The Department of Health is to seek a supplementary spending estimate of about €350 million to allow nursing home repayments to begin next month.
Over the next two years, some €1 billion will be repaid to people who were illegally charged for their stay in public nursing homes or in public beds in private nursing homes.
Priority will be given to 20,000 patients who are still alive and refunds will then be paid to the estates of 40,000 to 50,000 people who have died.
The average payment has been estimated at €15,000-€16,000 for a typical three-year stay, but long-term residents will receive much larger refunds.
The Oireachtas Health Committee heard yesterday that while first repayments would be made in July, the bulk of refunds would begin in September and October.
"We would be very disappointed if that wasn't the case," Dermot Smith, assistant secretary at the Department of Health told the committee. He said provision had been made for the repayments to continue up to 2008 as it was unlikely all repayments would be made by the end of next year.
It also emerged that 175 cases are being taken against the State over the illegal deduction of nursing home charges.
Some of these cases were initiated after the Supreme Court ruling last year, which struck down the Government's attempt to retrospectively legalise the illegal nursing home charges over the last 20 years. Some litigants have lodged claims for exemplary and punitive damages. It is understood that the State is also being challenged for ruling out refunds to the estates of those who died before December 1998.
Fine Gael TD Liam Twomey questioned the State's liability where over-70 year olds were charged for private nursing home care, despite being eligible for the medical card since 2001.
Refunding people for private care would make the €1 billion figure seem like "small change", Mr Twomey said. "Is there a serious problem brewing here?"
Last year, Ombudsman Emily O'Reilly said she believed the State could face compensation claims from patients who had to avail of private nursing home care because of a lack of public facilities.
Michael Scanlan, secretary general at the Department of Health, said it was "constantly in touch" with the Attorney General's office on this issue. "I would be very wary of saying any more than that," he said, citing legal reasons.
The nursing home charges issue had been a "traumatic" experience for the Department of Health but it had recognised the importance of learning from experience. "I believe our guiding philosophy must be vigilance and not complacency," he said.
The Health (Repayment Scheme) Bill 2006, which provides a legal framework for the refund of the charges, will be signed into law in the coming days. Early next week, a contract will be signed with the private company which won the tender to run the repayments scheme.
The decision to outsource the project was criticised yesterday. Fianna Fáil Senator Terry Leyden said hundreds of HSE staff were engaged in the annual medical card review which was a "total waste of time", yet an outside company was being paid to administer the refunds scheme.
Mr Scanlan said the department "simply does not have the resources" to administer the scheme.
