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Annual Report of the Ombudsman 1994

Chapter Three - Selected Cases

Department of Social Welfare

People who are the subject of adverse decisions should have these decisions clearly explained to them. They should also be advised of all avenues of appeal, including the existence of this Office.

Widow's Pension not claimed because of bad advice

The complainant in this case was widowed in July 1985. Shortly after the death of her husband, she asked at the local employment exchange whether she might be eligible for a Widow's Pension from the Department of Social Welfare. She was advised that she would not be eligible for a pension and, accordingly, did not make any application. However, in February 1991, she discovered that she might have an entitlement to Contributory Widow's Pension (CWP). She immediately applied for the CWP. One of the questions on the claim form sought an explanation for the late claim. The complainant explained that she had not applied for CWP when she was first widowed because she had been told by an official of the Department of Social Welfare that she was not qualified. A decision to award CWP was taken promptly. However, the only arrears awarded were for a period of three months prior to the date of claim. In other words, arrears of pension for the period July 1985 to November 1990 were not paid. This decision was in line with the standard practice within the Department - and based on the provisions of the Social Welfare (Claims and Payments) Regulations - whereby pensions are paid from the date of claim and, in the case of late claims, arrears of three months are usually payable.

The complainant immediately wrote back to the Department saying that she wished to claim full arrears of pension back to 1985. She referred to the inaccurate advice given by the official in 1985 as the reason why she had not claimed from an earlier date. At about the same time, the official in question wrote to the Widow's Pension Section of his Department in support of the applicant's claim for full arrears. In his report he noted :

"She discussed the matter of Widow's Pension with me after her husband died. I was of the opinion that, as she was superannuated by the ... health board and in receipt of a pension from them, she would not qualify for Non-Contributory Widow's Pension. I can state I did not think at the time she would qualify for Contributory Widow's Pension and told her it was unlikely she would do so".

In June 1991, the Department decided to award an additional three months retrospection on the pension claim. However, in notifying the complainant of this decision, the Department told her that this was now "the maximum amount of arrears payable under current legislation". In its letter, the Department did not refer to the advice given by the official nor did it refer to that official's written acknowledgement that he had given such advice.

The complainant did not raise the question of the arrears again with the Department until June 1994. At that stage, one of her local Dáil deputies wrote to the Department of Social Welfare seeking full arrears to 1985. In early July 1994, the Deciding Officer handling the case sought approval to pay the full arrears on an extra- statutory basis. In the meantime, in August 1994, the widow complained to this Office. The complaint was in relation to the arrears issue and was notified to the Department on 8 August 1994. On 17 August 1994 the Department decided to approve the proposal of the Deciding Officer that full retrospection be paid to July 1984. The complainant was subsequently paid arrears in excess of £12,000.

We then raised the question of whether the complainant should be compensated by the Department for the late payment of her pension. In November 1994 the Department notified this Office that compensation of £2,377 would be paid to the complainant in respect of the delayed payment of pension. The Department accepted that the complainant had not claimed her pension around the date of her husband's death because she had been misinformed as to her probable entitlement by an official of the Department.

The decision to pay full arrears was taken in August 1994. However, the evidence available in August 1994 was identical to that available in April 1991. It was clear in April 1991 that the widow's failure to apply for the pension in time was a direct consequence of the advice given to her by an official of the Department. The official, to his credit, acknowledged this in writing and supported her case to have full arrears paid. It is regrettable that the decision taken in 1991 did not provide for the payment of full arrears.

Department of Education

Delay in payment of school building grant

Many of the complaints received in the Ombudsman's Office are about delay on the part of a public body in replying to correspondence or delivering a service. One such complaint against the Department of Education involved a school which had sought payment of the outstanding balance of a grant due to them for building work. The account had been sent to the Department in 1989.

