Amongst all the speeches and publicity about the government reducing the water charges – one very important point seems to have slipped under the radar.
Under the original charging plan – every household got a free water allowance of 30,000 litres (as long as a PPSN was provided) . This free allowance has now been abolished (That’s why they no longer need PPS numbers) .
The rate per thousand litres has dropped by about 25% (from €4.88 to €3.70) – but the removal of the free allowance means that for many people their metered charges will now be higher than under the previous charging scheme.
See these two articles to compare calculations of metered bills under the Old Scheme and the New Scheme
The period for capped charges has been extended to 2019 – they were previously in place for 9 months after meter installation. This is mostly beneficial to larger households because the new capped charges are significantly lower for households with 3 adults or more – but such households are in the minority.
For the majority of households (with 1 or 2 adults) the cap has only come down very slightly. For couples it has dropped from €278 to €260. For single adult households the cap is cut from €176 to €160.
Many smaller households who are conservative with their use of water will be worse off financially under the new charging structure.
If we take the example of a single pensioner over 70 with a water meter, getting the Household Benefits Package. Under the old scheme they would have recieved a €100 “Water Support” payment from Social Welfare. Now they can get the same amount in the form of a “water conservation grant”.
Under the old scheme – if they used 51 thousand litres of water a year they would have got a water bill for €102. WIth the water support payment – their net cost would have been €2.
Under the new charging scheme – 51,000 litres of water (with no free allowance) will run up a metered charge of €188 – which will be capped at €160. After the €100 “grant” is deducted it leaves them with a net cost of €60 ….. €58 a year more than under the old scheme.
Another example – a metered couple on low income getting the fuel allowance using 70,000 l of water a year. Under the old rules – this would result in a bill of €195. After deducting the water support payment of €100 – they would have a net cost of €95.
Under the new rules with no free allowance – the metered bill would be €259 a year , just below the cap. They will be eligible for the €100 conservation grant which brings their net outlay to €159 for the year – €64 more than under the old scheme.
Another example – someone on a fairly good income , metered with plenty of water saving devices and who harvests rainwater – so they only use 30000l of water a year.
Under the old set up – they would not be billed for water charges because they used no more than the 30k free allowance.
Under the new charging structure – the metered bill will be €111 – but they will be eligible for €100 conservation grant. Net outlay €11 – compared to zero under the old scheme.
So – as the government announce these “cuts” and the media call it a climbdown – it looks like the changes will not mean lower payments for everyone.
Source : http://www.moneyguideireland.com/