Irish Water staff were paid bonuses averaging just under €5,000 in March despite the fact that the controversial utility has not issued any bills or collected any payments from domestic water users for almost a year.

The company defended the bonuses it has paid out saying they formed part of pay restoration recommendations made by the Workplace Relations Commission in 2015.

It has also emerged that top-tier management at Irish Water have health insurance premiums for themselves and their families paid for at a cost of more than €5,000 a year per policy.

But the bonuses are likely to attract the most interest. A performance-related pay system was introduced at Irish Water’s parent company, Ervia, in 2013 but, in the wake of a controversy over bonuses being paid to Irish Water staff, the system was put on hold between 2014 and 2016.

“A 2015 Workplace Relations Commission recommendation said that the Ervia pay model should be restored in full in Irish Water in 2017, meaning all staff are eligible to be considered for nonpensionable performance-related awards this year,” a spokeswoman for the company said.

She said these payments were taxable and nonpensionable, and were paid to all 675 Irish Water employees in March for work carried out during 2016. She said the payments were “directly linked to rigorously assessed performance against pre-agreed individual, team and company targets”.

Less than increments

The average pretax bonus payment was €4,799, and the total cost of bonuses for 2016 was €3.2 million or 7.8 per cent of the company’s total payroll costs.

“This is significantly less than the alternative increment-based pay model which would otherwise have been in place,” the spokeswoman said, adding that the pay structure would save €22 million in payroll costs in the company over five years.

When asked how the bonuses were determined, she said individual performance targets were set with measurements and milestones for staff. “These are agreed with managers at the start of the year. A full, detailed mid-year review is carried out for each employee with their manager and another year-end review before a final rating is decided.”

She said performance targets were “aligned to the key business deliverables for each team, each department and the business as a whole, reflecting the role the team member has in achieving those targets. Each final rating is reviewed by department managers, HR and senior management team across Ervia.”

When asked to outline what Irish Water has been doing since charges were effectively scrapped last summer, the spokeswoman said it was continuing to oversee and manage all water plants and pipes from 34 local authorities as well as regulating the commercial and domestic water sector and looking after customer operations and commercial billing.

Richard Boyd Barrett of People Before Profit said he had no issue with ordinary workers at Irish Water receiving agreed bonuses but he described the bonuses given to 32 of the company’s senior executives who earn in excess of €100,000 as “another scandal”.

He said the revelations about the bonus payments to all Irish Water staff was an indication that the Minister for Housing, Planning, Community and Local Government Simon Coveney “should stop playing around with another quango” and dissolve the utility.