When my investigator contacted them, the Department arranged for the payment to be made within two months. They explained that one of the reasons for the delay in the case was that a file containing much of the relevant documentation had been lost. In addition, responsibility for clearing final accounts of this kind had been transferred to the Department of Education from the Office of Public Works some years before, without the allocation of any extra staff. This had created many difficulties for them. I advised the Department that it was totally unacceptable that a grant claimed in 1989 had still not been paid in 1994.

School Transport

There are a number of complaints every year about the Department of Education's school transport scheme. Many people complain that their children have to walk too far to meet their school bus. I have great sympathy for the parents and children in these cases. However, I have to take into account that the need to provide a service in as economic a manner as possible means the Department cannot provide a service which brings all the children involved directly from home to school. If the service meets reasonable standards, I cannot suggest that an exception to the general rule be made in a particular case, unless the circumstances are in some way unusual, or my examination brings to light evidence which indicates an error of some kind has been made by the Department.

Transport for a handicapped child

The problems of the school transport scheme for both the Department of Education and the children they serve are most evident in the case of handicapped children, many of whom travel great distances on a daily basis to attend special schools. In one case of complaint to me, the child involved was brought by her mother 15 miles to the nearest pick-up point for the school bus which then travelled a further 25 miles to the school. The child's mother thus had a round trip of over 60 miles a day to bring her daughter to and from the pick-up point. The bus involved also had a journey of over 220 miles a day, which precluded an extension of the route on grounds of cost. In addition, the first child was picked up at the very early time of 7.10am and it would not have been fair to the children to extend their long travelling time even further.

The Department told the family that it would be too costly to organise an extension of the service or a feeder service to bring the child to the bus. Instead, a grant was paid to help the family with the cost of providing their own transport but this was insufficient to meet their particular needs.

Following a complaint on the child's behalf, my investigator asked the Department for a report on the case. The Department reviewed the transport situation in the area in detail and eventually decided that it would be financially feasible to provide a taxi feeder service for the child and four others also attending her school and living near the route to be travelled by the taxi. The situation had changed somewhat since the family had first contacted the Department as there were now more children from the locality seeking service.

I was satisfied that the Department had acted in a reasonable manner in providing a satisfactory solution to the transport problem faced by the families involved.

School transport withdrawn by Department

I found it necessary to question a decision made by the Department of Education in a case where I received a complaint about the withdrawal of a bus service. The Department withdrew the service, which was in a remote rural area, on the grounds that it had been granted in error when it was first established some twenty years ago.

I believe that any official who is making a decision to grant or withdraw a service or benefit of any kind should do so only after a thorough examination of the facts. My enquiries in this case indicated that due consideration had not been given to the possibility that the original decision, made in the 1970s, may in fact have been correct.

When the transport scheme was established for primary schools in the late sixties, the nearest suitable school was the measuring point used for establishing entitlement to the service. Under the rules of the scheme, children under the age of 10 are entitled to transport to their nearest school, if it is more than two miles away. Over the years, many of these original schools have closed and been amalgamated with other schools. However, the Department have never revised the list of schools to take account of such amalgamations. In fact, the measuring point used today can be a school which has been closed for many years.

If the nearest school is a closed school, children living in the area (that is, those for whom the closed school would have been the nearest), are eligible for transport to the school of amalgamation. In this case, the Department maintained that the children were not eligible for transport to the school they attend (and to which they travelled on a school bus until it was withdrawn), but instead were eligible for transport to another school. This other school had amalgamated with a closed school which, the Department maintained, was originally the nearest to the children, when the distance by road from their homes to the school was measured. The families, on the other hand, maintained that it was not the nearest school but that another school, to which the children in the area had walked across fields, was the nearest before it closed and amalgamated with the school their children currently attend. The Department said they had no record of the route through the fields and withdrew the service to the school attended by the children.

When I examined the case, I gathered evidence which indicated that the children in the area had in fact walked to the school which lay nearest their homes via a route through fields. I was concerned that the families' arguments on this point were not given due attention at the time the transport service was being reviewed. I suggested to the Department that transport be provided on the basis that the route through the fields established the school of amalgamation as the nearest appropriate school for the children involved. Following further contact with the Department on the issue, it was eventually agreed that the children were eligible for transport to the school they attend and a new transport service for them was organised.

