2000 Annual Report of the Comptroller and Auditor General and Appropriation Accounts.

Vote 40 - Social, Community and Family Affairs.

Mr. E. Sullivan (Secretary General, Department of Social, Community and Family Affairs) called and examined.

Witnesses should be aware they do not enjoy absolute privilege. The attention of members and witnesses is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privilege and Immunity of Witnesses) Act, 1997, grants certain rights to persons who are identified in the course of the committee's proceedings. Notwithstanding this provision, I remind members of the long-standing parliamentary practice to the effect that Members should not comment on, criticise or make charges against a person outside of the House or an official either by name or in such a way as to make him or her identifiable.

I call on Mr. Sullivan to introduce his officials.

Mr. Sullivan

Thank you Chairman. I am accompanied by Mr. John Hynes, director general of social welfare services; Mr. John Doyle, accounts branch; our accountant, Ms MaeveHarold, and Ms Anne Tynan also from the Department. My colleagues from the Department of Finance are Mr. Tom Murphy and Mr. Alan Zambra.

The Comptroller and Auditor General will deal, first, with paragraphs 33 and 34 and later with paragraph 35. We shall defer discussion on paragraph 36 - Mr. Sullivan will appreciate the reason for this. Paragraphs 37 and 38 will be examined at a later date in this session.

Paragraph 33 of the Report of the Comptroller and Auditor General reads:

33. Overpayments

The Department of Social, Community and Family Affairs administers some 50 welfare schemes paid through Vote 40 and the Social Insurance Fund. Expenditure on assistance and insurance schemes was £2.70bn and £2.36bn respectively in 2000.

Table 1, Table 2 and Table 3 outlineoverall expenditure on various schemes over the period 1996 to 2000, and for the same period, the amounts recorded as overpayments, the amounts of overpayments attributed to fraud or suspected fraud and the Department's cumulative record of recovery since 1996.

Table 1 Scheme Expenditure

1996

1997

1998

1999

2000

£m

£m

£m

£m

£m

Social Insurance

1,794

1,842

1,983

2,111

2,357

Social Assistance

2,399

2,491

2,567

2,614

2,698

Total

4,193

4,333

4,550

4,725

5,055

Table 2 Number and Amount of overpayments recorded for recovery (Numbers shown in brackets)

1996

1997

1998

1999

2000

£m

£m

£m

£m

£m

Social Insurance

4.12(12,366)

4.48(12,925)

4.14(13,897)

6.03(18,080)

5.03(15,252)

Social Assistance

14.73(20,243)

16.30(21,759)

18.08(22,054)

16.38(21,346)

16.22(18,110)

Total

18.85(32,609)

20.78(34,684)

22.22(35,951)

22.41(39,426)

21.25(33,362)

Table 3 Number and Amount of overpayments attributed to fraud or suspected fraud (Numbers shown in brackets)

1996

1997

1998

1999

2000

£m

£m

£m

£m

£m

Social Insurance

2.23(3,074)

2.01(3,271)

2.16(4,810)

2.53(5,821)

2.67(5,159)

Social Assistance

11.41(7,486)

12.50(7,914)

8.541(9,383)

9.56(9,273)

8.58(7,466)

Total

13.64(10,560)

14.51(11,185)

10.70(14,193)

12.09(15,094)

11.25(12,625)

The amount of overpayments attributed to fraud or suspected fraud compared to total overpayments since 1996 is summarised in Figure 1.

1 This fall of almost £4m was principally due to a change in the way the Department classified overpayments arising from the finalisation of the estates of recipients of non-contributory social welfare scheme payments. Prior to 1998 such overpayments were deemed to be attributable to fraud or suspected fraud.

The Departments record of recovery of overpayments during the period 1996-2000 is shown inTable 4.

