on whoever happened to be their latest partner. Individuals of that nature have found themselves in a position of not paying creditors, and let us remember what we are talking about. If, for example, as a husband I personally became bankrupt or insolvent, jewellery I have given to my wife does not fall into my insolvency. If my wife became insolvent, it may fall into her insolvency. This is not fully understood but if, say, an individual who has substantial debt has jewellery worth ¤300,000, ¤400,000 or ¤500,000, and it may be antiques they have collected or some very large item of jewellery they were given, it is unreasonable to say they can keep that and their creditors need not be paid out of that. Where someone does have something that is modest, however, and has family significance - I would emphasise family or personal significance as opposed to ceremonial significance as stated in the amendment - most creditors would not even explore that issue and it should not fall into this.

In the context of the various urgings being made upon me, we have been considering the complexities of this issue and how we would draft it to ensure it applied to something modest and would not act as a catalyst to include modest items currently ignored being brought in to require people to use them to discharge debt. I am willing to consider the possibility of excluding a single item of jewellery of what I would describe as family significance but not necessarily ceremonial significance. It may be a modest piece of jewellery such as a ring, the engagement ring the Senator mentioned or something someone has inherited from a deceased relation. It would be something of family significance to the individual concerned or of general significance to other members of the family.

I said in the other House that we would reflect on the value. I do not want to give the wrong information but I asked one of the Senator's Fianna Fáil colleagues in the other House the values they had in mind and a figure of ¤400 to ¤500 emerged from that exchange. We are considering a value in the region of ¤500 for a single item of jewellery of family significance to fall into this but I could not accept the Senator's amendment because, first, there is no financial limit on the item to which he is referring. Second - I will not make my previous reference because I will start laughing again and get into trouble - there is no indication of what is meant by "ceremonial". People wear jewellery on strange anatomical parts nowadays and some of those I will not investigate in this House.

Thomas Byrne (Fianna Fail)
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It is unfortunate that the Minister has chosen to reduce this debate to the level of the ridiculous. We are talking about people who have debts of less than ¤20,000, people with a disposal income of less than ¤60 a month and people who have other assets of ¤400 or less per month. They are not hoarding the crown jewels in their attic. They are broken people. They may have an engagement ring they bought on a credit card a few years ago that may be worth substantially more than ¤500. It might be worth ¤2,000 or ¤3,000 or up to ¤5,000. These are people whose marriages may have broken up and that is all they have left. We should examine this issue in a realistic way. We are talking about one item of jewellery of ceremonial significance and for the Minister to refer to nose rings and other types of rings is ludicrous and shows a lack of serious intent. Those comments should be withdrawn. I intend to press this amendment. I do not know whether other colleagues have anything to add but the amendment is very important. These people are broken and we should not take every last personal item from them before they can avail of a debt relief notice.

Feargal Quinn (Independent)
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I understand the reason Senator Byrne is putting forward this amendment but I also understand the explanation the Minister has given. This issue is not easy to resolve but the Minister's comment that he will try to resolve it on Report Stage satisfies me because I can understand the difficulty. There was an article about a Chinese item in the newspaper yesterday that was expected to be sold at an auction in the midlands for between ¤2,000 and ¤3,000, and if I remember correctly it was sold for ¤650,000. Clearly, it is not easy to solve this problem. I am sure that is not what Senator Byrne has in mind. He has explained the issue very well, but we should leave it for Report Stage to see if the Minister can solve it.

David Cullinane (Sinn Fein)
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To be fair, there is not a huge difference between the take of the Minister and Senator Byrne on this issue. I do not believe the proposers of the amendment had items of the value of ¤100,000, ¤200,000 or ¤300,000 in mind. It was the engagement ring and other significant items of jewellery the Senator had in mind.

I welcome the clarification from the Minister. His use of the term "family significance" is better and I welcome it. We will discuss the matter on Report Stage but I would have some concern about the figure of ¤500. It may be some time since the Minister bought an engagement ring but in recent years one would not get much of a ring for ¤500. It would cost significant amounts upwards of that figure.

