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Reasonable Living Expenses

How are Reasonable Living Expenses calculated?

The ISI is required by section 23 of the Personal Insolvency Act 2012 to prepare and issue guidelines as to what constitutes a reasonable standard of living and reasonable living expenses.

In the guidelines, the costs attributed to a household are termed ‘set costs’.  To these are added the reasonable costs of housing, childcare and special circumstances where these arise. This produces the total for reasonable living expenses for a given household.

Reasonable Living Expenses
Total Set Costs    1 
Childcare    2 
Housing    3 
Special circumstances    4 


 1 Set costs can be found by looking up the tables contained in Schedule 1 of the guidelines and choosing the table which best fits the situation of the applicant based on household composition and on the need of the household for a car.  The set costs of a household are compiled by totalling the costs for each individual in the household.

 2 A significant expense connected with employment arises where childcare is needed, particularly at the first two stages of childhood i.e. infancy and pre-school.  Where childcare costs are paid they are added to the total for set costs. The AI or PIP should assess the reasonableness of these expenses taking into account the factors outlined in the guidelines on pages 11-12.

 3 Housing can also be a significant expense.  In considering what constitutes a reasonable and sustainable accommodation expenditure in an individual case, the AI or PIP should assess the rent or mortgage payments taking into account the factors outlined in the guidelines on pages 11-12.

 4  The differing needs of persons, having regard to matters such as their age, health and whether they have a physical, sensory, mental health or intellectual disability can be accommodated by a debtor specifying reasonable costs which arise as a consequence of ill-health, age or disability under this category of special circumstances. This category may also be used where a debtor has persons other than his or her minor children financially dependent on him or her, such as where the debtor is contributing financially to the care of an adult dependent such as, for example, an elderly relative or a college-going child.