A new water charging regime will come into effect within 18 months, with householders facing financial penalties for excessive usage.
Minister for Housing Eoghan Murphy on Wednesday secured Cabinet approval to refund some 990,000 householders who paid the controversial levies before they were suspended last year.
The refunds will cost some €173 million and cheques will be posted to households by the end of the year.
Mr Murphy said €114 million would have to be transferred to Irish Water this year to cover the funding gap arising from the suspension of the charges. This would have to be drawn from central Government funding and would compete against other capital projects in the health and education sectors, he said.
The refund was a recommendation of the Joint Oireachtas Committee on the Future Funding of Domestic Water Services. The committee was set up by the Government after the last election following significant opposition to the retention of the charges.
Mr Murphy said he would be speaking to Minister for Finance Paschal Donohoe about finding a consistent funding stream for Irish Water. He challenged opponents of the charges to outline how they would fund water services in the absence of the charges.
He said there would be calls to put extra money into different areas in October’s budget and that this would be complicated by the end of the charges.
The Government had to cut off a “funding stream which we did not want to do” and “it puts us in a difficult position”, he said.
Five billing periods
Households will receive up to €325 through the refund process, but this depends on the amount paid over the five billing periods, which was linked to the number living in the property.
The €100 conservation grant, which was distributed by the Department of Social Protection, will not be deducted. Up to 190,000 people who did not pay any bills received the grant and will not be asked to return it.
The refund scheme will require legislation to be passed through the Oireachtas, but more controversial measures to introduce the excessive use regime will be discussed by Cabinet next week.
The Commission for Energy Regulation will set excessive usage at 1.7 times an average rate of usage, and fines or penalties will be applicable beyond that.
Mr Murphy said the new regime would come into force in January 2018. Households found to be wastefully using water will be notified by January 2019 and will then be given six months to rectify the problem before they face paying levies.
It is unknown if the proposed measures will meet the demands set down by the European Commission’s Water Framework Directive, which seeks to promote water conservation. Mr Murphy said he has been in regular contact with the commission and would await their verdict on his proposed legislation.
Solidarity TD Paul Murphy said the anti-water charge movement would not allow for the introduction of charges by the back door.
“The difficult bit still awaits them – which is attempting to create a back door for water charges in the future, via the so-called excessive usage charges.
“They will meet such obstacles there, including the mass opposition that still exists and the fact that large swathes of the country have not been and will not be metered, that those plans won’t be worth the paper they’re written on.”