Oifig an Runai,
An Roinn Leasa Shoisialaigh,
Aras Mhic Dhiarmada,
Sraid Storais, Baile Atha Cliath l.
Office of the Secretary,
Department of Social Welfare,
Aras Mhic Dhiarmada,
Store Street, Dublin l.
Tel: (01 ) 8748444. Fax: (01 ) 7043721
Your Ref: .
Mr. Pat Whelan
Director
Office of the Ombudsman
52 St. Stephen's Green
Dublin 2
26 February 1997
Dear Mr. Whelan
Re: Mr
Mrs
Mrs
Thank you for your letter of 17 January enclosing the draft report on the Ombudsman's investigation in these cases. I appreciate the extension to the time limit for my response which has facilitated fuller consideration of the draft report and the issues which it has raised.
There now follows information on a number of significant developments relevant to the matters you have raised, that I would like to touch on briefly as well as some general comments. Detailed comments on the various paragraphs in the report are also attached.
Review of provisions
The Department's view in relation to the back-dating issue, which is at the heart of the complaints under investigation, has always been and continues to be that there has to be a cut-off point for the making of claims in general, both insurance and non-contributory, for reasons which we have already elaborated. The general rule prescribed in Regulation, has been to allow claims for up to six months; this was regarded over the years as a reasonable period of time for persons to make claims.
As you are aware, the whole back-dating issue has been the subject of a review by the Department since May 1995. This review took into account, inter alia, various concerns expressed by the Ombudsman in his annual reports; the considerations arising from the ongoing review of customer service; the practical administrative concerns relating to the proper control of scheme management and scheme expenditure; and the overall cost implications in the light of the many demands on the social security system arising from the needs of various groups and individuals.
I am glad to say that a number of proposals for significant improvements to the current arrangements have now emerged from the review which I am confident will be welcomed and which will be relevant to your report and recommendations.
6 Month Period
The six month period has come in for particular criticism in the recent past in particular from the Ombudsman's Office. In this connection, I am glad to report that, as part of this year's Budget package, the Minister for Social Welfare is extending, for new claims made on or after 1 January 1997, the six month' period to twelve months for Social Insurance pensions- viz Old Age (Contributory), Retirement and Widow(er)s Pensions and Orphans (Contributory) Allowance.
Status of the regulatory provisions
The Regulations governing back-dating have existed for many years and have been applied under successive Ministers for Social Welfare. Their continued existence may reasonably be interpreted as an acceptance of the provisions. The question has been raised, however, concerning the appropriateness of having these provisions in secondary legislation and the Minister has decided, with Government approval, to put the provisions into primary legislation. The necessary amendments are included in this years Social Welfare Bill which has just been published and which, if passed, is expected to be enacted before the Easter recess. This measure should help remove any doubt your Office may have about the intention of the Oireachtas in relation to this matter.
Deeming claims made where person is already in receipt of related social insurance payment
The Department has been considering the question of deeming claims as being made where the person is in receipt of a related payment. This arises where, say, a person is in receipt of a Widow's or Invalidity Pension and fails, for whatever reason, to 3 claim an Old Age or Retirement Pension. The legislative provisions, as you know, allow for acceptance by the Minister of claims in such manner as he may accept as sufficient in the circumstances. The Minister has now decided that in all cases where a person is in receipt of a related weekly pension, this may be accepted as a claim and the claim processed on that basis. This initiative will give greater flexibility to the awarding of claims to persons already on the social welfare system.
Information on entitlements
The Department has been examining the issue of providing as much information as possible to potential claimants. This arises in part as a result of the Department's on-going review of customer services under the Strategic Management Initiative. The provision of information to people is one of the areas that is being developed and a number of initiatives have been taken over the years.
The Department provides information to people about possible entitlements at pension age. However, there is no audit trail of such information. To remedy this, the Department is putting in place arrangements for the future to ensure that a record is kept of such notifications. In addition, it will use advertisements to reach those who are not benefiting and also anyone who fails to claim in response to the direct mailshot(s).
Extra-statutory authority
The question of the existing authority to make extra-statutory payments has also been raised. I think it is important to point out that this authority was granted nearly 40 years ago. The general intention was to ensure that where difficulties arose due to official errors, hardship or equity considerations and which were not covered by the legislation, then the matter could be resolved by way of extra statutory payment. This authority has been used on many occasion over the years and the total amounts are included in the Appropriation and Social Insurance Fund Accounts for the Department each year. The authority to make an extra statutory payment in any other case where the Minister is satisfied that payment should be made in equity or to avoid undue hardship has been used over the years where there were recognised cases of hardship or where there was a case in equity. It was never intended that it would have wide-spread use and to do so would be to diminish the authority and undermine the statutory framework within which the schemes operate. Wide-spread use of the authority would inevitably call into question the authority itself. Nevertheless the application of this authority will be re-assessed in the light of the experience to be gained from the above-mentioned improvements to the back-dating issue generally.
Costs
As a final general observation I should point out that the costs of making improvements in social welfare schemes must be considered in the wider context of the overall economic and social policy of the Government and the constraints imposed by international obligations etc. This inevitably gives rise to choices having to be made between competing demands. The particular restrictions which are at the heart of the complaints in these cases are, as the draft report brings out, of long standing, applying from the inception of the OACP and Retirement schemes in 1961 and 1970 respectively. Any further amelioration of the position would give rise to additional costs and would have to be considered in an overall budgetary context. In this regard I would point to the tripartite nature of the funding of Social Insurance payments which involves an Exchequer subvention to meet the deficit in income over expenditure. Accordingly, cost-increasing changes in contributory benefits will, in the ordinary course, add to the level of Exchequer funding required to meet the deficit.
Cases in question
The three cases in question have been, once again, reconsidered and reviewed in the light of your draft report and of the improvements being made to the back-dating situation.
It has been decided in the light of all these circumstances to award the claims in the case of Mrs to her 66th birthday in December 1985 and in the case of Ms to her 66th birthday in March 1990. Payment of Retirement Pension at age 65 would not be in their interests, affecting as it would other entitlements at that time. We are deeming the claims in payment at age 66 as claims for Old Age Contributory Pension in the particular circumstances of each case.
In relation to Mr. , the proposed amendments to the primary legislation (which have yet to be debated in the House) and extension of the 6 month back-dating to 12 months will not, in their present form be relevant as they are intended for application to new claims arising from 1st January of this year. Also, it is not considered to be a suitable case for application of the extra-statutory authority as it is applied at present.
E. McCUMISKEY
Secretary