Personal Insolvency Bill: Committee Stage (Resumed)


Senator Zappone

I have a number of remarks and questions, particularly on amendment No 6, and what constitutes a reasonable standard of living and reasonable living
expenses  The Minister refers to both in the Bill. My speech last week indicated that one of the very positive aspects of the Bill is that the insolvency service will prepare and issue guidelines on what constitutes a reasonable standard of living for debtors.  “Reasonable” is a carefully chosen word and it is reasonable to suggest that it means a minimum standard and that it also refers to essential living expenses.  If that is acceptable to the Minister, and I have seen him demonstrate reasonableness time and again, it is also reasonable to ask how one calculates these sums for unique individuals, their families and their circumstances.  The Minister refers to this in respect of flexibility and the identification of guidelines.

I commend the Minister for including amendment No 6, which provides guidance.  He notes that the service shall have regard to a number of measures  Section 23(3)(e) refers to “the need to facilitate the social inclusion of debtors and their active participation in economic activity in the State”.  The Minister is providing guidance to the service that debtors must be left with Seanad Éireann an amount each month that enables them to have the capacity, resources, health and motivation to remaining engaged with life, to hope for better days, not to move towards hopelessness and to believe they will find new ways to make a living for themselves and their families.  It is a good thing to think about the meaning of the metaphor, “make a living”, as we contemplate the best kind of law that ensures debtors who use this new regime have access to a reasonable standard of living. How should the service go about this task?  While I commend the Minister on the amendment, it may not give enough guidance to ensure that debtors shall be treated with consistency and fairness across all the multiple circumstances of individuals and families. I suggest that the Minister consider adding a couple of components to amendment No 6. The proposed paragraph 23(3)(a) states that the insolvency service guidelines shall have regard to “such measures and indicators of poverty set out in Government policy publications on poverty and social inclusion as the Insolvency Service considers appropriate”.  I recommend that it should also have regard to other academic or complementary research on poverty, debt and particularly minimum income standards in Ireland.  I am suggesting inclusions beyond simply Government policy publications. The proposed paragraph 23(3)(d) states that the insolvency service guidelines should have regard to “differences in the size and composition of households”.  The amendment should also include: the physical health of all the individuals within the household; the employment status of the heads of household; caring, including child care and elder care, required by the household; and the location of the household, that is, whether it is in a rural or urban area.  All of these elements impact directly on what constitutes a reasonable living standard and living expenses for each individual family. Section 23(4) notes the need to ensure reasonable living expenses. It is crucial that the definition and - I am afraid I need help with the word - operationalisation-----

Deputy Alan Shatter: What about modalities?

Senator Zappone:

Very good  I will take that one too  If I consider the Minister’s amendment he may consider mine. I am trying to suggest something that is grounded in an evidence base.  Minimum incomestandards have been developed by numerous experts in different countries.  In Ireland the work has been spearheaded by the Vincentian Partnership for Social Justice, but also assisted by economists in Trinity College and the University of Loughborough in the United Kingdom. That work has produced data that is grounded in the lived experiences of our people and has the potential to be effective in defining reasonable living expenses.  This research has been carriedout over a decade using a rigorous methodology, establishing a consensus on what members of the public believe is a minimum standard that no individual or household should go below and effectively developing a method to establish the gross minimum income required in a particular household situation based on needs and not wants.  The data developed over this period now covers the expenditure needs of 92% of households with children.  It is recognised that the method behind the minimum income standard data is designed to answer the crucial question of how much it costs to reach an acceptable standard of living. The alternative to using evidence-based measures of need and adequacy is to continue to use abstract ad hoc indicators grounded in theory, and I know that is not at all the Minister’s intention. That is why he has developed a number of references the service should refer to in developing its guidelines.  I am simply suggesting and asking the Minister to consider incorporating in his amendment, particularly in the new paragraph 23(3)(a), along with the measures and indicators of poverty set out in Government policy, which is fine, those set out in minimum income standards for Ireland publications.

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