A figure of ¤2,000 may be more relevant. A sum of ¤500 is too low and I ask the Minister to bear that in mind if he is framing an amendment on Report Stage.

Ivana Bacik (Independent)
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I agree with Senators Cullinane and Quinn and believe there is a middle ground. The Minister has very fairly indicated he will come back to this point. I appreciate what Senator Byrne is attempting to do but all sorts of different items may have sentimental significance for people and may be of value. There is no point in focusing on an engagement ring or trying to shape an amendment that applies only to that. We would be better off trying to come up with a wording that captures items of value in other ways. Perhaps it is not jewellery but items can be described in a different way and yet have the same sentimental and emotional attachment as the engagement ring described by Senator Byrne. Many items could be covered in a provision such as this. I know what he is trying to do but there is a better way of doing it.

Paul Bradford (Fine Gael)
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I agree with Senator Bacik. In the Minister's work between now and Report Stage, perhaps he can consider a provision to protect jewellery or an item of family significance. We could write into law that the item could not be disposed of during the period of the financial arrangement if it is of sentimental or emotional value to the person or the family. I am not sure who came up with the suggestion of the sum of ¤500.

Feargal Quinn (Independent)
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Some people got engaged recently.

Paul Bradford (Fine Gael)
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I fear they could confirm that a ring worth ¤500 might not go down too well.

Paddy Burke (Fine Gael)
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Did the Senator find that?

Paul Bradford (Fine Gael)
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We have time between now and Report Stage to reflect and come back with a compromise. This portion of the debate in the other House got more media coverage than the more pertinent point of the legislation. Let us try to get this away from the media and into law as soon as we can.

Alan Shatter (Dublin South, Fine Gael)
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Senator Byrne should be less excitable about this. If only he showed that level of excitement about seven or eight years ago, when his party was destroying the country, I would be more impressed. It does not matter what figure I put in, no one will be happy. This type of provision generally does not exist in insolvency legislation in other countries. People in debt are stressed and in difficulty and leading difficult lives. I hope not all of them are in the circumstances the Senator seeks to portray. Fortunately, they are not all people whose marriages have broken down. We should not get carried away with ourselves on this issue.

This concerns debt relief notices. Let us remember what it does. It applies to people of modest backgrounds, with limited income and limited resources. We cannot have a provision that provides, without any financial limits, that some open-ended item of jewellery of ceremonial significance is exempt from being of relevance to their debts in circumstances in which the application is that the person holds up to ¤20,000 debt and that the creditors should receive nothing. The debt relief notice gives people a free pass three years later. They are free of all their debts and their creditors are left carrying them. I hope they will fruitfully get on with their lives and will not find themselves in debt again. In the debt relief notice provisions, in the context of assessing the value of assets, we give details on a range of items that are excluded and will not be taken into account. The total value of these is ¤6,000 but we cannot keep on constructing additional bricks to increase the value of assets. At some point we get to a position where it is grossly unfair to creditors owed modest sums of money that individuals who owe them money can retain assets of value.

I keep wanting to remind people that, when it comes to debt relief notices, we are not talking about banks who lent ¤500,000 to people to purchase houses currently worth ¤200,000. We are talking, by and large, about people who have run up credit card debt and money owed to credit unions, local shops and local tradespeople. It may be that the milkman has been delivering milk for a number of weeks, has not been paid, is owed ¤200 or ¤300 and the person is saying there will be no payment. Let us be realistic about this.

In the context of producing a proposal and with regard to an item of family significance, it cannot be an item of substantial value. Everyone can work out that what is substantial to one person is insubstantial to another but we are dealing with modest circumstances. This is a provision that generally does not exist in other jurisdictions and if we propose an amendment, someone else will propose that the value should be higher. In dealing with Senator Byrne's colleagues in the Dáil, there was a dialogue about something to the value of ¤400 or ¤500. The Deputies did the same thing by tabling an amendment with no value attached to it. I said that in no circumstances could this be accepted. We will try to deal with this is a commonsense way.

