Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Seanad Éireann díospóireacht -
Wednesday, 23 Jun 1999

Vol. 159 No. 19

Report of the Ombudsman on Lost Pension Arrears: Statements.

I read with interest the report of the Ombudsman on lost pension arrears. In view of the Minister's record I am reluctant to describe him as a Scrooge, but I believe the ghost of Christmas may return to haunt him on this matter. The report is disturbing. As Christians and citizens we are supposed to show special care for our elders and those who have reared and looked after us. The report makes it clear there is a need for us to do better in this regard.

I appreciate late claims were made and penalty rules apply to late claimants. However, neither the public nor applicants had any knowledge of the discretionary powers of the Department with regard to payments. In this regard, the report highlights a strong sense of grievance. Those involved feel slighted and are outraged at what has happened. The report quotes from various letters submitted to the Ombudsman. They detail specific grievances.

It is significant that it took from 1986 to 1997 for the investigation report to be issued. It raises the question of what would have happened had there been no Ombudsman to investigate this matter. The benefits to post-1997 applicants were awarded because of the work undertaken by those who submitted applications before that date but who did not receive benefits. There is a need to look at the process of statutory instruments and the duty of this and the other House to ensure they are properly implemented.

There is a comfort aspect to social insurance, yet that is not what happened in this instance. As a middle aged woman who used to work in the home I empathise with the position of some of those involved, although they probably did not even have access to knowledge of their family finances. In many instances they did not know their husbands' total earnings, nor would they have been aware of pension entitlements other than the widow's pension. We are all aware of people in this position.

Control of information can have damaging consequences. In some instances individual partners were not to blame, nevertheless, it is clear that the lack of information given to these people is very disturbing. If we can agree on a procedure to prevent a recurrence we will have achieved much.

According to Mr. Butler in the Ombudsman's office, women who remained at home to mind their children and had no welfare entitlements of their own would often be unaware of their husband's social insurance payments. He goes on to point out that even if they had made a mistake, widows would have expected the social insurance fund to cover them.

While we are all wise after the event, the failure to accept the sincerity of the applications and that they were made in good faith is regrettable. So also is the very limited use of the discretionary powers and the fact that they were not made known to so many people. The report states:

Perhaps the most striking feature of the extra-statutory arrangement was that, in effect, it was kept secret! Pensioners who were being refused substantial arrears were not told that there were grounds on which some or all of the arrears might be paid.

I find it difficult to accept that it was decided to handle matters in this way. I am delighted the episode is now out in the open because it will help to ensure that it is never repeated.

The report says that applicants were refused because their delay in claiming was the result of bad advice given by an official of the Department or because they were unable to manage their affairs due to medical incapacity. It also goes on to outline how applicants were prevented from claiming due to force majeure and how pensioners are currently suffering financial hardship and have a level of financial indebtedness which cannot reasonably be met from current income.

There has been woeful discrimination in this area. After 12 years those affected only obtained the benefit of the two years from 1997. Treating pensioners in this manner is particularly unjustified given that many of them are not in the best of health and do not have similar social contacts to those who work, especially when compared with the women who obtained the benefit of the equal treatment directive. They were able to band together in large numbers, approximately 60,000 according to this report, to seek redress through the courts. It is noteworthy that no court action was ever taken by pensioners because their grouping is too disparate and members are lost through old age and death. They do not have a strong body to represent them at all times.

Two main areas need to be addressed. A lack of information is a terrible control on people. I acknowledge that the Department has produced many leaflets and other publications on every aspect of social welfare entitlements. How can these be delivered to the people who need them? How can people be acquainted with their rights to avoid such events recurring? I do not know if it is possible. Perhaps, we should think in terms of an information pack that is automatically sent to individuals when they have registered the death of a spouse so that they are informed about their entitlements. Life is complex and many people do not even visit libraries any more.

