The State cannot afford to widen eligibility for two allowances for disabled people as advised by Ombudsman Emily O'Reilly, Minister for Health James Reilly has said.

Implementing a recommendation to widen eligibility for the mobility allowance and the motorised transport grant would cost the exchequer €500 million over three years, Dr Reilly told an Oireachtas committee yesterday. Current funding for both schemes is €10.6 million a year.

Last year Ms O'Reilly was heavily critical of Dr Reilly's department in two reports that found the exclusion of older people from eligibility for the allowances contravened equality legislation.

However, Dr Reilly told the Committee on Public Service, Oversight and Petitions the cost of expanding eligibility for the schemes and administering expanded schemes was "completely unaffordable".

Any solution would have to be achieved within the current budget. Otherwise, funding would have to be taken from front-line services.

Minister of State at the department Kathleen Lynch said the rules could not be changed without reducing the amounts paid to people currently on the schemes. The number of recipients of the mobility allowance could increase from the current 4,700 to 63,500 if eligibility was widened. The numbers availing of the motorised transport grant would rise from 300 to 19,250.

Changing the rules of the schemes could be funded only by cutting front-line services by, for example, reducing health service employment by 3,400 or eliminating all day residential and personal assistant services for people with physical disabilities, she said.

Alternatively, the change could be effected within budget limits by reducing the mobility allowance from the current level of €208.50 per month to €12.20. The motorised transport grant would have to be cut from a €5,020 maximum over three years to €67.50.

Later, Department of Health secretary general Ambrose McLoughlin sharply criticised Ms O'Reilly for "misunderstanding and mischaracterising" the department's position on long-stay charges for older people.

He claimed a 2010 report from the Ombudsman failed to take into account limitations on resources. He said it was "seriously and fundamentally untrue" for Ms O'Reilly to claim it had failed to co-operate with her investigation.