Health (Amendment) (No. 2) Bill 2004 Second Stage Speech by An Tánaiste and Minister for Health and Children, Mary Harney, T.D. Dáil Éireann, 16th December, 2004

I move that the Bill be now read a second time.


In the debate on this Bill in the House today, I believe it is important that we address important issues with clarity, purpose and fairness.

It is important that people in long term care and their families should have clarity about how care will be provided and paid for.

It is important that any charges made by the State are on a fully legal basis.

It is important that we should have confidence in our public administration operating effectively in the public interest at all times.

And it is important, too, that where mistakes are made, they are recognised, responsibility is taken, the lessons are learned and applied.

I wish to deal with three areas today:  first, the provisions of the Bill;  second, the scheme of repayments the government will put in place;  and third, the issues arising from the handling of this question within the Department of Health and Children.

I am placing on the record of the House a number of documents as an annex to my prepared remarks.   I am putting all the facts I know before the House.  This is the only way each of us can form clear and fair assessments.

Health (Amendment) (No. 2) Bill 2004

I wish to introduce formally the Second Stage of the Health (Amendment) (No. 2) Bill 2004 to the House.

The purpose this Bill is to provide a legal framework for the charging of patients in long term care in health board run institutions and publicly contracted beds in private nursing homes.

The Bill will establish a sound legal basis for the long established practice of health boards in charging for the costs of maintenance in institutions providing long term care.

Most people accept that it is fair and reasonable that those who can afford to contribute to the cost of their long stay care should do so. This has been implemented by successive governments, and by Ministers for Health from all parties in government, since 1954.

The charges raised are used to support the provision of care for those in long term residential care. These charges currently generate approximately €100 million in revenue for health boards each year. The cost of long term care, even of the shelter and maintenance part, is clearly more than this amount.  There is no doubt that the loss of this income would have an adverse effect on our ability to provide the health and caring services people need.


I am attaching as one of the annexed document a brief background note on the history of the legislative basis on which charges have been raised up to now.

Similar information is found in the report I also include of the Secretary General of my Department, prepared at my request for the government meeting on Tuesday.

The essential point is that the basis for charges made since the McInerney Supreme Court judgement of 1976 arose from a circular issued by the Department of Health to Health Boards.  This circular – included in the annexed documentation – authorised a practice by which the CEO of a health board could regard patients as not meeting the criteria for full eligibility while being maintained in long term care, on the basis that necessary general practitioner and surgical services were being provided for them.

The withdrawal of people’s medical cards and full eligibility in this way was taken to enable a charge for in-patient services to be raised under the 1976 Regulations, which provided for charging for people other than those with full eligibility.

I would emphasise for the House that the extension of full eligibility to all persons over 70 years of age, irrespective of means, in 2001 was not the reason why the practice of charging in this way was found to be without a sound legal basis.

The flawed basis for charges for anyone with full eligibility goes back to the 1976 circular which continued to be implemented after the 2001 decision.

I will return later to developments since 2002 in how the legal issues around this were handled when I address management issues.

Provisions of the Health (Amendment) (No. 2) Bill  2004.

At this point, I propose to outline the scope and principal provisions of the Bill.

The Bill provides for an amendment to  section 53 of the Health Act, 1970 as follows:

  • To replace the existing enabling provision in sub-section (2), which provides  the Minister with discretionary power to make regulations, by a provision which  requires the Minister to make regulations in order to impose charges in relation to all persons, i.e. those with full and limited eligiblity.
  • To insert a new sub-section (3) which specifies categories of person exempted from charges imposed under sub-section (2).
  • To insert a new sub-section (4) which  empowers the Chief Executive Officer of a health board to reduce or waive a charge having regard to the financial circumstances of the person and with a view to avoiding undue financial hardship in relation to that person. It is intended that the Regulations will impose a maximum weekly charge of €120, which approximates to 80% of the weekly rate of the maximum level of non-contributory old age pension. The Regulations will also make clear that individuals are to retain a minimum amount of pocket money of €35 per week.
  • To insert a new sub-section (5) to provide, among other things, that charges levied under section 53 of the 1970 Health Act prior to the 14th December, 2004 are and always have been lawful. My Department is satisfied, in the light of legal advices available to it, that it is constitutional and in accordance with the European Convention on Human Rights.  The Department has received advice from the Office of the Attorney General which includes advice from outside counsel including Dr. Gerard Hogan S.C., a leading expert in Irish constitutional law and a co-author of Kelly on the Constitution.
  • To insert a new sub-section (6)  that the retrospective regularisation provision of the new sub-section (5) does not apply in the case of a charge which is the subject of civil proceedings instituted on or before 14 December, 2004 for the recovery of the relevant charge..
  • To insert a new sub-section (7)  to provide that the provisions of the new sub-section (5) do not affect any other ground which may be raised in civil proceedings to debar the recovery of the relevant charge.
  • To insert a new sub-section (8) to make it clear that any current regulations in force remain in force. This is to make it clear that the Bill does not interfere with other existing regulations.
  • To insert a new sub-section (9) to provide that the charges shall only apply for in-patient services after a period of 30 days or periods aggregating 30 days within the previous 12 months. The new sub-section (9) also limits the weekly charge to an amount that does not exceed 80% of the maximum of the weekly rate of old age (non-contributory) pension.
  • To insert a new sub-section (10) to clarify that the period of 30 days referred to in subsetion (9) begins to run immediately the person concerned is provided with in-patient services.
  • To insert a new sub-section (11) to define “in-patient services” for the purpose of charges made.

