Millions of euro in compensation payout investments lost by State

A Dáil report has called for an independent review of how compensation payouts to vulnerable people are invested by the State, after millions of euro were wiped out during the recession.

The Public Accounts Committee will make the call today, alongside claims some recipients are in danger of dying in poverty because their funds are running out, following a three-month examination of the wards of court system.

Under the current system, the State is responsible for overseeing the investment of €1.47bn in court-ordered payouts to 14,000 children until they turn 18, and 4,500 adults who due to “catastrophic” brain injuries and other issues cannot represent themselves.

The Courts Service has insisted it is looking after the funds appropriately and that there is no question over how the money is invested as this is done in a “conservative” way to protect the initial payment level.

However, the committee has raised serious concerns over how millions of euro in compensation funds have been wiped out due to bad deals and the economic crash — including 17% of the total sum during 2008 alone — insisting it must be independently examined.

According to the report, seen by the Irish Examiner, the cross-party committee wants the investments to now be the subject of a “periodic review” by the Comptroller and Auditor General and the NTMA to ensure compensation for “highly vulnerable” people is protected.

It has further called for lump sum payouts to be replaced by periodic support funds, after being informed a number of people who received compensation in the 1970s and 1980s for lifelong conditions have seen the State support run out.

They include one case of a person whose substantial fund 30 years ago will expire in 2017, six whose fund has fallen below €10,000, and 15 who do not have “sufficient” money to help them with their specific needs.

Writing in the report, PAC chair and Fianna Fáil TD John McGuinness said these recipients are “of particular concern” to the committee as the money is certain to dry up long before they die.

He said the situation must be urgently addressed by ensuring public bodies such as the HSE come together to provide them with the necessary aid, but noted at present the State cannot legally intervene because of the once-off lump sum payment agreement.

The wards of court report was drawn up following a previous three-hour discussion on the issue.

During the November 20 meeting, Court Service director of resource management, Sean Quigley, rejected claims families are being “locked out” of any role in how the State invests the funds.

However, Sinn Féin TD Mary Lou McDonald responded that is “not what people are reporting” to her.

Pointing to a case where an award was almost halved, from €510,000 to €280,145, in just five years, Ms McDonald said the system must be reviewed as “there aren’t sufficient defences, checks or balances”.

Responding to the claim, Mr Quigley said the referenced case occurred during a “fluctuating” financial period.