All of us - I include myself - have enormous sympathy for individuals caught in a debt spiral while leading difficult lives. Let us not forget that this legislation is not about persecuting them as some Members of the Houses of the Oireachtas would like to portray it. The way this was dealt with by the media and by some Members of the other House was quite bizarre. The legislation is providing debt amelioration for people who have run up debts. This is an alternative to bankruptcy and not everyone who has run up debt is in debt because of unfortunate circumstances over which they had no control. Significant numbers of people are in debt because they lived as if there was no tomorrow. No matter how high their incomes, they spent every last penny. People get into debt because they gamble or because they have a drug addiction. Where there is addiction, it is another issue to be addressed but there are a series of reasons people get into debt. There are innocent creditors whose businesses collapse and whose jobs are lost because those who owe them money do not pay. Jobs are lost in this country every day because small businesses that have given credit to or supplied goods to people suddenly find the people who owe money will not pay. Not everyone in debt is meritorious. Their circumstances may be sad but not everyone is innocent and meritorious. In order to maintain balance in this debate, some people are in debt because of the manner in which they conduct their lives. Others are not in debt because there were a great deal more responsible.

I do not want this portrayed as an attack on people in debt. Too many people are in debt through no fault of their own and through unfortunate circumstances that they could never have anticipated, which is a great tragedy of the economic and fiscal difficulties into which this country was taken by the time we got to 2008. That is a great tragedy and it has had an impact on tens of thousands of people who never in their lives anticipated they would find themselves in financial difficulty. Far too many people are in this category. Let us not be hypocritical and over-excited about this issue in the context of responsibility that rests within Senator Byrne's party for where we now find ourselves and the reason we need this legislation. It is to provide mechanisms to facilitate people in financial difficulties to work their way through their debts without going into bankruptcy and, more important, in the context of the personal insolvency arrangement, without losing their homes. Such people would never have anticipated finding themselves in difficulty when they purchased their homes in the early 2000s.

Thomas Byrne (Fianna Fail)
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I understand this is a "no fault" insolvency Bill. I do not know why the Minister refers to meritorious versus non-meritorious debtors. I understand no judgment is made, as in our divorce legislation, for example.

There is a value limit. It is to be determined by the Minister. He has repeatedly said there is not a value limit. There is. The Minister can determine it. This is provided for in the amendment.

The Minister questioned my example and said that, thankfully, not everyone's marriage breaks down. Thankfully, not everyone's does. The example I gave was of someone known to me who fits the category, except possibly with regard to jewellery. Previously, I gave an example of someone who would benefit from our amendment. These are real-life examples. I say to those people who complain about politicians holding clinics and meeting citizens that it is from those clinics that we learn what is happening in people's lives and how legislation can affect them and help them or not, as the case may be.

I say these things to rebut some of the points the Minister makes. I do not wish to delay the debate but this is a serious matter and the Minister dealt with it in a very trite manner.

Paddy Burke (Fine Gael)
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Amendments Nos. 27 to 29, inclusive, are related. Amendment No. 28 is an alternative to amendment No. 27. Is it agreed that amendments Nos. 27 to 29, inclusive, be discussed together? Agreed.

Thomas Byrne (Fianna Fail)
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I move amendment No. 27:

In page 27, subsection (6)(c)(ii), to delete line 35.

Maurice Cummins (Fine Gael)
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Not yet.

Paddy Burke (Fine Gael)
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It was agreed by the House yesterday that the debate would adjourn at 1.30 p.m.

Thomas Byrne (Fianna Fail)
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We will move on with that threat from the Leader hanging in the air. It is unfortunate, because we are not filibustering. It is a long Bill. In fact, there should probably be another Second Stage debate on the major parts the Minister is adding to the Bill. However, that is another matter.

I can anticipate the criticism the Minister will give of this amendment, which merely deletes the value of the motor vehicle. A car worth ¤1,200 or less is a banger. Excuse me, I got a look from Senator Bradford that made me think for a moment that I was discussing the wrong amendment, but I am not.

Alan Shatter (Dublin South, Fine Gael)
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The Senator is driving down the right road.

Paddy Burke (Fine Gael)
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We are on amendments Nos. 27 to 29, inclusive.