I wish to address briefly the control of secondary legislation and the Ombudsman's conclusion in this regard. Previous Ministers in the Department were party to secondary legislation but the current Minister could take on board the reasonable wish to examine the position that pertained prior to 1997. The letters speak for themselves and the Ombudsman's report is very detailed. It states:

Whereas secondary legislation remains a necessity – and I do not deny that – there is a real need for a mechanism which enables Parliament to satisfy itself that the secondary legislation does not amount to usurpation of any of those powers which belong to Parliament alone. Interestingly, this very point was raised by the Supreme Court in a recent judgment.

The judgment is then quoted.

I cannot pretend that the Minister has been a naughty schoolboy and must be whacked for not attending to his duties properly. He has previously outlined why he cannot disperse more funds to certain areas but, in this instance, when his Department has been found wanting in its implementation of what amounts to a social insurance fund, he should take the report on board, particularly, in regard to the payment of further arrears.

Whatever epitaph will be written about me as Minister, I am happy to remind the House that in the short time that I and the Government have been in office, we have delivered the largest increases in social welfare payments, particularly to old age pensioners. I have dealt with an issue raised continuously in both Houses, namely the over 56 years old self-employed pensioners. Senator Ridge referred to the difficulty people have on the death of a family member. I increased the death grant by 500 per cent in one fell swoop. There was a 40 per cent increase in the carers' package this year on that delivered last year – it is £63 million this year compared to £45 million in 1998.

In the three years I have been in office I have allocated resources far in excess of any of my predecessors, including, for example, the allocation of security alarms to the elderly. I introduced the farm assist scheme, and the president of the IFA said in the Irish Farmer's Journal that it answered all the requests farmers had made after 40,000 of them protested on the streets of Dublin. Indeed, I have overseen the largest drop in the live register in the history of the State. My record and that of the Government speaks for itself.

I particularly welcome the opportunity to discuss the report of the Ombudsman on the issue of late claims for contributory pensions because there has been a great deal of ill-informed comment about this issue, particularly in regard to the Government's reaction. I hazard a guess that many people who commented on this have not fully read the report. People should do so before they make any further comment.

I agree fully with the Ombudsman that the old position in relation to backdating claims was overly restrictive. When I took office in June 1997, shortly after the publication of the Ombudsman's first report on this issue in March 1997, I found that my predecessor, Deputy De Rossa, had already taken the first step to try to resolve this issue. I went further and introduced regulations in February 1998 which provided that full arrears could be paid in certain circumstances – I will outline them later – and, in line with the Ombudsman's recommendations, all late claimants receive a portion of the arrears to which they would have been entitled had they claimed in time.

The previous Government had only addressed the position of post-1997 claims leaving claims made before then, which had given rise to the Ombudsman's investigation in the first place, largely unaffected. I do not say that to score a political point, but because it is important. The Government and I felt strongly that it would be inequitable not to address this situation. Accordingly, I made a strong recommendation and the Government agreed to put in place a special payment of arrears to persons who had made claims before 1997 at an estimated cost of £10 million. I am glad that the Ombudsman acknowledged that as a result of the developments in 1997 and 1998 the issue is now "an historical problem".

To deal with the substantive issue, I emphasise that the report is not the opening chapter of a new problem, but the culmination of a process that has spanned a number of years. The recent report, as he said, represents an overall account of his engagement in this issue since 1985. It deals with the various improvements which have been made and represents an analysis of the manner in which my Department has responded to the Ombudsman's recommendations.

It is important to emphasise that the report does not include recommendations for further changes in the provisions affecting contributory pension applications. The Ombudsman stated that the issue dealt with in the report represents an historical problem which, in light of developments since 1997, "has now been significantly ameliorated". He also accepted that because of the improvements made since 1997, when this Government came into office, the pension arrears issue is "unlikely to continue to be of major concern" to his office and that he "intends this report to mark the end of his Office's involvement with the general issue of lost arrears of contributory pensions". The background to the Ombudsman's investigations and his special report lies in the requirement on people with pension entitlements to make their claims within a specified period and the fact that loss of arrears of pension arose from failure to make claims in time. This principle is not unique to Ireland and applies in most, if not all, social welfare systems. Our nearest neighbour recently tightened its rules in relation to late claims which are now considerably more restrictive than those applying in this country.

