Some 140,000 over-70s must assess their own income to see if they are still entitled to a card, but the new rules are causing confusion, writes CAROLINE MADDEN
LIKE SO many elements in last October’s rushed budget, the new medical card scheme for over-70s sparked public outrage, fear, misinformation and confusion.
Initially it was announced that the automatic entitlement to a medical card for people aged 70 or over was to be completely abolished. Following protests, the Government rowed back to a certain extent and the income limits were revised to allow more elderly people to keep their cards.
In January, the Health Service Executive (HSE) wrote to the 350,000 people over 70 who had medical cards to inform them of the action they needed to take as a result of the new rules.
About 210,000 of these had been granted a medical card before the automatic entitlement scheme was introduced in 2001 and, therefore, would have been means tested at some point in the past. This group were informed that, unless there had been a material change in their means, they could keep their card and did not need to take any action.
The remaining 140,000 had received their medical cards after 2001 on the basis of age only and so had not been means tested. They were informed of the new income limits and asked to send a declaration to the HSE by March 1st if their income exceeded these limits. If they made this declaration, their card would have become ineffective as of March 2nd. Otherwise it would be assumed that they were still entitled to a card.
Although this self-assessment system may seem relatively straightforward at first glance, problems have arisen.
Firstly, a number of people over 70 said they never received any communication from the HSE.
According to HSE spokesman Paddy Burke, the HSE sent letters to each person’s last known address, so they may not have received a letter if they had moved residence and failed to inform the HSE.
Age Action spokesman Eamon Timmins says he knows of several people who did not get a letter and are very worried as a result, but he also notes that “a lot of people threw those letters in the corner and ignored them”.
The new rules specify that, if an individual’s gross income exceeds €700 a week, or €1,400 for a couple, they will no longer be entitled to an over-70s medical card. These figures all relate to gross income – ie before deductions for income tax and PRSI – from all sources, such as pensions, dividends, rental income and so on.
However, figuring out how exactly to assess their income has been a headache for elderly people. One of the most frustrating and confusing aspects of the new scheme is the lack of clarity as to which year the person should base their assessment on. Should it be based on income in the current year or the previous year?
According to Gerard Scully of Age Action, it was initially informed by the HSE that over-70s should base their assessment on the current year.
However, when Age Action rang the HSE to confirm this, they were told no, that it should be based on last year’s income.
Age Action has been contacted by a number of people who have calculated that they would be over the income threshold in 2008 but under it in 2009, so this issue is crucial from their perspective.
In fact, the income of many older people who own shares will drop this year because many companies that paid out dividends last year have announced they will be scrapping them in 2009.
In these circumstances, basing the assessment on last year’s income would be “very unfair”, Scully says, adding that it should be based on this year.
Speaking to The Irish Times this week, the HSE’s Paddy Burke confirmed that the assessment can be based on an individual’s current level of income. He also confirmed that, if an individual believes they will not receive dividends this year, they can calculate their income on that basis for the purpose of the means test. If an individual is in doubt about whether their income is over the limit, they should contact their local health office for advice, he says.
The fact that confusion still reigns is indicative of how badly managed this process has been, says Age Action’s Scully. “It’s a nightmare for older people.”
Given that the date for making an income declaration has passed, Scully says the HSE needs to make a definitive decision on this issue as it is “fundamental to the whole process”. He says it should make a public statement on it and send out literature to elderly people to clarify the situation.
“People have been very confused about the whole issue of savings and savings disregard,” Timmins adds. “You’re not actually being assessed on your savings. It’s the income generated by the savings over the disregard [amount].”
According to the HSE website, savings or similar investments of €36,000 for a single person and €72,000 for a couple are disregarded for the purpose of assessing their income. “The remainder of savings and similar investments will be assessed on the income calculated at a notional interest rate based on the prevailing interest rates at the time of application,” it says.
The notional rate applied is currently 5 per cent, and this will be reviewed on a quarterly basis.
Individuals also have the choice of using the actual interest earned from their savings or investments, but they must supply a certificate of interest paid on these savings. According to Scully, this is probably the more beneficial approach given current market rates.
The following example provided on the HSE website shows how the savings disregard works:
If an individual is single and has savings of €50,000 earning 3 per cent interest, the income is counted as 3 per cent of €14,000 (€50,000 less €36,000), which works out at €420 a year.
In the case of longer-term investments, where the interest is only applied at the end of a fixed period, the individual can choose to have the interest taken into account on the date it is earned, or they can opt to have the notional rate applied each year.
One issue on which elderly people can rest assured is that, regardless of whether they are entitled to a medical card, if they are aged 70 or over they will be exempt from the Health Contribution, more commonly known as the health levy.
It is unclear how many people will lose their cards as a result of the new means test. The HSE is still processing the responses and will not have final figures until the end of the month. The Government has predicted that the figure will be 20,000 but Timmins feels this estimate is low.
Another issue that remains unclear is exactly how tough the HSE will be on elderly people who keep their medical card even though they are no longer entitled to it.
Age Action has been contacted by a significant number of people who intend to do just that.
“Our policy is to advise them if they do that, they are breaking the law and they could face sanction,” says Timmins.
Some people are not handing back their medical card on a matter of principle, he says, as they feel it is their entitlement. Others feel that they cannot afford to give it back.
“I was talking to a lady the other day . . . in her mid-70s, and she said she’s never broken the law in her life but she’s still afraid to give back her card because she fears she can’t afford her medication,” he says.
Anyone over 70 who loses their medical card on income grounds can apply again in future years if their income falls below the threshold. However, Age Action is urging people to apply straight away for a medical card under the general scheme (as opposed to the over-70s scheme) on the grounds that their medical needs are causing them undue financial hardship.
“They may get a medical card, they may get a GP-only card, but we’re urging that, if they are handing [their card] back, they get everything they are entitled to,” he advises. Rising unemployment means more people are becoming entitled to general medical cards so elderly people are afraid that they won’t get a card under this scheme, and so some are deciding to hold on to their card and are “hoping to lie low”, he says.
The Department of Health reportedly said last week that it would not prosecute elderly people who continued to use a medical card to which they are no longer entitled, but that they could be sued for the recovery of the cost of availing of services.
Burke says the HSE will begin carrying out spot checks and audits once it has worked through the feedback to the 350,000 letters.
According to Burke, if abuse of the scheme occurs, it will have to be pursued and dealt with, and the HSE will seek to recoup any losses suffered as a result.
But he says he does not wish to comment as to whether sanctions such as penalties or imprisonment will be applied.
The HSE infoline is available from 8am to 8pm, Monday to Saturday, on CallSave 1850-241850. Age Action’s information service is available from 9.30am to 1.30pm and 2pm to 5.30pm, Monday to Friday, on 01-4984746 or Lo-Call 1890-369369
