The administrative costs associated with refunding water charges are expected to be €5.87 million, according to figures released to RTÉ under the Freedom of Information Act.
Irish Water will send each of the one million customers a confirmation letter, with a cheque enclosed, refunding the total amount of water charges due to them.
The refunds will be paid by cheque "to avoid other more problematic anomalies."
A heavily-redacted document released from the Department of Housing, Planning and Local Government to RTÉ states, "The administration costs associated with the refund process will be c€5.87m (€4.89m plus 20% contingency)."
The water utility has pledged to "work hard to resolve" a number of challenges that are expected to arise with the refund system.
"We need to explain that while cheques may not be convenient for many people (especially for people who paid by direct debit) it is the only way to avoid other more problematic anomalies," the document states.
It also outlines that the project will deliver an online 'When's my refund?' tool and ensure there is capability within a contact centre to deal with all customer queries relating to refunds.
Irish Water anticipates that it will have to deal with data issues, including address changes, rental properties where tenants have moved and customers who have passed away.
The document titled "Plan to Refund Domestic Customers" states that Irish Water's role is to clearly explain to customers the mechanics of the refund process.
"Any discussion or communication in relation to the generic decision to refund domestic water charges is a matter for Government," it also states.
It also outlines Irish Water's ambition for the refund process to be "as transparent and as simple for customers as possible" and "the solution will be efficient and as cost effective as possible."
In July, Minister for Finance Paschal Donohoe said refunding water charges will cost the exchequer €178m, including €5m in administrative costs.
The documents released by the Department of Housing, Planning and Local Government show that those administrative cost are expected to be around €870,000 more than expected.
