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Chapter 2 - Simple Complaints with Significant Outcomes

Chapter Two

Simple Complaints with significant Outcomes

While some cases handled by the Office of the Ombudsman may be fairly routine in nature and can be quickly resolved they may lead to considerable benefits for complainants. The following three cases illustrate this point.

The Department of Social and Family Affairs - Arrears of Pension

In 1997 and in 1999 the Ombudsman produced special reports arising from complaints on the question of the loss of arrears of pension for claimants. Those complaints arose from the refusal by the Department to pay full arrears of pension to persons who, for varying reasons, were late in making their claims. Entitlement to these pensions, which are not means tested, arose from having paid social insurance contributions. The Department had operated a system under which a claim was deemed to be made late if it was not made within "the prescribed time", which, in the case of Contributory Old Age Pension, was the period from three months prior to reaching pension age at 66 years to three months after reaching 66 years. A person who made a claim outside this period would receive no more than three months arrears of pension. Following the Ombudsman's 1997 special report new arrangements were put in place to modify the loss of pension arrears and up to twelve months of the delay period are now paid in full. Where the delay period exceeds twelve months arrears for the period beyond the first twelve months are paid on a proportionate basis. In addition, there is also the possibility of payment of full arrears, on a discretionary basis, provided certain circumstances arose in the case, for example, if the person was incapable of managing their affairs at the relevant time due to medical incapacity. In a further initiative the Department paid approximately 50% of arrears in those old cases which did not benefit from the new arrangements.


In one case a man had submitted an application for Old Age (Contributory) Pension in July 1991 when he was over 73 years of age. The Department awarded the pension at that time but, in January 1999 after he had died, backdated payment of the pension to 16 March 1990 to take account of the revised arrangements which had been introduced as consequence of the special investigations which the Ombudsman had undertaken into the payment of arrears of pensions.


His widow claimed that the Department should have known in 1988 that he was eligible for the pension. Her late husband had submitted a form to the Department in November 1988, indicating that he was self-employed but there was a section in the form quoting his RSI Number and old Insurance Number. If the Department had checked his insurance record it would have found that he had been insurably employed for a number of years before becoming self-employed.


Following contact with the Department it agreed to backdate the claim to 1988. Furthermore, the Department agreed to pay compensation for the loss of purchasing power of the arrears of payment in this instance. In all, the complainant received an arrears payment of �23,044. The Office did not pursue payment of further retrospection to the date the claimant reached 66 years in 1984 on the basis that there was no evidence that he had made any other claim to the Department which could have been treated as an Old Age (Contributory) Pension claim. In addition, there was no substantive evidence to show that he was incapable of making a claim at the appropriate time when he became eligible at 66 years of age.


The Revenue Commissioners - Tax Liabilities

The Revenue referred outstanding tax liabilities of a taxpayer for enforcement and collection to a firm of solicitors. The outstanding tax was paid and the taxpayer was advised that the file had been closed.


The taxpayer subsequently received a further demand incorporating a Court Order for outstanding tax arrears plus interest. On enquiry, it transpired that the tax settlement which originally had been arrived at was in respect of his partner and not himself. He agreed to pay the outstanding tax listed in the second demand but did not feel that he should be liable for the interest payment as he had been informed that all outstanding tax had been paid. He had intended to contest the initial court hearing but his solicitor had missed the deadline. His solicitor advised him to pursue his case through the Office of the Ombudsman.


On receipt of his complaint the Office brought the full facts to the attention of the Revenue. In the light of the full information on the case it agreed not to pursue a demand for interest against the complainant amounting to �3,775. The complainant was thus able to obtain satisfaction by using the Office as an alternative to the courts.


Office of the Revenue Commissioners - Pension Entitlement

The complainant and her former husband jointly ran a shop and filling station business until it was sold off in 1999. Although the business was operated jointly, tax returns were submitted in the sole name of her husband and, as a consequence, no PRSI contributions were made in her name.


She wished to have her role in the running of the business acknowledged as this would help to establish an entitlement to a Contributory Old Age Pension (COAP) when she reached retirement age and, on her behalf, her accountant submitted revised returns of income for some of the years in question. However, the Revenue did not agree that there was sufficient reason to amend the assessments already made. The decision would have an adverse affect on the complainant when she reached retirement age as there are a number of provisions in Social Welfare legislation which specifically exclude certain types of employment from PRSI cover. These exclusions apply, inter alia, to the spouse of a self-employed contributor who participates in a business. The only exemption which would apply is where the spouse is a business partner. The complainant therefore needed to establish that this exemption applied in her case.


Her accountant contacted the Office of the Ombudsman on her behalf. The Office pursued the matter with Revenue and it agreed to review the case and revise the assessments on the basis that a partnership existed at the time. This gave rise to a refund in PRSI which had been overpaid and would enable the Department of Social and Family Affairs to determine her eligibility for old age pension when she reached the age of retirement.

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