Thomas Byrne (Fianna Fail)
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Amendment No. 27 relates to the value of the car. It is not necessary to put a value limit on a car. The reality for the people who will be able to avail of a debt relief notice is that they will not have a car worth much more than that. It would be a shame if the car was worth ¤1,500 or ¤2,000. Who will value it and how will it be ascertained? Will one have to wait for six months for it to depreciate? This provision is not necessary. These are broken people with debts of less than ¤20,000, ¤15 per week net disposable income and other assets of ¤400 or less.

Amendment No. 29 proposes to insert "assets necessary for the maintenance or education of any children of the debtor who are aged 18 years or under". This refers to equipment such as computers, books, desks and so forth. Again, these will be individual cases and that should be listed in the relevant section. I look forward to the Minister's response.

David Cullinane (Sinn Fein)
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I will speak on amendment No. 28. I share the concerns expressed by Senator Byrne. To be fair, I acknowledge the previous contribution by the Minister in which he clearly set out the balance he is trying to strike between the debtor and the creditor, what we are dealing with here and the various types of debtors. I also concur with his comments about how different people find themselves in debt and their circumstances. I am mindful of that when discussing these amendments. However, I have a difficulty with the limit of ¤1,200 on the value of the car. It is most unfair. It is neither appropriate nor realistic. The types of vehicle that would have that value are the types the Minister for Transport, Tourism and Sport would want see off the road. They would not be roadworthy. We propose a value of ¤3,000, which is more realistic. How was the value of ¤1,200 arrived at? Were there discussions with the Society of the Irish Motor Industry, for example? It is a very low threshold. I am deeply conscious of what the Minister said earlier about balance and about the fact that the creditors who are owed money are very often people on low incomes themselves, but in trying to strike the balance I do not believe the Minister has arrived at a realistic figure in this instance. The figure of ¤3,000 proposed in the amendment is more realistic given the value of cars.

Alan Shatter (Dublin South, Fine Gael)
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I will deal, first, with the car. We have adopted what I would describe as a united Ireland approach. In Northern Ireland the amount is £1,000 sterling for a process similar to the debt relief notice; ¤1,200 is practically the same, based on current currency arrangements in this jurisdiction. Sinn Féin regards ¤1,200 as acceptable in Northern Ireland but wants ¤3,000 in the Republic of Ireland. There must be a relationship. There is no monopoly of wisdom on the issue. It is difficult. We are excluding the value of certain assets being taken into account to facilitate a person writing off up to ¤20,000 worth of debt. There is not another better way of dealing with it. I appreciate that Senator Cullinane has suggested ¤3,000 but there has to be some relationship between what we are doing and what is happening on the other side of the island that recognises that individuals are writing off a large amount of debt and are free of that debt. I cannot accept Senator Cullinane's amendment but at least it is better thought out than the Fianna Fáil amendment which implies that, irrespective of the value of one's car, one can retain it. If one is living in rental accommodation and does not own a home but has a Mercedes or a BMW worth ¤50,000, a debt of ¤20,000 and has lost one's job, based on the Fianna Fáil approach to life, one can retain the Mercedes worth ¤50,000, and to hell with the creditors.

Thomas Byrne (Fianna Fail)
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They are not ¤50,000 Mercedes.

Alan Shatter (Dublin South, Fine Gael)
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No, this is the significance of what Fianna Fáil is proposing. One has to examine how the debt relief notice works. One can be an individual with no assets, living in rental accommodation, who spends all his or her money on buying a very large car and has ¤20,000 worth of debt.

Thomas Byrne (Fianna Fail)
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Would the Minister live in the real world?

Alan Shatter (Dublin South, Fine Gael)
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On that basis Fianna Fáil would ignore the large vehicle and creditors would be told they would not get paid. There has to be some balanced approach. This is not centred on emotionalism and trying to discover what can be done. This is a classic Fianna Fáil approach whereby there are no financial limits to anything. Ceremonial jewellery, cars-----

Thomas Byrne (Fianna Fail)
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We had limits.

Alan Shatter (Dublin South, Fine Gael)
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This is absolutely classic. We are flaithiúlach, we throw money at it but we will not pay our debts.

