Michael McGrath (Cork South Central, Fianna Fail)
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20. To ask the Minister for Finance if he expects Irish Water to pass the market test to be off the State’s balance sheet based on the revised structure for water charges; and if he will make a statement on the matter. [44694/14]

Michael Noonan (Limerick City, Fine Gael)
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In formulating the most recent proposals announced in relation to the financing of Irish Water and water charges, the Government has sought to ensure that Irish Water will pass the 'Market Corporation Test'.

The charging and financing structure announced on the 19th of November is based on the most up to date forecasts of Revenue, Sales and Expenditure for Irish Water and provide firstly, that the majority of production costs will be met from sales and secondly, that the majority of the Utilities revenue will come from private sources. These are the two key components of the Market Corporation Test (MCT).

As the Deputy is aware, the MCT is undertaken by the CSO and is subject to a final decision by Eurostat.  The Department of the Environment, Community and Local Government will provide all relevant details to the Central Statistics Office (CSO) for consideration as part of this process. A submission will subsequently be made by the CSO to Eurostat regarding the classification of Irish Water. It is expected that a decision will be made by the time of the next EDP reporting date (end March 2015).

Michael McGrath (Cork South Central, Fianna Fail)
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21. To ask the Minister for Finance the overall impact on the public finances in terms of gross and net revenue from domestic water charges in 2015; and if he will make a statement on the matter. [44695/14]

Michael Noonan (Limerick City, Fine Gael)
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In formulating the most recent proposals announced in relation to the financing of Irish Water and water charges, the Government has sought to ensure that Irish Water will pass the 'Market Corporation Test'.

Irish Water will introduce water charges for domestic customers to fund expenditure on the treatment and provision of water services. The monies raised by water charges will be received by Irish Water, which is not part of general government. As such, these receipts do not count as general government revenue and accordingly will not impact on the deficit.  For information, these charges will be capped at €160 for a single adult household and €260 for all other households. 

As the Deputy will be aware, yesterday the Government announced that a conservation grant of €100 will now be provided to eligible households.  This replaces the water related household benefits package and tax measures announced in the Budget and is estimated to cost €130m in 2015. This represents an additional €64m cost over and above what was provided for in Budget 2015 and will increase the deficit. There is also an additional cost to the public finances of €21m to offset the loss in revenue from the changed tariff and allow for funding to be provided to Local Authorities to compensate them for the reduced revenue arising from the proposed rates exemption.