Department of Agriculture, Food and Forestry

The following two cases illustrate the importance of the need for the provision of timely and accurate information from a Civil Service Department.

Reduced grant paid for farm improvements

A farmer complained that he had not been paid the level of grant he expected to receive for works he carried out under the Farm Improvement Programme. The Programme is operated jointly by Teagasc and the Farm Development Service (FDS) of the Department of Agriculture, Food and Forestry.

The farmer maintained that, before he commenced the works, he was informed verbally by the FDS that, on completion, he would receive a grant of approximately £19,000. He was actually paid £15,302, leaving a shortfall of £3,698. The written approval that issued to the farmer from the Department did not specify the amount of the grant payment. It stated that the farmer would be eligible for grant aid not exceeding 55% of the Department's estimated cost for slurry storage facilities, 45% for animal housing and 25% for a concrete yard (the estimated costs would generally be within 5% of the actual costs). It also stated that payment would be subject to the maximum for grants as prescribed by the Department.

An examination of the Department's file showed that, when the works had been completed, it was initially calculated by the Department that a grant of £19,313 was payable. However, when this amount was checked later, it was discovered that an error had been made in the calculations in that account had not been taken of the limits which applied to the level of investment eligible for grant aid. When these were taken into account, the amount of grant was reduced to £15,302.

There was no evidence that the farmer had been made aware of how these limits would affect his grant payment. He was adamant that he was told in advance by the Department that his grant would amount to approximately £19,000. The Department accepted that he was given this figure but said that this occurred after the works had been completed and could not, therefore, be said to have influenced his decision to proceed with the works. However, the farmer contended that had he known that the grant would be for the lower amount, he would not have gone ahead with the works.

In support of his contention that he was told in advance about the grant of approximately £19,000, the farmer supplied a letter from his bank. This stated that, when he was negotiating loan facilities to finance the works, he told the bank that he would be receiving a grant of approximately £19,000. The bank said that, when he received only £15,302, he was obliged to make up the shortfall by adding to his term loan.

The Department agreed to review the position. It did not accept that it was responsible for the actions taken by the farmer on the basis of an alleged verbal communication, which incidentally was denied by the officials concerned, or on the basis of a written approval which did not specify the actual amount of grant payable. However, the Department said that, having regard to the lack of clarity contained in the approval document, it was prepared to pay half of the difference between the two amounts. The farmer received a cheque for £1,850. I considered this a fair solution.

Export Refunds

Examination of a complaint concerning Export Refunds resulted in payments of over £25,000 to the complainant company.

EU market prices are significantly higher that those on the world market. Export Refunds are subsidies paid to exporters to countries outside the EU with the aim of bridging that gap. In the case of beef, there are a number of criteria which must be met to establish entitlement to Export Refunds. These include the following :

1. The beef must be placed under customs control.
2. The beef must leave the EU within prescribed time limits.
3. The beef must be placed on the market of an eligible country within prescribed time limits.

The Department receives certification as to export from the customs authorities here and the exporter subsequently provides transport documents and proof of import into the final destination. Entitlement to the Export Refund is only established when the exporter has demonstrated that all of the regulatory provisions have been satisfied. However, a provision exists whereby an advance payment of Export Refunds is made if, as soon as the trader has placed the beef under customs control, he provides a security of the amount advanced plus 15%. The exporter must subsequently prove entitlement to the advance by submitting the required proof documents within specific timescales. If entitlement to the advance is not proven, the Department will enforce the forfeit of the security.

The Chief Executive of a meat exporting company complained that the Department had decided to enforce the forfeit of securities in respect of two consignments of beef. The case made by the company in relation to one of the consignments was that it could not obtain what is known as a primary proof document showing that the beef had been imported into the third country . If for reasons beyond the control of the exporter, a primary proof document cannot be submitted, EU Regulations provide that what is known as a secondary proof document may be accepted. In February 1989, the company provided what it regarded as an acceptable secondary proof document. This was within the 18 month period specified in the Regulations and would, if acceptable, have entitled the company to retain 85% of the Export Refund. (The fact that the document had not been submitted within 12 months meant that the full amount could not be retained by the company).

