The Taoiseach has said the State "does not have a leg to stand on" over a decision not to pay the Disabled Persons' Maintenance Allowance (DPMA) to vulnerable people in residential care, according to legal advice.

RTÉ Investigates has revealed that the State denied up to 12,000 people their disability payment.

Documents seen by RTÉ Investigates show that the incoming 2011 government received an unequivocal warning about the risks surrounding the non-payment of disability allowance to people in institutional care.

In a memo to Fine Gael and Labour ministers, they were warned that this issue presented the State with "very considerable legal exposure".

RTÉ Investigates revealed yesterday that the State denied up to 12,000 vulnerable people their disability allowance payments, and was advised that if those disabled persons sued the State for the payments, their cases were likely to succeed.

Ministers were told in 2011 that the regulations used to deny the payment were "plainly ultra vires and void" – this meant that they had no legal effect.

Speaking during Leaders' Questions in the Dáil, Leo Varadkar said this issue was a historic one that was resolved 15 years ago, but it would be looked at by the Government again now.

This was because it was different in substance to the nursing home charges issue, he said.

A Government spokesperson earlier this week confirmed that a strategy was in place to defend cases taken by those seeking compensation for some nursing home charges dating back several decades.

Mr Varadkar said the Government had a responsibility to do what was right and good and to protect the taxpayer.

The Sinn Féin leader said a cold, heartless Government strategy meant vulnerable people were not given their disability payments.

"There were citizens who may not have the capacity to initiate their claim ... the human cost has been heavy and deep," Mary Lou McDonald said.

Why did the State fight disability payments for so long?
Up to 12,000 vulnerable people denied disability payment by State

The Labour leader accused successive governments of pursuing a "callous legal strategy" that did not serve the common good.

Ivana Bacik called for an overhaul of the Office of the Attorney General to ensure that it "acts in the public interest" and for secretaries general to be brought before the Public Accounts Committee to account for legal strategies pursued by their departments.

During Leaders' Questions, Ms Bacik said that recent controversies had shown that people who can endure the cost and stress of litigation can secure their "legal right", while "those who can't, don't".

However, in response, Mr Varadkar insisted that controversies over nursing home charges and disability payments were different, and the legal advice reflected that.

He rejected Ms Bacik's assertion that the Government did not pursue the common good, arguing that governments that he has been part of have initiated efforts to correct wrongs of the past, such as seeking to set up redress schemes for victims of Magdalene laundries, mother-and-baby homes, mica and defective buildings.

Mr Varadkar told the Dáíl that it was important to avoid a situation where too much of today's budget is diverted to correcting errors of the past and insisted that a "balance must be struck".

Earlier, Minister for Children, Equality and Disability Roderic O'Gorman said the State should be influenced by its obligation to its most vulnerable citizens when adopting legal positions.

Speaking on RTÉ's Morning Ireland, Mr O'Gorman said it would appear that the State's central obligation to the vulnerable has been obscured by a "saving State resources" approach.

"I don't think we can have that," he added.

Tonight, Mr Varadkar told the Fine Gael parliamentary party that the Government will get to the bottom of the historic disability payments issue and do whatever is legally required and morally just.

The Fine Gael leader said all facts will be gathered before any decisions are made.

Additional reporting Tommy Meskill