These are the provisions of the Bill to implement the government’s policy, in summary,

  • that it is reasonable that charges should be made;
  • that charges must be on a sound legal basis;
  • and that clarity is brought to charges made in the past so as to avoid needless litigation and potentially large instability in health care funding.

Policy on repayments

As I said at the outset, where mistakes are made, they should be recognised and there should be redress, if at all possible.

The Government recognises that a mistake has been made for 28 years on the legal basis for charges.  Notwithstanding the fact that the policy had consistent support, and that people did actually receive a benefit for their payment, the government believe that some repayment should be made because a mistake was made.

It is clearly beyond our financial and administrative ability to repay all charges since 1976.  We have decided therefore by way of a goodwill gesture to make repayments to people with full eligibility who have paid charges to date.

I expect that approximately 20,000 people will benefit from this repayment.  Each person will receive a repayment of up to €2,000.   These payments will be made automatically, where possible, and as soon as possible in the New Year. We will also advertise to allow people to apply for a payment.  This is so as to ensure that no-one who has made payments is left out, or is unduly delayed in receiving payment.  For example, there may be people who may previously have been in long term care but have since left or moved to another setting and records may, in some case, not be as readily available as normal.

The government believe this is a reasonable and fair way to recognise that a mistake was made.  People who are now actually in long term care will benefit directly and exclusively.  Administrative and legal costs will not absorb any part of the repayment.  And it will be done speedily and fairly.

Developments since 2002

I wish now to address how this issue was handled at various times since 2002 by my Department and in its work with health boards.

At the end of 2002, the South Eastern Health Board, in the context of a number of claims about charges by and against the board, obtained legal advice on a range of issues related to long stay care in both public institutions and private nursing homes.

An extract from the legal advice was handed to the Department at a meeting with the South Eastern Health Board on 11 March 2003.   I am informed that the broad content of the advice was also made known by the South Eastern Health Board to the CEOs of the other health boards.

The relevant aspects of this advice were considered within the Department over the following months.  It was not, however, brought to a particular decision point during this period.

The charges for long term stays in public institutions were discussed in some detail at the end-year review meeting between the Department’s senior management the CEOs of the health boards on 16th December 2003.

I am attaching the minutes of that meeting for the House.

The meeting concluded that it would be necessary for the Department to get a definitive legal assessment as the first step in drawing up legislation on eligibility and charges.

Arising from that meeting, a small group was convened within the Department to prepare a position paper on the legal issues surrounding charges for long stay in public institutions.

This position paper was drawn up at the end of January of this year, as was a letter to the Office of the Attorney General requesting legal advice that would have been signed by the Secretary General.  Unfortunately, this letter was not sent at that time.

Following questions on the issue from Deputies Kenny and Perry in the House and elsewhere last October, I immediately sought legal advice from the Office of the Attorney General.

The legal advice provided by the Attorney General on 5th November made it clear to me that new primary legislation would be required urgently to underpin a policy that persons can be required to contribute to their costs of maintenance (e.g. shelter, food, bed, clothing) in a public institution (or a contract bed in private setting).

In the light of that advice, work began immediately in the Department on the preparation of the necessary legislation.

I received further advice of 8th December from the Attorney General on legal problems arising out of continuing to make such charges.

On foot of that advice, a letter was issued on my instructions to the Chief Executive Officers of the health boards and the Eastern Regional Health Authority asking them to stop making such charges immediately, pending the introduction of amending legislation.

The health boards confirmed last Friday, 10th December, that they had taken the necessary steps to do so.

Drafting of the legislation continued between the Department and the Attorney General’s office, and was completed so that I was in a position to bring a memorandum to Government this Tuesday, 14th December.

Those are all the facts I know of how we have come to today’s debate on this Bill.

Management report

Clearly, serious issues arise from how this important legal issue was handled in the Department of Health and Children.

The government propose to deal with the charges by new law and by making ex-gratia repayments.   There is also a responsibility on us to deal with public management and administration issues.

I have asked Mr John Travers, a retired head of Forfás with a distinguished career in the public service, to examine the management of this issue in the Department and the reasons why the Attorney General’s advice was not sought at the earliest possible time.

I will ask him to identify lessons that can be learnt and applied from these events, in the interests of more effective public administration in the Department of Health and, indeed, elsewhere.  I intend to give him the greatest latitude possible for recommendations in this regard.  I expect to receive his report by 1st March next year and I will publish it also.

I am not interested in blame.  I am interested only in achieving excellence in public administration, in the interests of patients, public and staff.

There is every reason for the Department of Health to strive for and to achieve excellence, particularly at this time of change when its role will be more focused on policy, legislation and evaluation.  I look forward to this report helping us to achieve that.


The legislation before the House today will bring clarity to an area which has not been operating on a sound basis going back nearly 30 years. This is a genuine attempt to correct that flaw, so that charges for long term care will now have a sound legal basis.

This Bill will ensure that the income from charges will continue to support the provision of quality services to those in long term care.

If we do not allow this funding to be retained, the loss of resources for the health services is estimated to be approximately €8 to €10m per month.

It has been accepted that these charges, as contributions to the cost of care, are fair and reasonable.

I commend this Bill to the House.


  1. Background note on history of legal basis for charges
  2. Circular of the Department of Health, 1976
  3. Report of the Secretary General 13 December 2004
  4. Minutes of DoHC-CEOs meeting 16 December 2003