Thomas Byrne (Fianna Fail)
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The Minister is classic Fine Gael. We do not have that kind of money. That is the ivory tower in which the Minister lives.

Alan Shatter (Dublin South, Fine Gael)
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We throw money at everything but we will not pay our debts. That is how Fianna Fáil ran the country. It threw money at everything without knowing from where the money was coming. That is why we are where we are. In the context of dealing with insolvency legislation, it is applying the same economic philosophy to individuals in debt and to the creditors whose debts will not get paid. Let us be realistic about the issue. It is about providing mechanisms to facilitate people who are in debt, to extricate themselves, to let them get back into a normal life after a period, and to write-off debt. It is not about identifying a whole range of assets of value that should be excluded, leaving the local credit union owed ¤5,000 or ¤6,000 and the local shopkeeper owed ¤2,000. One cannot deal with it in that way. I cannot accept the proposed amendments in respect of cars. The matter has been dealt with appropriately in the Bill.

Amendment No. 29 proposes to add two further exemptions. The first would exempt assets necessary for the maintenance or education of any children of the debtor who are aged 18 years or under. This would be a very broad, almost unlimited, exemption. For example, if a person had a savings fund of several thousand euro, Senator Darragh O'Brien's proposed amendment would allow that fund to be designated for education purposes, thus put off limits to creditors while at the same time applying that the creditor write off the debt owed by the debtor. This the same Fianna Fáil approach to the world - save money, have big cars, buy a large item of jewellery but do not pay one's debts.

Thomas Byrne (Fianna Fail)
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And live on ¤15 per week.

Alan Shatter (Dublin South, Fine Gael)
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One can do this with one item but when there is a whole range of items, a question to be asked is how seriously one is approaching the legislation or whether the Senator regards the way the economy was run in the period 2000 to 2007 as so good that it should be applied to individuals. Unfortunately that approach does not work. In the context of education, I understand there is an important issue. In regard to providing that certain items are not taken into account, I draw the Senator's attention to section 24(6)(c)(iii) which reads:

where the debtor or his or her dependant is attending a course of primary or second-level education, books, materials and other items of equipment that are reasonably necessary to enable the debtor or that dependant, as the case may be, to participate in and complete that course.

On the issue of the maintenance of children, we have dealt with that matter. In determining what reasonable expenses an individual will require one has only to look at how many dependent children they have and the sum of money required for them. The Senator's amendment would allow a person who had a large amount of money on deposit in a bank, as well as the Mercedes and the ceremonial item of jewellery of undefined value, to say that ¤300,000 is for his or her child's education and should be exempt. That is the basis-----

Thomas Byrne (Fianna Fail)
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It is not.

Alan Shatter (Dublin South, Fine Gael)
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No, that would be the effect of the amendment.

Thomas Byrne (Fianna Fail)
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That is the basis of the Minister's entire life philosophy and is totally at variance with reality in Ireland.

Alan Shatter (Dublin South, Fine Gael)
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That would be the effect of the amendment. The Senator should take responsibility for the amendments he tables. He wants to present it in a particular way. I have to deal with the reality of the words. It is the words in the legislation that are of direct relevance, not the comments the Senator may make to try to make the words appear sensible or reasonable. When the legislation is enacted, personal insolvency practitioners, creditors, debtors, lawyers, the insolvency agency, accountants, courts and anybody who is involved in the area will look at the words in the legislation. What is proposed by the Senator is completely inappropriate.

Thomas Byrne (Fianna Fail)
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The Minister should enter a competition with the former presidential candidate Mitt Romney to see who is more out of touch with real life. In the Minister's world view, to qualify for a debt relief notice, a person has ¤15 per week, a debt of less than ¤20,000, assets of ¤400 or less but has a Mercedes worth ¤50,000 parked outside the door, and ¤300,000 in the bank. Where in the world is the Minister?

Alan Shatter (Dublin South, Fine Gael)
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That is what the Senator's amendment would permit.

Thomas Byrne (Fianna Fail)
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No.

Alan Shatter (Dublin South, Fine Gael)
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The Senator's amendment would make that a possibility.

