THE cost to the Exchequer of claims lodged by current and former Army members for hearing impairment could be as high as £350 million, according to official estimates. Around 5,000 claims have been lodged with the Department of Defence claiming hearing impairment from exposure to gunfire and the Department of Finance is now understood to be seriously concerned about the budgetary implications.

The Attorney General is believed to be examining the issue, which could become a serious financial headache to the Exchequer. Already more than 600 claims have been processed. Revised departmental estimates for spending this year, published earlier this week, showed that £12.8 million has been allocated to meet these claims this year, up from £8.779 million the previous year.

However, on the basis of the claims still to be processed, the cost could build substantially in future years as the cases are settled or come to court. Calculations provided to Government by the Department of Defence are understood to estimate that, on the basis of claims received so far, compensation payments could total £200 million. On top of this, the State may have to pay £80 million for its own legal costs and £70 million for the legal costs of the claimants, bringing the total potential bill to £350 million.

The claims have come from current and former military personnel and have recently been lodged in the Department at a rate of 100 a week. The Minister for Defence, Mr Barrett, told the Dail recently that the major issue facing the State was the current high degree of compensation awarded by the courts for hearing patterns which, he was advised, in other jurisdictions would be regarded as being within the normal range and would attract little or no compensation.

Mr Barrett said that, against this background, he had a duty to the taxpayer to fight those cases where the level of handicap was not significant when judged against internationally accepted criteria.

Claims were first received by the Department in 1992, but have accelerated rapidly in recent years. Last year alone, 2,500 claims were received be hearing claims are the latest in a series of once off costs to hit the Exchequer. The Minister for Finance, Mr Quinn, is already dealing with the Hepatitis C compensation bill and has also reached agreement with his Cabinet colleagues on cutting £49 million from departmental spending plans this year to pay for the nurses pay package.