The Government is likely to be forced to introduce a supplementary spending estimate later this year to authorise the repayment of at least €500 million to elderly residents of State-run institutions and their families, write Mark Brennock & Carol Coulter.
The compensation arises from yesterday's unanimous Supreme Court decision that struck down the Government's attempt to retrospectively legalise illegal nursing home charges to medical card holders.
Facing severe criticism from the Opposition for attempting to hold on to illegally obtained money, the Minister for Health, Ms Harney, went on the offensive last night.
She said she no longer stood over her statement last December that the illegal charges had been levied by health boards "in good faith".
She had changed her mind, she told the Dáil, because of new information that had come to light during the preparation for the Supreme Court case.
This had shown that not only had the practice of charging medical card holders for such care been questioned in a 1976 Supreme Court judgment, but also in legal advice given to a health board in 1978.
She accused her own Department and health boards of "systemic maladministration".
She looked forward to the outcome of an inquiry commissioned by her, which is being conducted by Mr John Travers. It will examine how the charges continued through "11 governments, 12 or 13 ministers for health and 40 health boards".
Ms Harney said yesterday the Government would repay the money "as fairly and as quickly as we can". She said the Government still had to decide what mechanism to use to compensate people.
If the Statute of Limitations was applied, only charges imposed for the past six years would have to be paid back, and this could cost some €550 million, she said. The Supreme Court said yesterday that the State could invoke the Statute of Limitations. If it is not used, the bill could be between €1.5 billion and €2 billion, Ms Harney said.
However, she said the court held that it could be constitutional not to repay the charges illegally made in the past if it would have a severe effect on the public finances. Going back to 1976 could have such an effect.
Yesterday's Supreme Court ruling followed the referral of the Health (Amendment) (No 2) Bill to the Supreme Court by the President for a test of its constitutionality.
The Bill had been rushed through the Oireachtas in December after Ms Harney sought and received legal advice from the Attorney General, which said the practice of charging elderly medical card holders for long-term care in State- run institutions had no basis in law.
The seven-judge Supreme Court found yesterday that the charges were illegal under the 1970 Health Act, as interpreted by the courts in 1976.
It found that the attempt to retrospectively legalise the charges involved the extinguishing of a property right protected by the Constitution. The imposition of such charges in the future was acceptable, the court found.
Therefore, 28 years of illegal charges are involved.
Ms Harney ruled out a suggestion that there could be tax increases to pay the bill, saying funding for services would be cut instead. "It clearly will be at the expense of other things, naturally," she said.
Asked would the money come from the health budget, she said this was something the Government had to discuss.
"But it will certainly come at the expense of future services in some area."
A supplementary estimate will have to be voted through the Dáil to approve such a significant extra allocation of resources. The Government said a decision had not been made over the timing of such an estimate.
Ms Harney said the charges raised about €120 million a year which was an important contribution to health services. She had to reflect on how and when to bring forward legislation to allow for the imposition of these charges.