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 the Ombudsman Act. The Ombudsman's previous report of his investigation into 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 report contained a number of recommendations of a general nature. These included changes or improvements which have been put in place and, in the case where the development of computer systems is required, provision is included in my Department's development plans for the computer systems supporting pension payments to accommodate the relevant recommendation. The general recommendations also concerned the use of the delegated authority to make extra-statutory payments in certain cases. For the information of the House, I will give some background to the provision of these extra-statutory payments which, by definition, are outside the terms of the law.

As I indicated earlier, the limitation on backdating late claims has been a feature of the system in question for lengthy periods. The application of these provisions prevented payment of pension arrears in some circumstances which were seen as very harsh and unjustifiable to the Minister and the officials of the time. To overcome these difficulties and to enable payment to be made in circumstances where they considered it just to do so, proposals were put to the Department of Finance and agreed by that Department over 40 years ago to deal with these cases on an exceptional basis by making extra-statutory payments.

It must be stressed that these arrangements were intended for use on an exceptional basis because they involved the making of payments outside legal provisions. Furthermore, the annual accounts carried details of the extent to which these arrangements were used. In the case of contributory pensions, this information was contained in the accounts of the social insurance fund which are laid before each House under the relevant Act. There was no secret about these arrangements. They were put in place as a result of an initiative which deserves to be commended and were used down the years in the way their authors intended to deal with cases where pensioners complained about loss of arrears and where the reasons volunteered came within the categories covered by the arrangements. It was never intended that the arrangements would have widespread use.

The staff of my Department who decide claims have been very unfairly attacked because they tried to use these arrangements responsibly. These officials have been accused by one commentator of being "uncivil and self-serving" and of being more concerned about the public purse than the pensioners' entitlements. Within the social welfare code, entitlements are determined by and in accordance with the legislation. It is a fundamental feature of our system that entitlements are based on legislative rights. Moreover, officials charged with administering schemes to which entitlement is enshrined in legislation cannot, and did not, behave in a cavalier manner in the application of the law. They have acted at all times with integrity and I totally reject unwarranted attacks of this nature which distort the truth and do a huge disservice to public administration.

My Department is acknowledged as a leader in the Civil Service in fostering a strong customer service culture over the past number of years. Staff have been to the forefront in this process and are providing a quality service that is fair, courteous, efficient and personal. The commitment by staff of my Department to high quality service is widely acknowledged in the Oireachtas and by our wide range of customers. As recently as the conclusion of this year's Social Welfare Bill, I was pleased to convey to my officials the glowing comments of Senators on all sides on the way in which my staff deal with them and their constituents. The excellent level of satisfaction with our service expressed in customer surveys and through customer panel groups is indicative of this commitment. The feedback from our customers specifically acknowledges the high levels of courtesy, politeness and knowledge displayed by staff with whom they have dealt.

The extra-statutory arrangements, involving as they do payments outside the law, were never an appropriate vehicle for a widespread response to the issue of late claims. The proper way to respond to demands for a more lenient regime is through amending legislation and the extra financial provision to meet the increased expenditure arising. This is how the Ombudsman's recommendations have been accommodated.

The recommendations of the 1997 report asked the Department to provide all late applicants, who are not receiving full arrears, with information on the circumstances in which pension arrears may be paid on an extra-statutory basis and also indicated that in the case of delayed contributory pension claims, the Department should, in the absence of an appropriate amendment to the regulations, exercise its current extra-statutory discretion to pay arrears of pension up to the level of full arrears where the delay arises due to an error for which the Department has some culpability; failure to pay the arrears would result in hardship for the claimant, and the delay arises due to some mental or physical incapacity on the part of the claimant, or as a result of events or circumstances, including situations of force majeure, outside the claimant's control and where to withhold arrears would be inequitable.

The report further recommended that the Department should, as a matter of urgency and no later than six months from the date of the report, give further and serious consideration to cases not falling within these categories with a view to mitigating the adverse effects on late claimants so that any penalty suffered would be more in proportion with the failure, whether through ignorance or bad advice, to claim on time. As I said, all the recommendations in the report were accepted. Claims outside the period covered by the new legislation in this area are being determined on the basis of these recommendations. Discussions are ongoing with the Ombudsman's Office on a number of cases in which there are outstanding complaints.

