The new charging structure for Irish water will cost the Exchequer a total of €84m per year.

There are two elements to that cost.

The first arises because the Government has decided to compensate Irish Water for the €20m in revenue that it loses because of the new lower cap on domestic charges.

The second is the cost of giving the water conservation grant to the 20% of households who are not customers of Irish water. This will cost €64m per year.

Minister for the Environment Alan Kelly announced the revised package of measures regarding water charges this afternoon.

Charges will be capped for a single adult household at €160 and for others at €260.

Households that register will get a €100 Water Conservation Grant each year resulting in net charges of €60 for a single adult household and €160 for other households.

At a press conference this afternoon, Mr Kelly said the €100 grant would be a cheque or transfer and customers would pay the charges upfront and receive the grant later.

He admitted the first year would entail a time lag with the payment expected in September.

The minister has said those who pledge to never pay water charges are in a different category to those who cannot pay and will be dealt with differently. 

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Capped charges in place until 1 January 2019

The capped charges will be in place until 1 January 2019 with legislation to allow for capped charges to continue after 2019.

Households with either water or sewage only services will pay 50% of the charges.

Those with meters who use less will get a once-off rebate.

The starting date for the charges is 1 January and bills will be charged from April next year.

If a householder fails to register with Irish Water they will receive a default bill for €260 a year.

They will also not be entitled to the €100 Water Conservation Grant.

People now have until 2 February to register.

Households in group water schemes who register will also be eligible for the conservation grant.

PPS Numbers will not be required for registration and Irish Water will delete any numbers it has already received.

There will be penalties for those who do not pay after a year or do not enter into a payment plan.

A single adult household will face a €30 penalty and €60 will apply to other households.

Legislation will be introduced allowing landlords to deduct unpaid water charges from tenants' deposits if necessary. 

Minister Kelly said job advertisements for a new board combining Irish Water with its parent company Ervia will be publicised from tomorrow.

He said it will provide for "stronger governance and improved setting of strategic objectives".

The Government announced that it will be establishing a new public/bill-payers forum to advise Irish Water on service expectations and provide valuable feedback on investment priorities.

Mr Kelly pointed out that more than 20,000 people are on "boil water" notices.

He said almost a million more depend on drinking water supplies that are at risk of failing the required standards.

The minister told TDs that more than 800km of pipes in Dublin are more than 100 years old and there is insufficient supply for the Greater Dublin Area.

Minister Kelly said Irish Water needs to invest around €600m every year to address what he called legacy issues.

He said that while the Government had made mistakes the setting up Irish Water was not one of them.

He added that it was his belief the package will be seen as fair by the vast majority of people.

He concluded his speech by saying much of the measures will be underpinned by legislation that will be progressed and brought to the house before year-end.

Taoiseach Enda Kenny said that water charges will remain affordable from 2019 because caps and allowances will be set by the Minister for the Environment, "so water will always be affordable to everyone".

He said that the water charge is the last new national charge to be introduced by Government and the combined budget measures, tax cuts, child benefit and grant measures will offset the charges.

Mr Kenny told the Dáil that the Irish Public Water supply system has to be changed to meet new and growing demands.

He said demand and supply will be critical by 2030, and that there was a responsibility to ensure Ireland is not "a victim" of water deficit, so it's resilient enough to face demands.

The Taoiseach said investment decisions were slow, uncoordinated and unbureaucratic in the past.

Tánaiste Joan Burton said she was glad to be able to bring clarity and certainty on the water charges.

She added that "scaremongering" by some members of the Opposition will be seen for what it is.

Action not ruled out over bonus decision

The Chief Executive of Irish Water's parent company Ervia welcomed the Government's announcement on water charges.

Michael McNicholas said Irish Water got things wrong and has not gained the trust and confidence of the public, but today's announcement brought clarity and certainty.

He said the new charges would equate to around €20m less than previously thought, but the Government will make up the shortfall.

Charity urges Government to reconsider charges

The St Vincent de Paul Society has urged the Government to reconsider its water charging structure because it does not recognise that many households simply cannot afford to pay flat-rate charges.

The Society’s Membership Liaison Officer, Brendan Hennessy, told RTÉ News the structure has been put in place until 2019 but that there are certain groups which will not be able to afford the charge.

He criticised today’s announcement by Minister Kelly for imposing penalties on those who cannot pay simply because they are poor.

Mr Hennessy was speaking at the launch of the Society's annual appeal for resources to help people on basic minimum incomes who it says are "in critical need of support" when an unexpected cost arises in running their homes. 

The Society says there has been a constant level of demand on its resources over the past five years and there is no sign of the numbers seeking help decreasing in any significant way.