Reclaiming compensations from bailiffs is no easy matter

Electricity compensation. Photo: Arvo Meeks

Although the Riigikogu passed a law amendment past Wednesday (February 9) preventing bailiffs from seizing electricity compensations, the applicants had already received the compensations which were then seized.

No one can tell how much of the state compensations has already been claimed to meet debts and unless the debtors kept a careful eye on their finances, the support went down the drain.

The Chamber of Bailiffs and Trustees in Bankruptcy admitted that the process had been somewhat confused. They initially had no other option but to seize the energy price rise compensation, since the law did not contain an article interpreting the energy support as a social benefit. On the other hand, while the ministry and the Riigikogu were correcting their error, some people received the compensation yet the bailiffs will return it only in case the debtor submits a corresponding application within three days. Some such applications have been submitted, the chamber announced, but without a poll it would be difficult to estimate how many compensation payments have been seized already.

No idea of the score of seizures

“The Ministry of Finance definitely did not foresee that the money could be seized to meet the debts. The energy compensation should be a support which cannot be seized,” admitted Jaak Aab (Center), Minister of Public Administration. The situation is certainly complicated according to him, but considering the criteria linked to the supports, the processes and the volume of the bailiff’s work, the likelihood of unfortunate coincidences is rather low.

The Ministry of Justice which is working to plug the loophole, added that it had recommended the bailiffs not to seize the support sums after the problem had emerged. The corresponding law would have made it possible, the ministry claimed: a debtor must be left enough money or firewood, for example, for one month’s heating of the living space. “Whether the bailiffs observed the explanation or to which extent, we do not know, but it must be kept in mind that our explanations are not binding to the bailiffs and they decide on case-by-case basis,” the ministry spokesperson said.

However, the law amendment passed by the parliament almost a month later does not have retroactive powers, the ministry and the Riigikogu Social Affairs Committee member Õnne Pihlak (Reform) admit. When the president promulgates the law and it comes in force, the bailiffs can no longer seize the compensation. Until then the debtors have to keep close watch over their financial affairs and reclaim the compensation as soon as possible. “In order to keep the money, people have to submit a corresponding application within three work days after the seizing of the money,” Pihlak explained. “A bailiff does not check the purpose of the money transfer to a person’s account. Since the law will come in force as of its promulgation, the part concerning bailiffs cannot be applied retroactively. What has been seized would not be returned but they cannot seize the compensations later.”

In Pihlak’s opinion, the blunder with the compensations was caused by the novelty and extraordinariness of the situation: “Obviously, one cannot always foresee all the nuances.” She said that the ministry had started to prepare the .amendments as soon as the problem had become apparent.

The opposition was angry over the delays with the process. “The first reading was on Monday and the law was passed on Wednesday. It is not actually the usual practice that the two readings take place the same week. This was an emergency procedure since there were important amendments which had to be approved quickly,” Pihlak explained, adding that there had been no deliberate delay with the procedure, despite efforts to create the corresponding impression.

On the other hand, it is natural that everything seems to move at a snail’s pace from the opposition’s point of view. “If it is Friday then it is Friday. You can continue debating on Monday. Really everyone in the parliament understood that this is a necessary amendment which must be passed quickly.”

When asked how large a share of the compensations had been seized as debts, Pihlak said that no one has any idea. According to the Ministry of Justice, there are approximately 35,000 active enforcement procedures, while 23,000 euros worth of compensation payments had been made during the amending of the law. “As I look at the figures, I very much hope that the number of people concerned is minimal. There was an opportunity to protest until now. That was nothing new. From now on it will occur automatically. If one kept watch over his financial affairs there was even before that an opportunity to protest.”

The confusion could have been avoided

Urmas Reinsalu (Isamaa), Chairman of the Riigikogu State Budget Control Committee, commented that this case reveals the inefficiency of the support measure. The Ministry of Finance forecast of the number of applicants has declined and people are less active in claiming compensation, whether due to the complicated process or for other reasons, he said.

What should have been done? Reinsalu believes that the only rational move would have been an honorable agreement between the ministry and the bailiffs to ensure legality. The debtors could have also waited for a bit with their compensation claims: “The ones with active enforcement procedures should pay their debts but to make ends meet the rational move would have been to submit applications after the law had come in force,” he said. The problem has been solved at the legislative level, Reinsalu stated, but the ball is now in the court of the bailiffs.

The coming in force of the law amendment now depends on the president who has up to two weeks to promulgate it since the passing of the law by the parliament. The law was approved on February 9. The amendment must then be published in the State Gazette after which the bailiffs can no longer seize the energy compensations.

Amending the error took more than a month

January 13: the bailiffs announced that they have to seize the compensations.

January 14: the Ministry of Justice began to draft the amendments bill.

January 20: the amendments bill reached the parliament.

January 24: the Riigikogu Social Affairs Committee debated the bill.

January 27: the bill of amendments reached the parliament plenary sitting; the second reading was suspended for making further amendments.

February 7: second reading of the bill.

February 9: the law amendment was passed.

The law will come in force when the president promulgates it within two weeks.