Table 4 Departments record of recovery of overpayments 1996 to 2000

1996£’000

1997£’000

1998£’000

1999£’000

2000£’000

Overpayments not disposed of at 1 January

31,423

35,082

37,579

42,229

47,712

Overpayments recorded for recovery

18,853

20,781

22,221

22,405

21,250

less

over payments recorded in prior years cancelled

(430)

(301)

(378)

(230)

(352)

sums recovered in cash

(4,399)

(4,638)

(5,335)

(4,059)

(5,878)

sums withheld from current entitlements

(3,311)

(4,274)

(3,880)

(3,307)

(3,937)

net amounts written off as irrecoverable

7,054)

(9,071)

(7,978)

(9,326)

(8,077)

Overpayments not disposed of at 31 December

35,082

37,579

42,229

47,712

50,718

Paragraph 34 of the Report of the Comptroller and Auditor General reads:

34. Prosecutions

Cases involving abuse of the system are considered with a view to taking legal proceedings. Prosecutions are taken against employers who fail to carry out their statutory obligations and persons who defraud the social welfare payments system. Prosecutions can either be by summary or indictment proceedings. Civil proceedings are taken to facilitate the recovery of scheme overpayments or the collection of PRSI arrears. Such cases are only taken where it has been established that the debtor has sufficient means to discharge the debt.

During 2000, 263 criminal cases (1999 - 329 cases) and 6 civil cases (1999 - 9 cases) were forwarded to the Chief State Solicitor's Office for prosecution as shown in Table 5.

Table 5 Criminal cases forwarded to the Chief State Solicitor

1999

2000

Unemployment Assistance

171

164

Unemployment Benefit

77

56

Disability Benefit

27

8

Invalidity Pension

1

1

One Parent Family Payments

10

8

Other Schemes

3

4

Offences Committed by Employers

40

22

Total

329

263

A total of 185 prosecutions (1999 - 107 prosecutions) involving social welfare recipients were finalised in court in 2000. The total amount of overpayments assessed in cases of persons who attempted to or obtained benefits/assistance fraudulently was £666,759 (1999 £426,078). The results of these 185 court cases and the penalties imposed are given in Table 6.

Table 6 Results of Court Cases involving Social Welfare Recipients

Fines Imposed2

Community Service

Imprisoned3

Probation Act

Proven No Penalty

Unemployment Assistance

5133

4

22

26

7

Unemployment Benefit

10

1

4

8

4

Disability Benefit

1

1

2

1

-

Invalidity Pension

5

-

-

-

-

One Parent Family Payments

-

-

2

1

-

Other Schemes

-

1

1

-

Total

100

6

31

37

11

2 Fines to a value of £27,269 were imposed by the courts (£9,728 in 1999 in 41 cases)

3 23 subsequently suspended

The prosecution of 28 cases involving employers (1999 - 37 employers) were also finalised. The results of these court cases and the penalties imposed are given in Table 7.

Table 7 Results of Court Cases involving Employers

2000

Cases Fined4

22

Prison Sentence

1

Probation Act

2

Proven/No Penalty

3

Total

28

4 Fines to the value of £7,910 were imposed by the courts (1999: £10,006 in 37 cases)

There were no civil cases finalised in 2000 (1999 -zero cases). The number of prosecutions finalised in the courts since 1996 is summarised in Figure 2.

Mr. Purcell

It is expedient to take paragraphs 33 and 34 together. Paragraph 33 sets out in summarised form the number and value of social welfare overpayments in 2000 together with comparative figures for earlier years. There were overpayments totalling £21 million in the year of which £11 million was attributed by the Department to fraud or suspected fraud. The committee will note that the outstanding cumulative overpayments at the end of 2000 totalled just over £50 million. That is after writing off over £41 million as irrecoverable in the last five years. I point out that neither the level of recovery of overpayments nor the amounts written off show any major fluctuation in recent years.

Paragraph 34 records the number of prosecutions taken by the Department against social welfare recipients and employers who have perpetrated fraud against the system. Taking the social welfare recipients first, the committee will note that 185 criminal prosecutions in this cate- gory were finalised in court during 2000. This was a big increase on the 107 such cases finalised in the previous year.

