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Personal Insolvency Bil 2012: From the Seanad (Resumed) (Continued)

Wednesday, 19 December 2012

Dáil Éireann Debate
Vol. 787 No. 4

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Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan Seanad amendments Nos. 6, 134, 135, 136 and 176 are related and will be discussed together.

Seanad amendment No. 6:

Section 2: In page 11, subsection (1), lines 36 and 37, to delete “security in or over property of the debtor” and substitute the following:

“security (other than a guarantee or pledge referred to in section 35(8) of the Credit Union Act 1997) in or over property of the debtor”.

  Seanad amendment agreed to.

Seanad amendment No. 7:
Section 2: In page 12, subsection (1), to delete lines 10 to 15 and substitute the following

“ “specified creditor”, in relation to a protective certificate, means a person specified in a protective certificate as being the person to whom a particular debt is owed;

“specified debt”, in relation to a protective certificate, means a debt that is specified in that protective certificate as being subject to that certificate;”.

  Seanad amendment agreed to.

Seanad amendment No. 8:
Section 2: In page 12, subsection (1), line 17, to delete “and apart”.

  Seanad amendment agreed to.

Seanad amendment No. 9:
Section 2: In page 12, subsection (2), to delete lines 46 to 48.

  Seanad amendment agreed to.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan Seanad amendments Nos. 10, 29, 36, 111 to 113, inclusive, and 157 to 159, inclusive, are related and will be discussed together.

Seanad amendment No. 10:
Section 2: In page 13, between lines 2 and 3, to insert the following new subsections:

“(4) For the purposes of sections 24(2)(g)(i), 84(1)(g) and 116(1)(g), a debtor enters into a transaction with another person at an undervalue if he or she—
(a) makes a gift to, or otherwise enters into a transaction with, that other person on terms that provide for the debtor to receive no consideration, or

(b) enters into a transaction with that other person, the value of which, in money or money’s worth, is significantly greater than the value, in money or money’s worth, of the consideration provided by that other person.
(5) For the purposes of sections 24(2)(g)(ii), 84(1)(h) and 116(1)(h), a debtor gives a preference to another person if—
(a) the other person is a creditor of the debtor to whom a debt (other than an excluded debt or an excludable debt) is owed, or is a surety or guarantor for any such debt, and

(b) the debtor does any thing (including the granting of security), or suffers any thing to be done, which has the effect of putting that other person into a position which, in the event that the insolvency arrangement concerned is issued or comes into effect, as the case may be, would be better than the position in which that other person would have been if that thing had not been done or suffered to be done.”.

  Seanad amendment agreed to.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan Seanad amendments Nos. 11, 183, 230 to 242, inclusive and 245 are related and will be discussed together.

Seanad amendment No. 11:
Section 5: In page 13, lines 29 to 42, to delete subsections (2) and (3) and substitute the following:

“(2) The performance of the functions, and the exercise of the powers and jurisdiction, conferred by this Act on the Circuit Court shall be within the jurisdiction of the circuit of the Circuit Court in which—
(a) the debtor to whom an application under this Act relates is residing at the time of the making of the application or has resided within one year of the time of the making of the application, or

(b) the debtor to whom the application relates has a place of business at the time of the making of the application or has had a place of business within one year of the time of the making of the application.
(3) An application to the Circuit Court under this Act may be made—
(a) in such office of, or attached to, the Circuit Court within the circuit concerned,

(b) in such combined court office (within the meaning of section 14 of the Courts and Court Officers Act 2009) within the circuit concerned, or

(c) in such office of the Courts Service, within the circuit concerned, designated by the Courts Service for the purpose of this Act,
as may be prescribed by rules of court.”.

  Seanad amendment agreed to.

Seanad amendment No. 12:
Section 8: In page 14, lines 10 to 17, to delete subsection (2) and substitute the following:

“(2) The Insolvency Service shall be a body corporate with perpetual succession and, without prejudice to the generality of the foregoing, may sue and be sued in its corporate name.”.

  Seanad amendment agreed to.

