Water tax credit may be tagged to wages

Officials from the Department of Finance and the Revenue Commissioners are examining whether it is possible to have the water tax credit introduced in the budget automatically accounted for in pay packets.

Discussions are ongoing as to how the tax credit – which is worth up to €100 annually – may be applied and claimed.

The relief will be given for water charges paid in the previous tax year which means relief for water charges paid next year will be refunded in 2016.

Tagging the relief to wages and pay packets is currently being considered, which would mean those entitled to it would not have to claim the credit themselves, as is the case for existing tax credits and reliefs, such as those for health expenses.

The discussions are ongoing along with talks among Ministers and officials about the additional, “comprehensive” water charges package to be unveiled by the Coalition in the coming weeks.

The Economic Management Council will meet again today to discuss the proposed changes to the pricing structure applied for water charges.

The main changes being considered at present are extending the pricing cap at the level of the assessed charge for a number of years, possibly up to 2016, while also offering a choice of a capped charge or a metered charge for those with meters installed; a flat charge at a level slightly lower than the assessed charge, which is €176 for the first adult per home and €102 for additional adults; and extra relief for parents of dependent adult children. Sources said no final decisions are likely to be made at today’s meeting.

One source said larger families will face a lower charge until metering and it is understood the possibility of a discount on the €102 assessed charge rate has been considered.

Minister for the Environment Alan Kelly is expected to give a presentation to the EMC on possible changes at a meeting which will also be attended by Minister for Communications Alex White.

Coalition sources have said the talks up to now, mostly between officials have centred on how much leeway the Government would be allowed to provide without jeopardising the current arrangement whereby Irish Water would be kept off the State balance sheet, for the purpose of judging EU targets.

“They have basically been running the numbers to see what is feasible,” one source said.

This is possible in cases where non-Government funding, such as the levying of charges from the public, accounts for the bulk of operating costs.

A Government spokesman said yesterday this arrangement will not be put at risk, but that Ministers are aware clarity and certainty is needed on water charges.

“There is awareness at Government that people feel strongly about the issue,” the spokesman said. However, it was also stressed that there is no rush on finding a solution, and it is unlikely a final package will be unveiled ahead of the anti-water charges protests this Saturday.

“We have to get this right,” the spokesman said.