The Social Welfare Act, 1997, which was introduced by my predecessor, incorporated the provisions on late claims which had been in the regulations into primary legislation. The maximum period for which arrears of contributory pensions could be paid was extended to 12 months – it was previously six months – in respect of claims made after 1 January 1997. Regulations made by me in 1998 under powers in the 1997 Act provide for the payment of arrears beyond 12 months on a proportional basis. These regulations also provide for the possibility of full arrears in certain circumstances where cases are delayed due to force majeure, proven incapacity on the part of the applicant or 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 for appropriate recognition to be given to cases of genuine hardship or difficulty. The extra-statutory arrangements for late contributory pension claims were withdrawn in the light of the legal entitlement provided for under these regulations.

While these provisions represented an improvement on the previous position, I and my Government colleagues were concerned to ameliorate the position of the significant number of pensioners who had applied for pension prior to 1 January 1997. As I said, any changes made by the previous Government related only to post-January 1997. An estimated provision of £10 million was made 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 pensions and orphan's contributory pension. Payments of proportionate arrears of pension due under these new arrangements is continuing. My Department is identifying the pensioners affected by this latest development and arrears are being issued automatically to those concerned.

I wish to comment on a number of specific issues raised in the Ombudsman's report. The first concerns the fact that time limits affecting late claimants were in secondary rather than primary legislation. The second issue is the related one that "There is no effective monitoring and supervision of secondary legislation by the Dáil and Seanad". As I stated, the relevant provisions have now been incorporated into primary legislation in section 32 of the Social Welfare Act, 1997. The report also mentions that while section 32 links the disqualification for late claiming to the prescribed time for claiming, it is the Minister and not the Oireachtas who defines the prescribed time.

The prescribed time for claiming is three months after the date of entitlement in the case of pensions covered by the Ombudsman's report. If claims are made outside this period, full arrears are payable for up to 12 months so no disqualification arises on contributory pension claims made within 12 months of entitlement. Where claims are delayed for more than 12 months, proportionate arrears are payable in all cases.

Regarding the related issue of adequate supervision of secondary legislation by the Dáil and Seanad to ensure that what is being done under its authority conforms with its intentions, the passing of the 1997 Act should put this question beyond doubt in relation to the issue of late claims. Under the authority given by the Oireachtas, regulations made by the Minister in this instance must be laid before each House of the Oireachtas and either House has the power to annul the regulations by passing a resolution to that effect within 21 sitting days. The initiative lies with each House under the provisions of the particular legislation.

I will be happy to facilitate the Oireachtas in any way possible in order to achieve meaningful supervision of social welfare regulations by it. The Joint Committee on Family, Community and Social Affairs has played and could continue to play a valuable role in this regard. Last year it had a useful discussion on the regulations on availability and searching for work. I will discuss this matter with the committee in the near future.

The third issue concerns the publication of discretionary powers. In accordance with the Freedom of Information Act, all guidelines used by staff in processing claims for social welfare benefits are available and published on the Department's website. All affected claimants are now being advised of the circumstances in which further arrears may be payable.

The fourth issue considered was the question of policy and whether time limits for late claims were compatible with the concept of social insurance. Elsewhere in his report the Ombudsman accepts that time limits should apply in certain circumstances. I understand his comments to relate to the old time limits, which are now significantly relaxed.

The fifth issue raised was in the form of a question – why was action not taken on this issue much earlier than 1997? For my part I made regulations shortly after coming to office to address the Ombudsman's complaint of lack of proportionality, by providing for proportionate arrears on a sliding scale for post-1997 claims. I also obtained Government approval for proportionate arrears in the December 1998 budget for pre-1997 claimants. To be fair to my predecessors, improvements cost money and must be considered in the context of competing demands and priorities at the time, both social and economic.

