By Harry McGee, Political Editor
UP TO 70,000 people illegally charged for nursing home care are to be repaid in full with interest in a radical compensation scheme which could cost €1 billion.Only pensioners still living and the estates of those who died after December 1998 will be refunded. The Government will apply the statute of limitations to all other claims.

The former Secretary General of the Department of Health told a Dáil committee examining the issue that had a meeting scheduled with the Tánaiste and Health Minister Mary Harney proceeded last year, she would have been informed of the nursing care charges issue.

But Michael Kelly said all the briefings were cancelled by Ms Harney’s private secretary and some had only been held in recent weeks.

Mr Kelly said he complained in a memo about the lack of opportunity to hold briefings with the Health Minister.

The repayment scheme is expected to cost between €500 million and €1bn, and will take years to complete.

Details of the scheme will be published today by the Department of Health. The plan is expected to provide for up to 70,000 long-stay residents who were illegally charged.

It’s understood some 40% of the 65,000-75,000 people entitled to compensation will be paid promptly.

Ms Harney will apply for a supplementary estimate from the Department of Finance to cover the scheme.

An outside agency with expertise in handling large compensation schemes will be drafted in, sources said last night, and it could “take some time” to identify and compensate valid claimants.

The revelation about the illegal basis of nursing home charges - which date back to 1976 - only came to light last October.

It subsequently emerged that senior officials in the Department of Health had failed to inform the Tánaiste about the problem despite the department seeking advice from the Attorney General 10 months earlier.

An inquiry carried out by former Forfas head John Travers found there had been “systematic” and continued failure to deal with the problem within health for almost 30 years.

The department’s general secretary Michael Kelly resigned after being criticised in the report.

Politically, the Government is hoping the compensation scheme will bring to an end the controversy caused by the illegal charges.

While the details of the scheme have been well-signalled, there were legal difficulties that had to be overcome in relation to some aspects, particularly the controversial decision to impose the statute of liberations.

However, it is expected the compensation package will be challenged in the courts by lawyers representing affected families.