The Supreme Court ruled yesterday that a Co Roscommon man who received disability benefit while allegedly owning three businesses must repay the £43,000 he received from the former Department of Social Welfare.
Mr Michael J. Scanlon, of Elphin Street, Boyle, Co Roscommon, had worked as a signalman for Coras Iompair Eireann until July 1985, when he was released as unfit for work due to failing eyesight.
He was awarded disability benefit from September 1985, which depended on his being incapable of work. He received a total of £43,088.
In April 1995 an appeals officer decided the benefit should be refunded. The officer found Mr Scanlon was involved in the provision of a school bus service and a hackney car service and in the ownership and running of a public house.
The officer rejected as "simply not credible" a claim by Mr Scanlon that, although he was the owner of these businesses, he was not involved in running them.
She was "quite satisfied that this businessman was working while claiming and in receipt of disability and pay-related benefit".
On whether Mr Scanlon had claimed with fraudulent intent, the officer said she was not quite so sure. All the businesses had been in operation while Mr Scanlon was employed by CIE.
The officer was satisfied Mr Scanlon's involvement in his businesses as manager and occasional operator constituted work and that he derived benefit from this work.
She was not fully satisfied that Mr Scanlon knowingly made false or misleading statements in claiming disability benefit but based on the "new evidence" that he was working, she was satisfied the benefit was not payable and should be refunded.
The Minister for Social Community and Family Affairs (formerly minister for social welfare) brought High Court proceedings for the recovery of the money, but the court dismissed the claim on the basis that social welfare legislation introduced after 1985 should not be interpreted as having a retrospective effect.
However, the Supreme Court upheld an appeal by the Minister against the High Court findings yesterday and granted a decree to the Minister for £43,088.
Mr Justice Fennelly, giving the court's decision, said the Minister's demands were made under provisions in the 1993 Social Welfare (Consolidation) Act. The controversy surrounded the question as to whether 1991 social welfare legislation gave a retrospective effect. The Minister's right to recover was based only on "new evidence"
Under the 1952 Social Welfare Act, decisions to grant benefits were, at all times since then, subject to the possibility of revision. But in effect, when fraud was not established, the benefit recipient could not be asked to repay, the judge said.
The first encroachment on this distinction between revision on the ground of fraud with full reimbursement and all other cases, where the Minister was barred from seeking reimbursement, had occurred in the 1991 social welfare legislation.
The discovery of "new evidence or new facts" might or might not involve the discovery of fraud or wilful concealment and thus might or might not enable the Minister to seek reimbursement. A 1992 Act said the new evidence related to periods before and after the 1991 legislation. Those provisions were in the Consolidation Act of 1993 and were capable of retrospective effect.
Mr Justice Fennelly said he could not identify any constitutional right to retain the benefit of money wrongly paid. He held that a retrospective reading of the legislation would not infringe any constitutional right.