Finally, I note the Ombudsman's comments on the last budget's response to the overall problem. As Senators will be aware, the issue of late claims was only part of the pension issues facing me when I came into office. I am delighted to say that, in addition to the response on the late claims issue, I also received Government approval for additional expenditure of £18 million per year on a new pension for those self-employed persons excluded from entitlement to pension because they were over 56 years when social insurance was extended to the self-employed in 1988. In addition, as I have said on many occasions, I have asked my Department to examine the issue of pre-1953 contributions, which has also been raised with me by Oireachtas Members. I feel strongly about this issue. My officials and I are determined to ensure to the best of our ability that all genuine issues raised by widowed and eld erly people, including those issues brought to our attention by the Ombudsman, should receive the highest priority.

It is my understanding that the long-held objective of the Ombudsman on the issue of late claims was to ensure that the loss to pensioners would not be disproportionate to their failure to claim in time. I thus provided for proportionality in regulations made on the basis of the power in the 1997 Act. This power concerned claims made on or after 1 January 1997 and was designed to effect change on a current basis.

As I stated, I was concerned that earlier claimants were excluded altogether and I put to Government proposals, which I considered to be a reasonable response in the circumstances, to ameliorate the position. These improvements provide for proportionate arrears at a level approximately half that applicable to post-1997 claims. The arrangements have been widely welcomed by those benefiting from them. To date, arrears have been paid to 706 pensioners or personal representatives where they had been in correspondence with the Department or where the Department has identified that arrears are due. A total of £1.3 million has been paid to date. The Department's pensions computer system is currently being searched to identify additional pensioners who will qualify for proportionate arrears payments under these arrangements. I assure the House this is not an easy task.

It is a long-standing requirement of our legislation that claims should be made within a certain time and payment of arrears may be affected by failure in that regard. Similar provisions are a feature of legislation in other countries, as I said earlier. These restrictions are justified by the need to exercise supervision and control of claims, sound financial management and to control public expenditure. In his most recent report, the Ombudsman acknowledges that these concerns are genuine.

In an ideal world there would be no late claims. The expansion of the social insurance system and my Department's excellent information service mean that more people are aware of their entitlements. The next generation of information technology will allow us to go further and enable us increasingly to identify people who may have an entitlement to a contributory pension and to prompt them to make a claim. These developments will have a marked influence on the number of late claims received.

In the meantime, the provisions which have been put in place mean that all people with late claims now receive either full arrears, in the circumstances I set out, or a significant proportion of the arrears over the whole period of their claims. It is estimated that, as a result of the measures introduced in 1997 and 1998, about £3 million per year is being paid in respect of late claims. I am pleased to have been able to ensure that the recommendations made by the Ombudsman have been fully accepted. Work is well in hand to effect payment of arrears due under the initiatives I have outlined.

I thank the House for the opportunity to respond to this issue, on which there has been some ill-judged public comment. As long as I am Minister for Social, Community and Family Affairs I will do my level best to ensure that anomalies, particularly for pensioners, are ironed out. I have made a commitment to look at an issue which is dear to many inside and outside the House, that of contributions made before 1953. We are examining how we can handle that bone of contention.

I welcome the opportunity to discuss the Ombudsman's report. In a way the Ombudsman is complimenting the Minister and the Government on the actions they have taken since coming to office in 1997. My esteemed Opposition colleague said the Minister was being a Scrooge in this instance.

I said he was not a Scrooge.

A number of months ago we complimented him on the Social Welfare Bill. The tag of "Scrooge" is unfair and unwarranted in this case, when one considers what he has done. This issue relates to contributory pensions for the elderly and in that regard he has been more generous than any other Minister.

In his report the Ombudsman states this is not a new phenomenon but has occurred over a number of years. He does not expect it to be of major concern, because of the Government's action, and calls it an historical problem. Unfortunately, such comments, which are true, do not get media attention but it is easy for the media to produce stark headlines or snippets.

We frequently hear from the Opposition about our buoyant economy and large surplus and it is easy to jump on the bandwagon and say that money should be given to various needs. As Senator Ridge said, we are often wise after the event but in this case the Minister has been wise since taking office. The previous Minister, Deputy De Rossa, set the wheels in motion for dealing with lost pension arrears, but initially it was only backdated for that specific year, for six to 12 months. The Minister has surpassed that by providing for proportionate arrears.

