# Reasonable Standard of Living Guidelines being published now



## Brendan Burgess (18 Apr 2013)

You can watch the press conference here

http://www.merrionstreet.ie/index.p...rvice-of-ireland-public-information-campaign/

Core objective is to restore people to solvency 

Based on the Vincentian's Partnership

Verified by data from the CSO and Central Bank 

Liaised with UK Insolvency Service 

Ours is slightly higher than the UK. 

A minimum standard of living to protect debtors not to facilitate creditors.

The objective is to keep people in their homes, not to force them out.

Not designed for the micromanagement of people's day to day living. There has to be flexibility to deal with the particular circumstances of the individual debtor. 

Ensure that they have dignity while they work through their financial difficulties

*What numbers do you expect?
*I don't know

but the IT system will beable to handle whatever number
Minister said 15,000 to 20,000 across all 4 schemes in first calendar year
*
What are the arrangements with childcare costs?
*Contained within reasonable minimum expenses
The PIP must ensure that childcare costs are reasonable.  
They are not required to give up their job.  That would be counter to the purpose of the Insolvency Service. Everything is flexible.  But a case would have to be made 

*Charlie Weston:  original guidelines different. Did the minister put pressure on? 
*Minister: the Guidelines were *draft *and went to justice, social welfare and employment and they made comments. Others fed into the process as well, but ultimately the IS determined the final guidelines.  There was a statutory consultative process.  Flac had a view. Mabs had a view.  

The legislation envisages that the guidelines will be revisited on a regular basis, based on the experience. 

They are a defensive shield to ensure that creditors cannot force debtors into an income below which they can't go.  But they are only guidelines and can be varied depending on circumstances. This is the job of the PIP.

*Robert Short: Will people have to pay up front for a PIP and if so , how much? The amount for health expenses seems very low.
*We have set out examples in the pack how PIPs will be available. They will be paid from the funds available for creditors. 

There is flexibility in regards to all costs, including medical expenses. Especially if they don't have medical cards.

If a child becomes ill later, the arrangements can be changed. 

*Banks are not compelled to reach agreement with the debtors
*The PIP's role is to bring two opposing sides together. These guidelines will facilitate this. 

What is the alternative? Bankruptcy won't suit banks. 

*Is it appropriate for the ISI to recommend to people to surrender their health insurance in all circumstances? 
*Not in all circumstances.  If you have a pre-existing condition or if you are older, you should keep it. But people are entering into insolvency . The majority of the population don't have health insurance. 

*David Murphy At the moment, the banks are asking people to enter into non-disclosure agreements. Will that be the same for the ISI? 
*We are looking at the types of stats we should be producing
We would not disclose an individual arrangement 
We will have access to how much debt is being written off, and we will look at how we disclose that. 

*

Arthur Beesley - what are the protections against moral hazard? 
*The vast majority of cases will be genuine. There are safeguards in place.  The debtor must sign a statutory declaration. The PIP must ensure that it's correct. The ISI has the power to make checks if there is suspicion to third parties such as the Revenue.  Again, the majority will be genuine. 

*AB:  Will all debtors in all cases be able to stay in their home? 
*in the vast vast majority of cases. 

*Paul Carroll - Practitioner This is the first document to show that there will be a write-off. How confident are you that the banks will agree? 
*I have been in consultation with all the lenders. If the lenders don't write off debt, the borrower will go bankrupt.

Minister: If the house is worth €250k and the mortgage is €400k, and they can repay a €250k mortgage, why would the bank not write off debt?  The banks have been gearing up to deal with these issues.

*?  Taxes and levies are not exempt? 
*Minister: The PIP can engage the state just like any other creditor 

*What about family homes in joint names, where only one goes insolvent
*Minister:  Both individuals are jointly and severally liable ( this has been the case for the past 400 years)


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## Brendan Burgess (18 Apr 2013)

Fuller discussion here

http://www.askaboutmoney.com/showthread.php?t=178558


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