Thomas Byrne (Fianna Fail)
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They are the type of beneficiaries the Minister imagines are in the real world. A person in south Dublin who is unemployed can hop on the Luas or get a bus into town and look for work or, like Norman Tebbit, get on their bike and look for work - perhaps that is the attitude from Fine Gael. For a person in a rural village the car may be the only means of finding a job to get him or her out of a hole and it may be worth more than ¤1,200 this year. The attitude that appears to prevail among those who are charged with putting forward such legislation is shocking.

Fianna Fáil takes its responsibilities very seriously and we introduced our own personal insolvency Bill based on the Law Reform Commission's recommendation not to provide a veto for the banks. However, in this case the attitude seems to be that people will try to rip off the system and will put nose-rings and other rings, the descriptions of which I will not use in the House because they would be unparliamentary, even though the Minister used them earlier-----

Alan Shatter (Dublin South, Fine Gael)
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I said nothing unparliamentary.

Thomas Byrne (Fianna Fail)
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It is unreasonable to talk about somebody with debts of only ¤20,000, who might have a ¤50,000 Mercedes car and ¤300,000 in the bank, looking for a debt relief notice. This is unreal and we need to bring some reality into this. The Minister and his party colleagues do not seem to be in touch with real life and with the sort of people I meet in my clinics - I hope the Minister meets similar people - who may well benefit from this legislation. They do not have a ¤50,000 Mercedes car or assets such as ¤300,000 in the bank that they can allocate to the child's education. This is real life and these are broken people who are struggling and have no hope. The attitude shown by the Minister will not give them any hope. It will depress them to find that he does not seem to know how such people lead their lives. They do not have a Mercedes car and do not have ¤300,000 in the bank.

David Cullinane (Sinn Fein)
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It is clear the Minister is trying to incite a reaction, given his previous contributions. It is not just Fianna Fáil. Sinn Féin has been on the receiving end of some of it, but it is more so Fianna Fáil today. While much of what he has said is true and at times entertaining it is not helpful to contributions at hand. A substantive point is being lost in some of the banter that has been exchanged between the Minister and Senator Byrne.

I refer to the issue of the value of the car. I will not support amendment No. 27 because I happen to agree with the Minister that it is not reasonable to write off the full cost of a car. However, the figure of ¤3,000 is realistic. While I accept that the figure in the North is £1,000, I do not agree with it and believe it should be higher. I cannot be held responsible for everything that happens in the Assembly. I do not even know whether the laws in place in the North were enacted in Westminster, but it is irrelevant because the Minister has failed to take into account a number of issues. The VAT and VRT regime in the UK is completely different which proves the point that the Minister was not comparing like with like when comparing the price of a car in the North with the price of a car in this state. Perhaps the Minister was unaware of this or perhaps he was just trying to incite.

I agree with Senator Byrne's point about the necessity of a car in rural areas, which should be taken as a given. It is not a luxury for people living in any part of the country and in rural areas it is certainly a necessity. We will be pressing our amendment because we do not believe ¤1,200 is realistic, regardless of what it might be in the North. We are legislators in this part of the country and have responsibility in this state. The Minister's figure of ¤1,200 is not realistic and our proposal of ¤3,000 is more realistic. If the Minister is not minded to accept the amendment we will press it to a vote.

David Norris (Independent)
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It was worth coming to the House to hear the Minister elaborate on Fianna Fáil's taste for ceremonial jewellery. I wondered if this indicated a drift towards a monarchy. Tiaras, crowns and other orbs and sceptres come to mind. There was a certain imperial cast to their political fortunes some time ago.

I understand the Fianna Fáil motivation in seeking to cover people providing appropriately for education, but the Minister has very clearly and adequately dealt with that issue. It is covered in a later section.

I agree with Sinn Féin that a value of ¤3,000 is reasonable and hope the Minister might consider it. When it was said that some of these cars valued at ¤1,200 or less might not be roadworthy - that was the implication-----

David Cullinane (Sinn Fein)
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Not all of them.

