HUNDREDS of pensioners have had free TV licence, electricity and phone allowances suspended because they were found to be living in a nursing home.
The revelation has raised concerns that the allowances were being used in some cases by relatives, such as grown-up children, who were still living in the family home.
The household benefits package, which costs €406m per year and is paid to all pensioners over 70 regardless of their income, is expected to be targeted by the Government in the forthcoming Budget.
Social welfare inspectors discovered that 700 elderly people in total were being paid their free TV licence, electricity and phone allowance even though they were no longer living in their own home.
The Department of Social Protection has admitted there may have been "other persons" living in the house.
The department had carried out checks on 1,000 pensioners in total in 2010 that it suspected of being in a nursing home.
As a result, 700 pensioners had their household benefit packages suspended. It is the first time the results of the operation have been revealed.
The department said the problem arose because the elderly people had failed to notify the department they were moving to a nursing home.
"This can often be due to genuine serious illness, old age and resulting oversight and is seldom as a result of a deliberate attempt to defraud the department," a spokeswoman said.
The department achieved savings of €645,000 -- based on the estimated loss it would have suffered if the problem had not been detected.
It did not seek any refunds from the pensioners who were now in nursing homes.
And it did not seek any refunds from companies like the ESB, Bord Gais, Eircom and An Post who get paid millions of euros to provide the free allowances under the household benefits package.
The department justified this by saying that the electricity allowance of up to 2,400 units per year was paid on the basis of usage.
It said if a pensioner was in a nursing home there would be "little or no usage".
It said utility companies would not have benefited in "any significant way".
"In the case of a TV licence, it would have been granted prior to admission to hospital and thus no refund is due for part of a year," it said.
The department carried out a follow-up operation on the household benefits package, which involved a review of the 2,600 people over 90 to see if they were also in nursing homes.
However, it said this did not produce any significant savings.
The department would not say if it was requiring nursing homes to provide it with PPS numbers of new nursing home residents -- which would instantly show up if a person was still getting the household benefits package.
It said that it matched data with other agencies and utility providers to help identify those customers who were no longer entitled to the household benefit packages.
Those between 65 and 70 years of age are means tested before they get the package but it is provided automatically to all those over 70.
At the end of October 2010, there were 396,651 pensioners getting the package, of which 259,613 were aged over 70 years.
Under the electricity and gas allowance, customers get 1,800 units. ESB customers with Electric Ireland receive an allocation of 150 units a month on their bills, with direct payment made by the department to Electric Ireland under the standard rate.
Customers who use other suppliers, such as Airtricity or Bord Gais, or who use gas, receive a cash payment of €39.40 a month.
The telephone allowance is €22.22 a month. Eircom customers have this paid directly on their bills and under a special deal negotiated with the telephone company they get €26.86 off their bill each month.
Anybody else, including those who use mobile phones, gets €22.22 in cash. The free TV licence is worth €160 a year.