Officials with a special claims unit have been phoning elderly people at home as part of a "proactive" drive to slash applications, an Irish Independent investigation has found.

In one case, an 81-year-old woman who applied for a payout was phoned by HSE officials to discuss her "options". She was one of several hundred people who then received a letter saying she had agreed to discontinue her application.

This has been hotly disputed by the pensioner and her family, who wrote to the HSE demanding clarification, but did not get a reply.

"We're in a state of disbelief over this and my mother cannot understand what is happening," the woman's daughter said.

Health Minister Mary Harney last night confirmed that she has ordered the HSE to investigate the case. But she admitted the administrator of the Health Repayment Scheme has taken "a proactive approach to clear the large amount of deficient claims".

The minister added: "The majority of these claimants would have received multiple letters seeking additional information and follow-up phone calls."

Labour TD Mary Upton last night expressed serious concern at the HSE's methods. She said the phone calls would only serve to confuse "and give elderly people a sense of worry and make them think their claim is at an end."

"I would see this as sharp practice and I would query what the word proactive means in this case because it implies that the behaviour in making the calls is appropriate," she told the Irish Independent.

"I am also concerned there has been no follow-up letter to those who want to know if their application still stands."

Age Action Ireland, whose chief executive Robin Webster is on the scheme's oversight committee, called the phone calls "unacceptable practice".

A spokesman said: "We are shocked that the administrators of the scheme would phone people to discuss their options. These are big decisions and... need to be communicated in black and white. We want the oversight committee to investigate the issue."

The HSE last night defended its tactics. A spokeswoman claimed that making direct telephone calls to claimants was more effective than writing to them.

She said that many of approximately 1,000 applications made under Section F of the claim form -- which deals with claims made by living spouses and/or children who paid money out of their own resources on behalf of a patient in a nursing home -- had been filled out in error.

"In many cases ... Section F is not relevant to their claim," she explained.

"The administrator has issued several hundred letters to applicants advising them that this is the case," she added.

The spokeswoman said these letters made it clear that claimants could still apply under another section (Section H). However, the letter sent to the 81-year-old claimant makes no reference to section H.

Although the HSE initiated the phone calls, its letters begin by inferring that the claimant called them, starting: "Further to your telephone conversation with us, we write to confirm that you informed us you now wish to withdraw your claim for payments made from your own resources."

The controversy comes as new figures -- obtained by the Irish Independent -- show scheme administrators rejected 9,600 of 36,000 applications made since August 2006, while offers were made to more than 13,000 claimants and 9,500 were paid out.

The scheme's administrators, accountants KPMG, were paid €5.8m since 2006, while €1.3m was spent on advertising and PR consultants.