The money for refunding water charges should come from underspending, according to Labour.

Housing spokesperson, Jan O'Sullivan TD, called on the Government to guarantee that the housing budget will not be tapped to refund the charges.

Deputy O'Sullivan said: "Minister Donohue has said that the money for refunding water charges could come from underspending.

"However given the extent of the housing and homelessness crisis, it would make no sense to dip into any unused funds in that department to put towards paying back water charges.

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"As of the end of October 2016, the Department of Housing had an underspend of €90 million, however significant spending happens towards the end of the year.

"For many years it has been the practice that Local Authorities increase their housing spend significantly towards the end of the year, and it would be completely misleading to conclude that any underspend around budget time would imply that money can be taken from Housing and spent elsewhere.

"The previous Minister Simon Conveney indicated to me at the time that should there be any underspend at the end of 2016, he would consult with the Department of Public Expenditure and Reform as to the 'appropriate use of the resources concerned'.

"In light of the announcement this week in which the Government outlined its intention to refund water charges, I would call on both Ministers Donohue and Murphy to ensure that the housing budget is left untouched in this regard."

(CD/MH)