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Dáil Éireann debate -
Wednesday, 16 Jun 1999

Vol. 506 No. 3

Adjournment Debate. - Pension Provisions.

I am pleased to have this opportunity to raise on the Adjournment the Ombudsman's report, and, specifically, lost pension arrears. As Labour Party spokesperson on older people's issues I compliment Mr. Murphy on the conclusions of his report which are both frank and hard hitting. Given the importance of the decision of our Ombudsman, I believe that it is imperative that we, as legislators, take account of his reports and that, obviously, includes the Government. It is obvious that from 1985 to 1997 the Department of Social Welfare disregarded the legitimate concerns of the Ombudsman on behalf of pensioners and widows. The changes in the system following the 1997 Ombudsman's report could have been implemented at any stage from 1985 if the will to do so existed. It is my considered view that the changes were not made because the Department believed it was dealing with a small vulnerable group in society, the elderly, who due to its circumstances was unlikely to initiate political lobbying.

The report clearly identifies why claims were late: ill-health; lack of knowledge of the social welfare system; widows who, bearing the trauma of their widowhood, were unable to look after their financial affairs for some years following the death of their spouses; prior to 1997 a claim had to be made within three months; incorrect advice on entitlements and so on. I put it to the Minister that none of these justified non-payment of entitlement.

Recently in regard to abuse against children in State controlled institutions the Taoiseach resolved to make good the neglect suffered by too many of our people. A number of years ago women who were denied their just social welfare entitlements as outlined under EU directives were awarded by the previous Government paying the back money to which they were entitled. The Ombudsman's report, published yesterday, on the entitlement of pensioners to receive back money on delayed pension claims is another such case where there is an obligation on the State to right what is wrong.

This country is going through a difficult period. Many of our most important institutions, including the State itself, have been undermined by revelations of wrongdoing or neglect in the past. Standards, although they will never be perfect, had been clearly found to be less than they should be. The positive fallout is a readiness on all sides to confirm that what occurred in the past must now be put right. Fortunately we are living in a period when we can afford to do so. The innate stinginess on the part of the Department which ultimately gave rise to this report no longer has a place in society. If economic growth means one thing surely it is that we can afford not to be mean-fisted. The Minister is not at fault for the current position but the obligation to right it is on him. Ultimately the State has denied members of the public what they are due – a proportion of a pension towards which they contributed all their working lives. The report has identified a number of these cases and I note that the Department has made limited compensation for the unpaid arrears. However, as was the case in respect of equality payments, when a decision is taken in principle it should be vigorously pursued. If I recall correctly the Department, at that stage, placed advertisements in the national newspapers calling on the women who had not initiated claims to do so. A similar approach is appropriate at this stage.

The elderly have made a great contribution to society. Like others they have not been treated well in the past but the excuses which prevailed then no longer apply.

The Deputy should conclude now as he has exceeded the allocated time.

We are living in a different age and should respond accordingly. Our elderly and widows deserve no less.

I am looking forward to the Minister of State's response. I am a little disappointed that the Minister did not see fit to attend tonight to deal with this very serious issue.

The Minister is returning from abroad.

I hope he will deal with the matter. The importance of the issue should not be underestimated. It is clear from the Ombudsman's report that many late applicants for contributory pension had been cheated by the State. That is the long and short of it. We are talking about vulnerable people, the elderly and widows. We are talking about those who made contributions to the social welfare fund or on whose behalf contributions were made by spouses and or employers. We are talking about these people who, in many cases, were not fully aware of their rights and others who might not have been able to exercise those rights following the trauma of the death of a spouse, etc.

Government responses to date on this issue have been partial and niggardly. Many pensioners, particularly those who applied prior to 1997, have been left with a huge shortfall. It is an issue that we must confront and address as we all bear a certain amount of responsibility for it. In October 1986 when this issue was raised in the Seanad I stated, on behalf of the then Government, that the Department of Social Welfare indicated that the question of amending the time limit for contributory pension claims was under examination. That was the brief I received from the Department when the issue was first raised in 1986. The matter has not yet been fully resolved.

It is time for the State to face up to its responsibilities fully and properly. Lack of funds is not an excuse. There is a surplus in the social insurance fund to which these contributions have been made. Unfair, unjust, immoral, mean-minded, fraudulent and duplicitous are some of the adjectives used by the affected pensioners. It is now clear that these expressions of opinion are justified. The Ombudsman has done a major public service in highlighting this gross injustice.

Earlier this month the Minister, Deputy Ahern, attempted to defend the indefensible in reply to a question tabled by my colleague, Deputy John Browne. I am glad that my Labour colleague is to the forefront on this issue as well because there should be a united voice coming from the Oireachtas that it is now time to right this injustice. It is time to confirm that all the money due to those cheated by the State will be paid. What I am seeking from the Minister is confirmation that all outstanding arrears will be paid to pensioners forthwith. That is the least we can do. This issue has been going on for some time and I say this without pointing the finger at this Govern ment. An attempt was made by the last Government in early 1997 to deal with the problem which brought partial relief to some. A further attempt was made in 1998. Let us forget the partial solutions and resolve the matter now.

