Farmers dodging debts ‘should face new penalties’

Farmers dodging debts owed to the State should face new penalties, including debits from their earnings, seizures of their assets and higher interest rates on monies owed, according to a report.

The Government is considering setting up a central collection agency which could recoup over €200m owed across several public sectors, using radical, new penalties to force debtors to pay up.

Sweeping powers would be granted to the new agency, including denying businesses operating licences and landing hospital patients with hefty, late-payment fees.

The debt management review for Public Expenditure Minister Brendan Howlin warns that the Department of Agriculture is slow in taking action against farmers overpaid by the State.

It says the department does not take action untila debt is approaching the statute of limitations period, where it is four years outstanding. Retiring farmers also dodge debts they owe by transferring herd numbers and properties to others, leaving them with no assets to chase, the review explains.

Overpayments for farmers can occur when they over-declare land for payments, such as the rural environment protection and single farm payment schemes.

New sanctions should be applied to farmers owing money through debits from earnings, banks and assets, while interest rates above 3% could be applied to outstanding amounts, it is recommended. This could result in an extra €700,000 in extra funds or more a year, it adds.

Payments plans for hospital patient bills should also be introduced in order to maximise the recovery of funds for the Exchequer.

The review looks at how to better recoup debts owed to the HSE and local authorities.

A new central collection agency would recover an extra €2.4m annually in health bills, while the intake of commercial rates for local authorities could be increased by as much as €164m under such a system.

Hospital emergency departments vary in bill collection rates, ranging from 47% to 85%.

Of the 32 hospitals reviewed, nine fall below the median collection rate of 83%.

Problems occur checking medical cards and tracking down patients.

Payment plans spread over weeks or months should be looked at, and patients and insurers should also be slapped with penalties for late payments, it says.

Collection rates for debts also vary considerably between local authorities, ranging from 57% to 93%.

This relates to businesses paying rates, council house rents and housing loans, among other money owed.

Legal cases could be progressed better, the report says, while the need for businesses to have a “debt clearance certificate” could also encourage payments. The report notes that there has been a drop-off in the collection of monies owed for housing loans and rents in recent years, during the recession. Greater use could be made of phonecalls, text messages and e-billing by councils to encourage debtors to pay up. Legislation already exists where non-payment of the property tax can lead to it being extracted from welfare payments.

The debt review report calculated that over €230m could be recovered annually from five public sectors through new sanctions and methods under a central collection agency.