Seanad amendment No. 13:
Section 8: In page 14, lines 35 to 39, to delete subsection (6) and substitute the following:

“(6) Any contract or instrument which, if entered into or executed by an individual, would not require to be under seal may be entered into or executed on behalf of the Insolvency Service by the Director or any person generally or specially authorised by the Director in that behalf.”.

  Seanad amendment agreed to.

Seanad amendment No. 14:
Section 9: In page 15, subsection (1), between lines 12 and 13, to insert the following:

“(h) in accordance with Part 5
(i) authorise individuals to carry on practice as personal insolvency practitioners,

(ii) supervise and regulate persons practising as personal insolvency practitioners,

 (iii) perform such functions as are assigned to the Insolvency Service under that Part,
(i) prepare and issue guidelines as to what constitutes a reasonable standard of living and reasonable living expenses under section 23,

(j) arrange for the provision of such education and training, in relation to the performance by them of their functions under this Act, of approved intermediaries, personal insolvency practitioners and other persons, as it thinks fit,”.

  Seanad amendment agreed to.

Seanad amendment No. 15:
Section 11: In page 15, lines 39 to 41, to delete paragraph (b) and substitute the following:
“(b) Subject to subsection (13), the Director shall hold office for such period, not exceeding 5 years from the date of his or her appointment under this section, as may be determined by the Minister.”.

  Seanad amendment agreed to.

Seanad amendment No. 16:
Section 11: In page 16, subsection (3), lines 14 and 15, to delete paragraph (a).

  Seanad amendment agreed to.

Seanad amendment No. 17:
Section 11: In page 17, subsection (11), lines 1 and 2, to delete paragraph (a) and substitute the following:

“(a) dies, resigns or is removed from office, or”.

  Seanad amendment agreed to.

Seanad amendment No. 18:
Section 11: In page 17, lines 17 to 19, to delete subsection (13) and substitute the following:

“(13) If, immediately before the establishment day, a person stands designated by the Minister under subsection (12)
(a) the Minister shall appoint that person to be the first Director, and

(b) for the purposes of subsection (1)(b), the date of that person’s designation under subsection (12) shall be deemed to be the date of his or her appointment under this section.”.

  Seanad amendment agreed to.

Seanad amendment No. 19:
Section 15: In page 19, lines 10 to 45 and in page 20, lines 1 to 21, to delete section 15 and substitute the following section:

15.—(1) Subject to this section, the Insolvency Service shall, in each year—
(a) prepare and adopt a business plan in respect of that year or of such other period as may be determined by the Minister, and

(b) submit the plan to the Minister.
(2) A business plan shall—
(a) indicate the activities of the Insolvency Service for the period to which the business plan relates,

(b) contain estimates of the number of employees of the Insolvency Service for the period and the business to which the plan relates, and

(c) accord with policies and objectives of the Minister and the Government as they relate to the functions of the Insolvency Service.
(3) In preparing the business plan, the Insolvency Service shall have regard to the strategic plan in operation at that time approved under section 14.

(4) The Insolvency Service shall submit to the Minister with a business plan a statement of its estimate of the income and expenditure relating to the plan that is consistent with the moneys estimated to be available to the Insolvency Service for the period to which the business plan relates.”.

  Seanad amendment agreed to.

Seanad amendment No. 20:

Section 16: In page 21, subsection (6), lines 4 and 5, to delete “a report under this section,” and substitute “an annual report submitted under subsection (1),”.

  Seanad amendment agreed to.

Seanad amendment No. 21:
Section 16: In page 21, between lines 9 and 10, to insert the following new subsection:

“(8) The Minister may, if he or she considers it appropriate to do so, cause a copy of a report submitted under subsection (3)
(a) to be laid before each House of the Oireachtas, and

(b) where paragraph (a) has been complied with, published in such form and manner as he or she considers appropriate.”.

  Seanad amendment agreed to.

Seanad amendment No. 22:
Section 19: In page 22, lines 22 to 27, to delete subsection (1) and substitute the following:

“(1) The Director shall, at the request in writing of a Committee, attend before it to give account for the general administration of the Insolvency Service as is required by the Committee and, for that purpose, shall provide the Committee with such information (including documents) as it specifies and as is in the possession of, or is available to, the Director.”.

