If you are in debt to the point of being insolvent and hope to avail of one of the three new irish debt solutions now becoming available under the Personal Insolvency Act 2012, there is considerable information on allowable personal expenditure now published by Insolvency Service of Ireland (ISI).
Personal expenditure is broken down under fifteen headings and allowable limits of expenditure under thirteen of these headings are provided. These thirteen headings are described as ‘set costs’. No limits are set for the other two categories, which are high cost categories i.e. housing and childcare but the debtor’s expenditure on these two items must be reasonable. We now look at each of the other thirteen headings and the definitions given by ISI of what they can and cannot include. Allowances are rounded up or down to the nearest € for clarity.
Food is of course a high spend item and expenditure thereon is based on a balanced nutritious diet, premised on a healthy lifestyle. A single adult is allowed between €219 and €247 per month and a couple are allowed between €279 and €364 per month. Where there is a child or children in the household the amount allowed for food for the adult or couple is reduced somewhat.
Transport is the second highest category of expenditure and the amount allowed varies depending on whether private or public transport is used. A single adult living alone is allowed €136 for public transport or €266 for a car, including car insurance. If there is a child or children in a single adult household this allowance reduces to €113 + €12 per child (other than infants) for public transport and €281 for a car including car insurance. A couple without children are allowed €273 for public transport and €266 for a car including car insurance. A couple with children are allowed €226 + €12 per child (other than infants) for public transport and €280 for a car including car insurance. Cars are only permitted where public transport is inadequate to get to work, school and the local shop.
Social Inclusion and Participation is the third highest of the ‘set costs’ allowances. It includes sports activities and social events such as visits to the cinema. It does not allow for the cost of a holiday. A single adult living alone is allowed €126 per month. If there is a child or children in a single adult household this allowance reduces to €113 per month and additional allowances are given for the child or children depending on their ages. Each infant (0-2 years inclusive) is allowed €8, each pre-school child (3 years) €10, each primary school child (4-11 years inclusive) €50 and each secondary school child (12-18 years inclusive) €93 per month. A couple without children are allowed €231 per month. A couple with children are allowed €158 per month and the same additional allowances are given for the child or children depending on their ages, as detailed above.
Insurance is allowed only in respect of home and car, if applicable. The car insurance allowance where applicable ranges from €26 to €28 per month and has already been included in the transport allowances listed above. Home insurance allowance is €12 per month where there are no children in the household and €18 per month where there are one or more children in the household. Private health insurance is generally not permitted except in some special circumstances where warranted.
Health expenses cover medications, visits to a general practitioner, an optician or a dentist and also small items such as plasters, antiseptic and over the counter medicines. The allowances permitted are €29 – €31 for an adult, €45 – €50 for a couple, €36 for each infant, €19 for each pre-school child, €18 for each primary school child and €24 for each secondary school child. The adult allowances are at the lower end of the scales where there are children in the household.
Clothing and Footwear allowances are €36 for one adult and €67 for a couple. Additional allowances for children are €73 for each infant, €22 for each pre-school child, €30 for each primary school child and €55 for each secondary school child.
Personal Care is allowed in respect of personal hygiene and grooming and the allowance is €32 – €33 per month for an adult and €65 – €66 for a couple. The additional allowances for children are €47 for each infant, €6 for each pre-school child, €12 for each primary school child and €37 for each secondary school child.
Communications expenses relate to telephone, postage and basic internet, an internet dongle/wireless connection at €4.69 per week and phone credit at €5 per week. An adult living alone is allowed €43 per month, a couple is allowed €65 per month and each secondary school child is allowed €22 per month.
Education allowances are for uniforms, books and stationary where applicable as well as adult education.
An adult living alone is allowed €25 per month but just €12 if there are children in the household. A couple are allowed €38 per month but just €12 if there are children in the household. An allowance of €29 is permitted for each primary school child and €65 for each secondary school child. There are no allowances under this category for infants or pre-school children.
Household Energy covers expenses such as electricity and home heating fuel. A single adult living alone is allowed €106 per month and a couple without children are allowed €146 per month. There is an additional monthly allowance of €6 per infant in the household but no further allowance for older children.
Household Goods is the category for expenses such as furniture, appliances and cleaning products. However, single adults of working age are assumed to be living in a rented furnished studio apartment. An adult living alone is allowed €31 and if there is a child or children in the household the adult’s allowance is €65. A couple without children are allowed €32 and if there is a child or children in the household they are allowed €70. There are additional allowances for each child with €48 per infant, €12 per pre-school child, €14 per primary school child and €17 per secondary school child.
Household Services is the category for expenses relating to services such as waste charges, chimney sweeping and annual boiler service and this allowance ranges from €30 to €36.
Savings and Contingencies and Personal Costs is a category allowed to enable debtors to put something aside for a rainy day to cover any emergencies that might arise and to make some modest savings. An adult living alone is allowed €45 per month and if he or she has one or more children the allowance is €61 per month. A couple without children are allowed €66 per month and if they have one or more children they are allowed €80. An additional allowance under this heading of €23 per month applies to each child in the household, regardless of age.
These thirteen headings under which the detailed expenditure limits are prescribed are cumulatively described as ‘set costs’ and once you have worked out and added up what these are in your particular circumstances, you can add on reasonable Childcare Costs (if applicable), reasonable Housing Costs (rent or mortgage) if any and the costs of any Special Circumstances that may apply to your household such as the costs associated with a dependent with a disability. From this total you must deduct the amount of child benefit which the household receives, if any, to arrive at the total allowable household expenditure for your household. If there are three or more children in the household there are further adjustments which may increase your final figure of allowable reasonable living costs by approximately €10 per month.
Written by Paddy Byrne 22 / 07 2013