David Norris (Independent)
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I quite understand. I hope the NCT is being applied to a standard throughout the country and that would meet that requirement. Perhaps it is not because I see cars that are plainly burning oil in a way that would suggest they have not been tested for some time. I would leave it to the NCT to look after that. Many people use cars in that low-price range, as I do. It is possible to buy cast-offs which may be quite large and luxurious but come at a very modest price. However, the running costs would rule them out for many people. I wonder whether people who drive large old cars, tax and insure them. I hope they do.

I am very glad to see one motor vehicle, which is used for business purposes among other things, being exempted. The taxi people have had a very raw deal. If I may briefly mention the NCT-----

Paddy Burke (Fine Gael)
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This is outside the scope of the amendment.

David Norris (Independent)
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I am glad the regulator overturned the requirement to require taxis more than nine years old to be retired.

I express my gratitude. I understand the Minister has taken on board suggestions concerning hire purchase. I raised this particularly with regard to the question of hire-purchase agreements for personal cars. I gather he has taken a fairly broad view of this, which I welcome.

Aideen Hayden (Labour)
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The Minister has shown himself to be eminently reasonable in the course of the wider debate yesterday and today on this issue. It has been very amusing sitting here and listening to some of Senator Byrne's comments. We have had many examples of people divesting themselves of their assets and behaving in ways that have been utterly reprehensible. While some of what he said has reason, some of it is somewhat extreme.

I take Senator Norris's point about older, bigger cars having less value but being extremely expensive to run and maintain. I also take Senator Cullinane's point about being able to access roadworthy vehicles for ¤1,200. I, too, have a concern about people in rural areas, particularly those needing to ferry children around, being able to access a roadworthy vehicle for ¤1,200. The Minister has been so reasonable on so many issues, would it be possible to consult with the Society of the Irish Motor Industry if Sinn Féin were to withdraw its amendment and perhaps retable it? I understand this debate will resume on Tuesday. Perhaps the Minister might ask his departmental officials to make some contact with the Society of the Irish Motor Industry to establish if ¤1,200 is a reasonable amount of money with which to buy a roadworthy car that would not be prohibitive to tax, insure and run.

David Norris (Independent)
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I suggest they contact the AA as the SIMI might have a vested interest.

Aideen Hayden (Labour)
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Yes. There are a number of bodies the Minister could consult to ensure we are being reasonable on this issue as the Minister has been reasonable on so many other issues.

Alan Shatter (Dublin South, Fine Gael)
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In response to Senator Cullinane, he might be interested to know that the Northern Ireland legislation was enacted by the Northern Ireland Assembly and I am sure all these issues were teased out there. I keep on saying we are trying to provide a balance in the Bill between the rights of creditors and the position of debtors and allow people to maintain some reasonable standard of living and have reasonable living expenses available to them.

I cannot accede to Senator Cullinane's proposal. I do not want to make a commitment that would change the Bill, but I am prepared to reflect on the issue of the value of the car between now and Report Stage. We had a similar exchange in the Dáil.

I must be careful that we do not create a situation where, in advance of someone trying to utilise the debt relief notice provisions, perhaps in the context of a credit union loan to buy a car where there was a debt, the credit union decides to seize the car in advance of the possibility of a debt relief notice being put in place because, as one should not forget, once it is put in place there are certain protections against court proceedings, but not necessarily against seizure around which there is an interesting technical problem. I cannot accede to the proposal for ¤3,000. I cannot in any circumstances accede to the proposal that there be a car of unlimited value retained.

I have addressed the issues of the maintenance of children and children's education. Perhaps the Senator who proposed that measure will not move the amendment concerned. Children are protected in relation to school equipment and the maintenance issue of children is part of what we deal with in the context of reasonable living expenses.

David Cullinane (Sinn Fein)
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I move amendment No. 30:

In page 28, between lines 7 and 8, to insert the following subsection:?(7) The Minister for Justice shall, no later than 30 days after the enactment of this bill publish detailed guidelines concerning the household equipment and appliances that are reasonably necessary to maintain a reasonable standard of living for the debtor and his or her dependants, for the purposes of section 24(6)(c) of this Bill.".

Paddy Burke (Fine Gael)
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When is it proposed to sit again?

Maurice Cummins (Fine Gael)
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At 2.30 p.m. on Tuesday, 4 December 2012.