Problems paying government debts

If you’re struggling to pay a government debt, you’re not alone. Many people find it difficult to manage their debts at some point in their lives. Government debts can feel overwhelming, because if they’re not paid they can lead to severe consequences.  

Taking action straight away can stop a small problem becoming a big one. 

 What is a government debt? 

A government debt is when you owe money to a government or state body. They usually relate to statutory charges and levies (charges set by law). 

Debts owed to the government are usually priority debts because if you don’t pay them, the consequences can be more severe than other types of debts. Some examples of government debts are: 

• Unpaid taxes 
• Local Property Tax (LPT) arrears 
• Court fines 
• TV licence arrears 

Citizens Information has more detail on the rules covering statutory debts.  

I’m struggling to pay my taxes  

You are expected to pay your taxes on time and in full. If you owe money to Revenue for unpaid taxes, contact Revenue to make a plan to repay.  

Act quickly, if you get a final demand for unpaid taxes and you don’t respond, Revenue can take action to collect the overdue tax. Revenue can: 

• Refer your case to the Sheriff to enforce the debt  
• Take a case against you through the courts  
• Use specific powers of attachment of a debt  

You may be able to agree a phased payment arrangement, for example, by reducing your tax credits in a following year.  

I’m struggling to pay my Local Property Tax (LPT) 

If you’ve missed any Local Property Tax payments or you’re struggling to pay arrears, talk to Revenue as soon as possible. You might be able to agree a repayment plan or deferral of your payment.  

This is an agreement with Revenue to delay your payments until your financial situation gets better. It can be a full-payment deferral or half-payment deferral, depending on your situation.  

Citizens Information has more information on who can get a payment deferral and how to apply. 

Contact Revenue as soon as possible if you think you’ll have trouble paying. If you don’t let them know, they can take the repayments direct from your wages or bank account. They will let you know before they do this. 

If you don’t pay Local Property Tax arrears, Revenue will put a charge on your property. This means you won’t be able to sell your property without paying the accumulated tax together with interest and penalties (if applicable). 

If you are struggling with arrears and need help putting together a budget and tackling debt plan, get in touch with us for free, expert debt advice.  

I’m struggling to pay for my TV licence 

If you can’t afford to pay for a TV licence upfront, you can pay in monthly, quarterly (every three months), half-yearly or yearly instalments. You won’t save money on the cost of the licence, but spreading the cost will make payments more manageable. 

You can also buy TV licence stamps from your local Post Office. Buying stamps to save up for your licence can be an easier way to pay. 

Check if you can get a free TV licence 

You might be able to get a free TV Licence if you qualify for the Household Benefits package. 

What can happen if I have a TV but don’t have a TV licence? 

• A TV officer could visit your home to see if you have a TV. 
• An Post may send you a notice saying you could be prosecuted if you don’t buy a TV licence. 

What can happen if I don’t pay for my TV licence after getting a notice letter? 

You could be sent a court summons. The court can give you a fine of up to €1,000. This can rise to €2,000 if you are fined again for the same offence. 

An Post can ask a court to judge in their favour  for the outstanding payments.  

Because of this, you should treat your TV licence as a priority debt.  

Contact MABS for help 

If you’re falling behind with your TV licence payments and you’re not sure how to deal with it, get in touch with us. Our professional advisers can give you free and confidential advice on dealing with arrears and getting your payments up to date. 

Problems paying a court fine 

If you can’t pay your fine, it’s important to let the court know straight away. Ask about options to pay like: 

• Paying in instalments 
• Taking payment directly from your social welfare payment 
• Doing community service to work off the debt 

You can pay your fine through An Post or else pay the Courts Service directly. 

If you need help, contact us for free and confidential advice on how to pay off these priority debts and still manage the rest of your living costs. 

What happens if I don’t pay my court fine 

If you don’t pay or at least try to pay, the court can: 

• Take the money from you directly (through your wages or social welfare payment) 
• Order you to do community service  

In extreme cases, you could be put in prison, but normally this is only if you make no effort to try and pay the fine or do community service. 

Taking control of my government debts 

If you are falling behind with payments on government debts or you are worried about several debts, you should act.  

If you have just this debt 

If you have just one debt, work out what you can afford to repay. You can do this by looking at where your money is going and explore ways of increasing or making the most of it so you can make a realistic offer to pay. The easiest way to do this is to make a budget using our free tool.  

If it is clear from your budget plan that you cannot afford your repayments, contact your government debt creditor as soon as possible to explain your situation. You can ask for their advice and find out how they can work with you, or you can ask for time while you work out a budget and tackling debt plan.  

Being open and honest about your circumstances will show them that you have missed your payments not because you are unwilling to make them, but because you are unable to.  

You can produce a Financial Statement to send with a letter explaining your circumstances and making your offer officially. This is a 2-page sheet you complete using some of the information from your budget.  It shows: 

• Your income 
• A summary of your expenditure  
• This debt (or a list of your debts and who you owe them to if you have more) 
• What you are offering to pay   

You can use our Financial Statement template and standard letter B template. Step 5 of the tackling debt plan will guide you through putting your plans into action.   

This is often an effective way of persuading them to accept reduced payments over a longer period of time.  Be prepared to give more information about your situation, such as bank statements and payslips.  

Don’t agree to pay more than you can realistically afford. Any offer you make should be based on what you have left over after paying your essential commitments such as housing,  food, heat, light and so on. But this is a priority creditor so you will need to make every effort to pay as much as you can to prevent the situation from getting worse.  

See our tips for contacting creditors and tips for your tackling debt journey. 

If your creditor does not accept your offer and you’re unhappy with the solution offered, or you need help approaching your lender, contact MABS. 

If you are struggling with several debts 

If you’re finding it hard to keep up with repayments for government debts and you’re struggling with several debts, see the 5 steps for tackling debt to get back on track.