Subsidies could see Irish Water bills rise to €350

Middle-income earners could see their Irish Water bills hiked to over €350 if imminent government formation talks result in new subsidies for vulnerable people.

Nevin Economic Research Institute macro-economist, Dr Tom McDonnell, made the claim after a week of drama over the future of the controversial utility.

Writing in the NERI blog after growing Government acceptance that some changes will have to be made, Dr McDonnell said the “major problem” is bills risk pushing “low- income houses closer to or further into poverty”.

However, while he said a subsidy system for vulnerable people hinted at by Leo Varadkar and Michael Noonan could solve the dilemma, it will mean better-off families will have to pay more to ensure Irish Water is eventually taken off the exchequer books.

“To avert adverse poverty outcomes, the subsidy would need to be as high as 100% for particularly vulnerable households, but might be close to or near 0% for most households. In practice, such a model implies that much higher water charges will be needed for high- and middle-income households,” he wrote.

Speaking to the Irish Examiner last night, Dr McDonnell said if charge subsidies are introduced, the need to balance the books would mean middle-income earners could see their current €260 rate rise to €350 — with high earners facing a €385 fee.

He said the only alternatives would be to defer bills, which would negate any environmental benefits, or increase “non-domestic” bill prices for businesses — potentially impacting on jobs.

The comments came as the utility’s unionised workers last night wrote to all political party leaders urging them to clarify their job prospects.