• Tá Tú Anseo:
• Baile /
• Foilseacháin /
• Tuarascáil Imscrúdaithe /
• Report on Lost Pension Arrears

Report on Lost Pension Arrears

Lost Pension Arrears

A Review of Complaints to the Ombudsman Regarding Unpaid Arrears of Contributory Pension where the Claim is made Late

A Report to the Dáil and Seanad in accordance with Section 6(7) of the Ombudsman Act, 1980

Summary

This report is based on approximately 200 complaints, with a common theme, received since 1985. All of the complainants are pensioners who discovered that, because they were late in claiming a contributory pension, they were penalised with the loss of substantial pension arrears. The report sets out the Ombudsman's dealings with the Department of Social, Community and Family Affairs in relation to these complaints; it charts the slow progress made on the underlying problem which the complaints have identified; and it attempts to draw out the lessons to be learned from the overall experience. The report is a case study in administrative practice in a specific area but it has relevance for the practice and regulation of public administration generally.

Chapter Oneoutlines the specific issue underlying these complaints i.e. the practice whereby a person who is late in claiming a contributory social welfare pension (whether for widowhood or old age) can stand to lose substantial arrears of that pension. In one of the cases detailed, the pensioner had lost �36,000. This penalty applied even though the pension is a contributory pension; despite the fact that, historically, there has been significant confusion about pension entitlements and regardless of the reasons why the claim was late in being made. Chapter Two describes the operation of the penalty rules which applied to late pension claimants. It includes an account of discretionary powers available to the Department under which arrears could have been paid to the Ombudsman's complainants over the years, if only they (or the Ombudsman) had known there was such discretion.

Chapter Three outlines the deep-seated and persisting sense of grievance expressed over the years by the pensioners concerned. Unjust, unfair, immoral, mean-minded, fraudulent and duplicitous are just some of the epithets used by the affected pensioners. In order to convey the strength of feeling expressed, and to show the magnitude of the losses suffered, the report incorporates a series of verbatim extracts from letters written by these pensioners. These extracts are presented throughout the report as marginal inserts.

Chapter Four describes the Ombudsman's involvement with these complaints since 1985; it shows that the Ombudsman first flagged the issue as one requiring remedial action as far back as 1985 and that between 1985 and 1996 the Ombudsman continued to draw attention to the matter. In 1997 the Ombudsman published an investigation report on three test cases and this did lead to a considerable easing of the penalties for late claimants. However, this relaxation benefited only "new" cases and many of the pensioners who had complained to the Ombudsman - and whose cases caused the improvements to be made - were no better off. Eventually, in December 1998, the Department decided on a package under which these "old" cases got some limited compensation for the unpaid arrears.

Chapter Five summarises the outcome on some recent cases which benefited from a welcome flexibility in the interpretation of the penalty rules. This flexibility was uggested by the Ombudsman in his 1997 investigation report.

Chapter Six discusses a series of issues raised in the course of the Ombudsman's involvement since 1985. These have relevance for the Department, for public administration generally, for the Oireachtas and indeed for the Ombudsman's Office itself. The first of these issues is the fact that the severe penalties imposed on late claimants derived, not from the primary law as made by the Oireachtas, but from secondary law i.e. statutory instruments made by the Minister and passively acquiesced in by the two Houses of the Oireachtas. The Ombudsman suggests that these rules, had they been challenged in court, might well have been found to be invalid. A related point is that those affected, widowed and elderly people, are amongst those least likely to have been able to mount a legal challenge or to organise as a pressure group. The second, and related, issue is that there is no effective monitoring and supervision of secondary legislation by the Dáil and Seanad. Here the Ombudsman restates a view expressed before on a number of occasions. In particular, he cautions against the use of secondary legislation to regulate areas in ways which might prove controversial if dealt with through primary legislation. He suggests that a mechanism is urgently needed whereby the Dáil and/or Seanad can supervise the making of secondary legislation. A third issue raised in Chapter Six has to do with the use of discretionary powers. The Ombudsman says that, if discretionary powers are available, their existence should be publicised; they should be used in an open manner and within clear parameters in order to ensure conformity with Constitutional standards of reasonableness and fairness; and no discretionary option should be arbitrarily excluded. A fourth issue considered is whether the penalties described are incompatible with the nature of social insurance. The Ombudsman suggests that the penalties involved were not compatible with the concept of social insurance based, as it is, on the creation of entitlement by contributions paid and with its quasi-contractual nature. The fifth and final issue raised is in the form of a question: why was action not taken on this issue much earlier than 1997, given that it had been identified as a problem from 1985 onwards? The Ombudsman suggests that the Department's explanation, while understandable, was hardly acceptable in terms of basic fairness and of good practice. The lesson in all of this for the Ombudsman's Office is that, within its jurisdictional framework, it should seek to address systemic administrative problems more robustly and, if at all possible, more speedily.

Chapter 1 Introduction - The Issue

Chapter 2 - The Practice Described

Chapter 3 - Sense of Grievance

Chapter 4 - Ombudsman Involvement with Late Pension Claim Complainants

Chapter 5 Some Recent Cases

Chapter 6 - Issues & Conclusions

  Report on Lost Pension Arrears - downloadable pdf file (pdf, 274 kb)