  Seanad amendment agreed to.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan Seanad amendment No. 23, amendments Nos. 1 and 2 to Seanad amendment No. 23, and Seanad amendments Nos. 30, 34, 37, 77 and 129 are related and will be discussed together.

Seanad amendment No. 23:
Section 23: In page 24, before section 23, but in Part 2, to insert the following new section:
23.—(1) The Insolvency Service shall, for the purposes of sections 24, 60(4) and 95(4) and section 85D (as inserted by section 146) of the Bankruptcy Act 1988, prepare and issue guidelines as to what constitutes a reasonable standard of living and reasonable living expenses.

(2) Before issuing guidelines under subsection (1), the Insolvency Service shall consult with the Minister, the Minister for Finance, the Minister for Social Protection and such other persons or bodies as the Insolvency Service considers appropriate or as the Minister may direct.

(3) In preparing guidelines to be issued under subsection (1), the Insolvency Service shall have regard to—
(a) such measures and indicators of poverty set out in Government policy publications on poverty and social inclusion as the Insolvency Service considers appropriate,

(b) such official statistics (within the meaning of the Statistics Act 1993) and surveys relating to household income and expenditure published by the Central Statistics Office as the Insolvency Service considers appropriate,

(c) the Consumer Price Index (All Items) published by the Central Statistics Office or any equivalent index published from time to time by that Office,

(d) such other information as the Insolvency Services considers appropriate for the performance of its functions under this section,

(e) differences in the size and composition of households, and the differing needs of persons, having regard to matters such as their age, health and whether they have a physical, sensory, mental health or intellectual disability, and

(f) the need to facilitate the social inclusion of debtors and their dependants, and their active participation in economic activity in the State.
(4) Guidelines issued under subsection (1) may provide examples of—
(a) expenses that may be allowed as reasonable living expenses, and

(b) expenses that may not be allowed as reasonable living expenses.
(5) The Insolvency Service shall make guidelines issued under subsection (1) available to members of the public on its website.

(6) Subject to subsection (7), the Insolvency Service shall issue guidelines under subsection (1) at intervals of such length, not being more than one year, as it considers appropriate.

(7) Failure by the Insolvency Service to comply with subsection (6) shall not render invalid for the purposes of this Act the guidelines most recently issued by it under this section.”.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan Is amendment No. 23 agreed to?

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn No, Acting Chairman, I have tabled amendments to amendment No. 23.

Deputy Niall Collins: Information on Niall Collins Zoom on Niall Collins The Acting Chairman was doing well.

Minister for Justice and Equality (Deputy Alan Shatter): Information on Alan Shatter Zoom on Alan Shatter Perhaps I should come in at this point. These amendments relate to the issue of reasonable living expenses. Amendment No 23 empowers the insolvency service to draw up guidelines in respect of a reasonable standard of living and reasonable living expenses for debtors. These guidelines are referenced in sections 24, 60(4), 95(4) and section 85D, as inserted by section 146 of the Bill, of the Bankruptcy Act 1988 and will be required for the information of all concerned in the new debt resolution processes.

  The new section 23 sets out the principles and policies which will set the parameters for the guidelines on living expenses. The insolvency service will be required to consult the Minister, the Minister for Finance, the Minister for Social Protection and such other persons or bodies as the insolvency service considers appropriate or as the Minister may direct. Subsection (3) sets out the matters to which the insolvency service is required to have regard in the course of drawing up guidelines. These include poverty indicators as set out in Government publications on poverty and social inclusion, statistical information collated by the Central Statistics Office on household income and expenditure, and the consumer price index. The insolvency service may also consider other appropriate sources of information such as academic studies. A broad range of matters are required to be taken into consideration with regard to differences in the size and composition of households and the differing needs of persons, having regard to matters such as their age, health and whether they have a physical, sensory, mental health or intellectual disability. The insolvency service will be required to issue guidelines on reasonable expenses at intervals of no longer than one year. The insolvency service will work closely with the money advice and budgeting service, MABS, and other organisations with expertise and interest in seeking to devise broad, realistic and workable guidelines.