The Ombudsman's report states that some of the special circumstances have been taken into account. It was unfair that it happened but many people have received arrears as a result of the Minister's actions. Those who were most affected, particularly widows and many who have contributed a great deal to society by paying into the social insurance fund, are often those who receive the least. If one is paying into a fund all one's life one is not as aware of all entitlements. Without being disrespectful to those on social welfare, people who receive such payments for a number of years are very aware of their entitlements, not only their primary but also their secondary bene fits. People who are not from that part of the community are not as knowledgeable about their entitlements but we should not be critical of them. The Ombudsman stated in a number of cases that he does not expect this to be of major concern but there is a problem with people making late claims, either because they are incapacitated, have a lack of knowledge or have obtained incorrect information from officials. We should try to identify ways in which we can make people more aware of their entitlements. As people near retirement age they should receive information – perhaps with their final P45 – about their entitlement to pensions. The same applies to widows and widowers. There should not be any difficulty giving information to those individuals. I realise it can be a difficult time for the people concerned, but they have to obtain other documentation, such as a death certificate for their spouse. More emphasis should be placed on making people aware of their entitlements.

In my own dealings with officials and staff in the Department of Social, Community and Family Affairs I have found them to be the most courteous and helpful compared to any other Department. Their customer service is second to none in terms of the number of booklets they supply which are written in concise language. In the past we often complained that one would need a degree to be able to understand some of the questions being asked. It would be unfair to be critical of the Department in that regard because I find them extremely courteous at all times.

No matter how good the system, there will always be some people who fall through the net, either because they do not claim in time or do not want to be seen to make a claim. We should consider where we go from here in terms of ensuring that people are aware of and claim their entitlements. The Ombudsman states in his report that this is an open and shut case. We have discussed this matter over many years but it is only since 1997 that real action has been taken. I hope the issue can be addressed in a much more constructive way.

I was delighted to hear the Minister say he will deal with the question of the persons who paid contributions before 1953. They are now the elderly in our community but, unfortunately, they have been forgotten. They are few in number and it would be a justifiable acknowledgment of their contribution to society if this issue were addressed. I look forward to hearing what the Minister proposes to do about this in the next Social Welfare Bill.

If people read the report in its totality, rather than selecting one or two snippets, they would understand that the Ombudsman is complimenting the actions that have been taken. If they read it I am sure they would agree with me in that regard.

I welcome the Minister to the House and commend him for the action he has taken on this matter. When he took office he acted with alacrity to address the problem that existed and introduced regulations in February 1998. Those regulations provided that full arrears be paid in certain circumstances to people who made late claims.

Elderly people run a mile from anything that looks remotely like an official document. They are reticent about completing anything of that nature. It is important that the Minister and the Government have addressed the difficulties that obtain in these circumstances. The Minister has brought forward the necessary amending regulations to deal with the problem.

The action in relation to the private sector is important also because people who worked all their lives had nothing to fall back on in the winter of their years. That has been addressed in the main. Like my colleague, Senator Leonard, I am delighted the Minister will deal with the pre-1953 issue. It is important and it is the stated intention of the Minister and the Government to address the matter.

We could talk until the cows come home about late claims, but applying for pensions or anything else, on time is a prerequisite to bringing any application to a satisfactory conclusion. Senator Leonard made a suggestion in that respect that the Minister might consider taking on board. I am a public representative of long standing and my clinics are taken up with people filling in forms to apply for something they should have applied for many years ago. They did not know they were entitled to benefits. When people reach pension age, they should be advised of their entitlements. I do not know the system that currently obtains but there should be some mechanism to alert them to the fact that they should apply for their pension. I have dealt with that problem for 20 years in public life and it is one that will continue.

I do not want to repeat what has been said already. I listened to the Minister's contribution and those of Senator Leonard and other Senators. There is a central theme running through the Ombudsman's report. It highlights the inequities in pension arrears but it also states that the Minister has significantly addressed the problem. That should be pointed out.