As far as the Department was concerned, the document submitted did not constitute any of the secondary proofs permitted by the Regulations and the Department felt that the company would have been well aware of this. However, the company was not told by the Department that the document was unacceptable until October 1992 which was three years and eight months later. At the same time, the Department informed the company that the security in respect of the consignment was declared to be forfeit and the company was invoiced for the appropriate refund. The company maintained that the Department's decision was unreasonable and that it would have been impossible for the company at that late stage to have obtained what the Department would have regarded as an acceptable proof document.

Following protracted correspondence between this Office, the Department and the company, the Department was asked to review the case. There was a number of grounds for this, including the delay in dealing with the matter, the possibility of a misunderstanding concerning the secondary proof document and the fact that other documentation was received by the Department showing that the beef had been exported. In response the Department said that it remained convinced that the company was absolutely clear as to the requirements of the Regulations but that a possibility existed that a genuine error might have been made in relation to the document submitted. The Department accepted responsibility for the delay which arose in dealing with the matter but differed with the company as to the effect of this delay. It was, however, accepted by the Department that the company could have obtained an acceptable proof document had it been given that opportunity. Accordingly, it was agreed by the Department that 85% of the Export Refund would be paid.

In the case of the second consignment of beef, the company contended that the Department had implicitly allowed an open-ended extension of time for submission of proof documents, in that the Department had continued to correspond with the company after expiry of the time limits set down in the Regulations for submission of documents. The Department reviewed the file and agreed that the impression may have been given to the company that an extension of time had been granted. In the circumstances, the Department agreed to reopen the case and requested that the company submit additional information to assist in a reconsideration of the matter. Following further contact between the Department and the company, it was decided by the Department to allow payment of 85% of the Export Refund.

The Department's revised decisions in this case resulted in a total payment of £25,591.44 being made to the company.

Local Authority

Grave space allocated in error

A complaint against a Local Authority came from a woman who said that a grave space which she had purchased from the Local Authority had been allocated to another person without her knowledge or consent. When the Local Authority eventually allocated an alternative grave space to her, they offered her £100 for the inconvenience caused. She considered this compensation inadequate but the Local Authority had refused to increase the offer.

In their report to me, the Local Authority said that the complainant purchased the grave space in November 1990. On 15 March 1992, this grave space was incorrectly allocated to another person for the burial of his son who had been killed in a car accident. On 24 March 1992, the complainant was informed of the error by the Local Authority and she was asked to accept the adjoining grave space. The complainant declined the offer. However, in November 1992, following a visit to the burial ground with a Local Authority official, the complainant accepted another grave space.

The Local Authority then sent a letter of apology to the complainant and confirmed that she was the owner of the newly allocated grave space. The complainant acknowledged confirmation of the grave space but indicated that she was not happy insofar as compensation had not been paid to her for the stress and inconvenience caused. In February 1993, the Local Authority offered her an ex gratia payment of £100 for the inconvenience and expense incurred by her. She did not accept this offer and referred the matter to her Solicitors. She subsequently referred the matter to me.

When I examined the complaint, I was satisfied that a genuine error had occurred in the allocation of the grave space to another person. The error was discovered by the Local Authority and they acted immediately to correct it in the only way they could, by offering another grave space and apologising for the error.

I was satisfied that their offer of £100 for the inconvenience caused was reasonable in the circumstances.

Higher Education Grant

I received a complaint on behalf of a student who claimed to have been incorrectly refused a Higher Education Grant on the grounds that her parents' income exceeded the limit for entitlement to the grant.

When I received a report on the case from the Local Authority, I noted that they had not allowed a retirement annuity paid by the student's father as an allowable expense in calculating his income for the purposes of the Higher Education Grant scheme. Under the rules of the scheme, this is an allowable expense and should have been taken into account in calculating the income. The Local Authority readily agreed with this point when I put it to them. When the income was recalculated on this basis, the student was entitled to a half-fees grant which she was subsequently paid.