  I ask Members to note a slight typographical correction to amendment No. 23, which is that the reference to "Insolvency Services" in subsection (3)(d) should read "Insolvency Service". I presume there is no difficulty in so amending it.

  As for Deputy Mac Lochlainn's proposed amendments, the new section 23 was amended on Report Stage in the Seanad to take account of suggestions from Senators that the insolvency service also should have regard to other information or research sources such as academic studies when compiling the guidelines on reasonable standards of living and reasonable living expenses for debtors. I was happy to take on board this suggestion and have reflected this in the provisions of subsection (3)(d). However, it would not be appropriate to refer in primary legislation to an individual study or publication and therefore I do not propose to accept the Deputies proposed amendment to subsection (3)(a).

  In respect of the proposed amendment to subsection (3)(e), I am satisfied that the existing provisions of the new section 23 are sufficiently broad to allow for differences in geographical location to be taken into account in the preparation of the guidelines where necessary - this was a provision that was introduced during the debate in the Seanad - and to the extent it is possible to so do. I should mention that each of the three new debt resolution processes provided for in the Bill requires the specific circumstances of the debtor to be taken into account and geographic location will of course be one such factor to be considered.

  Amendment No. 30 refines the provisions of section 24(5) to better set out how "net disposable income" is to be calculated in the context of an application for a debt relief notice. Amendments Nos. 34 and 37 propose to amend section 24(7) and 24(14) to include a specific reference to the guidelines in regard to reasonable living expenses, which are to be issued under the new section 23. Amendment No. 77 proposes to replace section 60(4) with new text that takes into account the new provisions provided in section 23 in regard to reasonable living expenses in respect of the debt settlement arrangement process. Amendment No. 129 proposes a corresponding amendment to section 95, which applies to personal insolvency arrangements. I think that addresses all of the various amendments, including those tabled by Deputy Mac Lochlainn, that fall under this particular group.

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn I move amendment No. 1 to Seanad amendment No. 23:

In subsection (3)(a), after “inclusion” to insert “, and those articulated in the Consensual Budgeting Standards mechanism, and other mechanisms to assess relative income poverty”.

In respect of the amendments to which the Minister has referred, Sinn Féin welcomes that the Government took on board its proposals to ensure guidelines are produced that outline what exactly constitutes a reasonable standard of living. This is essential to ensure people are not driven into poverty. A consensual budgeting standards mechanism aims to develop a standard that is rooted in social consensus about goods and services that everyone can afford. The Vincentian Partnership for Social Justice has used this in much of its research and the methodology itself works using focus groups of people from differing socioeconomic backgrounds to identify the actual expenditure choices and judgments that are made by people in real life as well as how they manage their money. The mechanism establishes the cost of a minimum essential standard of living across lifecycles and covers a broad range of age groups, while also providing a more comprehensive picture of the needs of groups such as single adults of working age living alone, etc.

  Further to this, Sinn Féin also is calling for the insolvency service to examine geographic locations. Cost of living will vary depending on location and those who live in rural areas with no access to public transport will find it more difficult to get to work, bring children to school and so on in respect of transport costs. Sinn Féin welcomes that the Minister has defined more clearly what constitutes a reasonable standard of living. However, I ask him to consider the two amendments I have tabled. They complement what the Minister has done in this regard and I ask him to reconsider them.

Deputy Niall Collins: Information on Niall Collins Zoom on Niall Collins I have one brief comment to make. Can the Minister confirm that when the insolvency service goes about drawing up its view of what constitutes reasonable living expenses, the consultation process will be open to the public? I note the Minister referred to other such bodies. Will the public in general be afforded an opportunity in this regard? In other words, will a public notice be published calling for submissions from the public, as well as the plethora of organisations that exist? While organisations such as MABS are an integral part of this legislation, will other organisations be afforded an opportunity to partake in the consultation process? How often will that be updated? Will it be annual, biennial or every three years?


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