I congratulate the Minister. He has set himself further tasks in relation to the matters contained in the Ombudsman's report and has gone even further. I wish him well in his endeavours and assure him he will have my support and the support of all the Government Senators in this House, as well as that of all fair-minded people on the other side of the House.

I welcome the Minister to the House. I read the Ombudsman's report with a sense of disappointment in that it has taken so long to seriously seek to address the obvious grievances experienced by vulnerable members of our society – widows and old age pensioners.

The title of the Ombudsman's report, Lost Pension Arrears, speaks volumes. There is a clear implication that the arrears were due, that they were lost and should have been paid. The title also refers to a review of complaints to the Ombudsman regarding unpaid arrears of contributory pensions where the claim is made late. The Ombudsman outlines clearly the area of complaints and details the unsatisfactory responses made to him over the years by successive Administrations. He believes there has not been an adequate response. These are entitlements which those involved are due. There should be no proportionality, penalties, limited payment or specific period during which arrears will be paid fully and only a proportion paid later. This is the underlying message of this document. The message from the Government benches is not that the matter has been dealt with satisfactorily. This is the only fair and honest way to approach the issue. There should be full payment of arrears due to widows and old age pensioners. Why should these people be penalised for failing to apply at the appropriate time for their entitlement? This is a contradiction. If one has an entitlement, that entitlement should not be restricted by any order or regulation imposed by a Minister or civil servant.

The Minister must face up to the fact that these entitlements must be acknowledged and adhered to. What is the alternative? The Ombudsman has been receiving complaints since 1985. The first serious attempt to address this matter was in 1997. However, the attempt to address the situation has been grudging. The Minister said that this problem is not unique to this jurisdiction, that these restrictive practices take place in other countries, but that does not make them right.

The Minister indicated that payments can be made on an extra-statutory basis. Why is an "extra-statutory basis" needed to give people their entitlements? It was stated that these payments can be made at the discretion of the Department, a discretion that has never been publicised and about which no one knows anything. When my colleagues and I spoke to the Department about arrears of pensions for old age pensioners, widows and widowers, we were told that the only discretion was three months or six months. This is not good enough.

This money will now be paid on a proportionate basis and the Minister is making available £10 million. No penalties should be involved. Why should there be a penalty for late application for entitlements? I would go further and suggest that not only is the wrong approach being taken by the Department in grudgingly giving a greater proportion of arrears in lieu of entitlement, but the onus should be on the Minister and the Department to ensure that people who are entitled to their pension will receive it. Anyone who reaches the age of 66 should be informed and paid automatically rather than putting the onus on them to make the application. The contributions have been paid by the employers and employees and the money rests in the Exchequer. This contract was entered into either by the deceased's spouse, in the case of a widow or widower, or an old age pensioner when waged or salaried.

I believe the finding of any test case would be that constitutionally this is an unfettered, unrestricted entitlement because of the nature of the contributions and the entitlement which exists, and that the Minister would be obliged to pay the arrears. It might even go a stage further and state that the Minister might be obliged to pay the arrears, plus interest due, because it might be perceived as negligence not to ensure that people got their entitlements under the Constitution.

The document is about lost pension arrears, unpaid arrears of contributory pensions where the claim made is due. I would like the Minister to address this point. I am sure this will come home to haunt us because, within a relatively short time, we will face further complaints from old age pensioners. Together with the hundreds of complaints referred to by the Ombudsman, we will find that the response made is not adequate or sufficient to deal with this issue in a fair and honest manner under the Constitution.

The key question is whether this is an entitlement and whether the contributions made during the working life of these people were on the basis that social insurance will be provided for the spouse of the deceased or for an old age pensioner. The other question is whether the Government has guaranteed the money will be used to make payments to these people on an annual basis for the remainder of their lives. Is it a failure on the part of the Government, and specifically on the part of the Minister, if these payments are not made? This is the nub of the problem. The Minister should address this question and ensure that everyone who has an entitlement will receive that entitlement.

Sitting suspended at 5 p.m. and resumed at 6 p.m.
Barr
Roinn