Coastal Erosion

The following case is an example of the gaps in information which can exist between Government Departments and which can have adverse effects on members of the public.

A farmer complained that his Local Authority had failed to take any remedial action to prevent his land being flooded by sea water following damage to an embankment caused by stormy weather and general coastal erosion. About 15 acres of his land were regularly under water and therefore useless. The Local Authority had taken the view that they had no responsibility in the matter.

When my investigator raised the matter with the Local Authority, they maintained that, as no public property was endangered by the fact that the embankment was in a state of disrepair, they had no direct function in the matter. Accordingly, we wrote to the Department of the Marine to find out if they had any responsibility. They informed me that coastal protection is primarily the responsibility of the property owner, whether that be a private individual or a local authority. They said that they were provided with limited public funds to assist local authorities in addressing coastal erosion problems in their areas. However, the Department provided grant aid to local authorities for work on local authority owned property. No financial assistance was given to private individuals.

When my investigator examined the legal position relating to this matter, there was nothing in the relevant acts, i.e. the Foreshore Act, 1933 or the Coast Protection Act, 1963, to suggest that any public body had a duty to repair or pay the cost of repair for storm damage caused to embankments. Accordingly, I could not request either the Department of the Marine or the Local Authority to repair or pay the cost of repairing the embankment in the complainant's case.

Following discussions on the case with the Land Policy Section of the Department of Agriculture, Food and Forestry, they said that, where they bought land in the past and found an embankment in bad condition, they repaired it before selling the land to the farmer. When they sold the land they passed on responsibility for maintaining the embankment to the new owner.

In some cases when they sold land, they set aside a certain amount of money, in the care of the Public Trustee, for future maintenance of, for example, embankments. This would be used as required until the particular fund was exhausted. Having checked the situation in respect of this case, they found that about £600 was held in trust to be used to repair the embankment in question. This money had been set aside by the Land Commission on the disposal of the land to the complainant or his predecessors. This money could only be claimed on completion of the relevant works on the embankment, to the satisfaction of the Department. Accordingly I advised the complainant that he should contact the Trustee with a view to claiming the money that was there to assist in the repair of the embankment.

Revenue Commissioners

Application of Withholding Tax legislation

A firm of accountants complained, on behalf of a client company, that it was unreasonable of the Revenue Commissioners to charge interest on late payments of VAT, PAYE and PRSI when at the same time substantial amounts of Withholding Tax had not been refunded to the company.

An examination of the relevant legislation, the Finance Act, 1987, showed that, in the case of applications for interim refunds of Withholding Tax under Section 19, the Commissioners, before making an interim refund, are obliged to deduct from the amount otherwise refundable any VAT, PAYE or PRSI which is due but unpaid. The company's tax records showed that, on a number of occasions, when refunds of Withholding Tax were made by the Commissioners to the company, there were amounts of VAT, PAYE and PRSI due but unpaid on which interest was subsequently charged. Had the amounts owed been deducted from the Withholding Tax refunds before they were made, it would have resulted in no interest or a lower amount of interest being charged on the late payments arising under the other tax headings.

Initially, the Commissioners would not accept this interpretation of the legislation. They continued to maintain that the interest charges were properly raised and would have to be paid if Sheriff's action was to be avoided. After discussions and correspondence over a lengthy period, the Commissioners accepted the legal position as outlined above. They said that, where a refund of Withholding Tax is being processed and a liability arises under another tax heading, it had not been the practice to hold up the refund to seek details of other liabilities. This practice had been designed to benefit the taxpayer by ensuring that refunds were not held up unduly. However, the Commissioners accepted that the practice should not disadvantage the taxpayer in any way by, for example, leaving him or her liable to additional interest charges.

In this case, the Commissioners agreed to recalculate the interest charges resulting in a saving of £1,115 to the company.

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