Pension claw-backs - No excuse for double means tests

AS the Government prepares to refund €1 billion illegally deducted from pensioners in State nursing homes, the coalition is embroiled in a fresh controversy over wrongly clawing back money which elderly people had squirrelled away for a rainy day and left to their families.

At the eye of the new storm is a blatant form of double means-testing by the Department of Social and Family Affairs, exposed in a test case involving €34,000 allegedly owed to the State by a deceased elderly farmer.

Hundreds of similar claims could be made against the Government following a ruling by the department’s own Central Appeals Office which found it had no right to claw back money saved by the 93-year-old man while drawing the full State pension for more than 26 years.

Apparently, between the years 2000 and 2005, officials lodged similar claims against the relatives of a high proportion of 2,326 other deceased pensioners. While around half of €31 million raked back during that time may have been unjustified, according to an internal memo, most next-of-kin believed the savings were assessable as means.

The landmark test case was heard after the assets of the retired farmer, who died in 2003, were frozen as the department sought to reclaim money which, it said, should have been brought to its attention.

Normally, when it scrutinises the estates of welfare recipients, the department regards all monies saved by pensioners as part of that lump sum — even when derived from the pension itself. However, the appeal process found that because the pension is means tested to begin with, the department could have no subsequent claim if pensioners opted to save part of their entitlements.

The far-reaching decision represents a comprehensive ruling that such savings from pensions are not a legitimate target for claw-backs. The anomaly first came to light last October when the executor of the elderly farmer’s will had successfully challenged the claim at an oral hearing on grounds that raking back money saved from his pension amounted to a form of double means-testing.

The fact that the public was not apprised of this significant development lends credence to suspicions the case was kept under wraps. According to Fine Gael, Social Affairs Minister Seamus Brennan should investigate the issue and, if necessary, change the law.

While there is statutory onus on him to ensure that pensions funded by the taxpayer are only paid under strict compliance with the rules, double means-testing of savings is obviously not on.

Given the public outrage over the illegal deductions from elderly people in State nursing homes, people can be forgiven for seeing this as a further illustration of the State’s cynical attitude towards some of the most vulnerable people in society.

In stark contrast to the Government’s cosy approach to a golden circle of tax-free multi-millionaires, the nursing home scandal has rightly forced the coalition to refund 20,000 living pensioners as well as the estates of around 50,000 deceased.

Arguably, in the latest controversy, Mr Brennan is defending the indefensible by giving his blanket support to procedures and policies aimed at recovering welfare overpayments. On the face of it, there can be no justification for clawing back money already means tested.

When will the ministers of this Government realise they should stop digging a hole when official policy is not only wrong but seen to be wrong?