The Ombudsman, a former Secretary of the Department of the Public Service, rightly highlighted the dangers inherent in the kind of system that led to this gross abuse by the State – the dangers of secondary legislation being put through without debate in the Dáil or Seanad, of having secret arrangements in place where there was discretion but it was like the star chamber court where people were not made aware of the discretionary arrangement in the Department. As they were unaware of it they could not claim it. This is a sorry saga as far as the State is concerned. Let us now face up to our responsibilities and pay all arrears to those justly entitled to them.

The Minister for Social, Community and Family Affairs regrets that he cannot be present because he is currently abroad on Government business. I am happy to respond to the Deputies' comments and I share their concerns about this issue which I have followed for some time.

The issue at the heart of these matters and the report by the Ombudsman to which they relate is the requirement on people with pension entitlements to make their claims within a specified period and the fact that failure to make claims in time results in the loss of arrears of pension. As I am sure the Deputies are aware, these requirements and the attendant penalties were long standing, going back to the inception of the contributory pension schemes. They have been around for over 60 years in the case of widows' pensions and since 1961 and 1970 in the case of old age contributory pension and retirement pension respectively. It will be clear, therefore, that the arrangements have been accepted by successive Governments over a prolonged period.

In recent years, these provisions came in for criticism and generated a volume of complaints to the Ombudsman from pensioners who were adversely affected by them. These complaints culminated in a formal investigation by the Ombudsman under section 4(2) of the Ombudsman Act, 1980, of complaints by three pensioners who were adversely affected by the arrangements. The Ombudsman's report of his investigation in these cases and of the general issues arising therefrom was published on 14 March 1997. In this report, the Ombudsman made a number of recommendations, all of which were accepted.

The current report by the Ombudsman on this issue presents an overall account of his engagement with these issues since 1985. The report deals with the various improvements which have been made up to now and presents an analysis of the manner in which the Department has responded over time to the complaints and criti cisms raised by him. It is important to emphasise that the report is not the opening chapter on a new problem, but the culmination of a process that has spanned a number of years.

The Ombudsman says that the issue dealt with in this report represents an historical problem which, in the light of developments in the past few years, has now been significantly ameliorated. He also accepts that because of improvements made since 1997, the pensions arrears issue is unlikely to be of major concern to his office, and that his report marks the end of his office's involvement with the issue.

The Department is actively engaged in identifying potentially eligible pensioners under the latest improvement affecting claims made prior to January 1997 and has already made payments to more than 700 pensioners. The extra-statutory provisions relating to contributory pensions covered by the Ombudsman's reports on late claims have now been replaced by statutory provisions. It is intended to deal with the remaining instances of extra-statutory provisions in the same way. The report will be carefully examined and the Ombudsman's findings will be borne in mind in the context of the future development of the social welfare system.

The latest report from the Ombudsman gives detailed information on the various improvements, legislative and otherwise, which have been made in relation to the late claims issue. In particular, I refer the Deputies to pages 11, 12 and 13 of the report in this regard. In doing so, I draw their attention to the fact that the Ombudsman's first special report on this issue was published in March 1997 when they were in Government and that the Government which they supported had the opportunity to deal fully with all the issues. This was not done. I acknowledge changes were made by that Government in response to the 1997 report, but they were confined to claims made in that year or thereafter and left all other cases, which comprised the bulk of the complaints received by the Ombudsman, untouched. These changes were made in the 1997 Act, which extended the limit on back-dating payments in contributory pension claims from six to 12 months.

Since coming into office, the Minister for Social, Community and Family Affairs made regulations in February 1998 under which a proportion of arrears due in respect of the period beyond 12 months may also be paid. These regulations also provide for the possibility of full arrears in cases where claims are delayed due to force majeure, proven incapacity on the part of the applicant or to departmental error, and also to alleviate current financial hardship. These provisions were designed to strike a balance between the need for effective management of the system and appropriate recognition to be given to cases of genuine hardship or difficulty.

While these provisions represented an improvement on the previous position, the Government was concerned that a significant number of pensioners who applied for a pension prior to 1 January 1997 did not benefit from these improvements. I am happy to say, therefore, that provision was made in this year's budget for the payment of proportionate arrears of pension in the case of late claims made prior to 1 January 1997 in respect of retirement, old age contributory, widow's and widower's contributory pension and orphan's contributory allowance. Payment of proportionate arrears of pension due under these new arrangements is continuing.

Proportionate arrears are not enough. The full amount should be paid.

The Department is identifying the pensioners affected by this latest development and arrears are being issued automatically to those concerned.

The full amount is required.

Proportionate arrears are not enough.

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