Turning to the employers side, 28 criminal cases were finalised, a drop from 37 in the previous year. All prosecutions in both categories were successfully prosecuted. Civil proceedings may also be taken by the Department to effect recovery of overpayments or to collect PRSI arrears in cases where the debt is significant and it has been established that the debtor has sufficient means to discharge the debt. Somewhat surprisingly, no civil case has been finalised in the past three years despite the fact that 24 such cases had been forwarded to the Chief State Solicitor's office in the same period. I am not sure why there should be a lack of movement on civil cases. Perhaps the Accounting Officer will be in a position to enlighten the committee on this point.

I note from paragraph 33 that the Department administers some 50 welfare schemes. Would it be possible to get a list of those 50 schemes? Does the administration of 50 schemes ever lead to duplication? Is it necessary to have so many schemes?

Mr. Sullivan

It is possible to provide a list of the various schemes and services to the Deputy. The Deputy asked if there is duplication. The fact that there are 50 social welfare schemes reflects the way in which the social welfare system has developed over the years. It is a contingency based system and schemes are introduced to deal with particular needs that are identified. Also we have in parallel means tested schemes and insurance based schemes that probably contribute to the numbers. We would not aim to have any direct overlaps between our schemes. One of the issues we always look at with developments in schemes where there might be a possible interaction is to ensure these are done in a satisfactory way so as not to cause confusion and to prevent us falling between cracks.

Is there any liaison between the different Departments regarding the means test? I can never understand why, for example, a blind person who has had a means test must be means tested again when seeking a medical card. Why can the Department not adopt a system where, once a means test is on record, it is the means test used rather than the unnecessary duplication and delay involved in carrying out a means test for every scheme?

Mr. Sullivan

In respect of our own schemes there are different means tests because of the way some of the schemes are dealt with, given the perceived needs in those particular areas. The question of the sharing of information between different Government Departments in the area of means has been raised before. I mentioned before that we are looking at the question of developing a central means database where the means items might be available, certainly within our own Department across the various schemes. Whether they should be available to the health boards along the lines the Deputy mentioned is another question. There are a lot of issues in this to be considered.

We got the same type of answer three or four years ago from the Department of Social, Community and Family Affairs, that it was trying to establish a database. Are we much nearer to it? I accept there are different guidelines for different schemes but the means of the person do not differ. One can apply the means to the guidelines for each scheme. Once the means test is carried out, why should another officer of the Department of Social, Community and Family Affairs have to carry out a further means test?

Mr. Sullivan

That does not happen. If a means test is carried out for the purpose of the Department's schemes, that is it. Where a difficulty may arise is in relation to a health board scheme where there may be different criteria and they might investigate a case. It happens a lot in one of the areas we are trying to do some work on - overlaps between the supplementary welfare allowance and our own schemes where people being investigated by us have recourse to the supplementary welfare allowance through the health boards. That means they are asked certainquestions in relation to their means. Our approach to that is to try to reduce the scope for what are called interim payments on the supplementary welfare allowance side and to put our payments into effect at an earlier date, thusobviating the need for recourse to the health board and that second means test. That is the approach we are adopting. If somebody applies within the Department, there would be only one means test and that would be subject to review subsequently as part of the normal review process of schemes.

Deputy McCormack raised a valid point. In many cases the person is assessed for social welfare and there is another assessment later relating to his medical card. In that situation people ask why there is not uniformity in the means testing. If one looks at it realistically, there is a very stringent means test for a medical card and a variation if one's means exceed a certain amount. The recent decision to give medical cards to people aged 70 was regardless of income. The lack of uniformity in means testing creates a sourness among the public.

Mr. Sullivan

That is probably true, but the means tests are different for the medical card and our own schemes. They are administered by the health boards whereas we administer——

I accept that entirely but, from the point of view of the person, it causes confusion.

In respect of tables 43 and 44 which deal with overpayments between 1996 and 2000, in so far as I can calculate, the total overpayment is roughly £176 million for that period. Table 45 shows the record of recovery of overpayments as £50,718 or is it £50 million?

Mr. Sullivan

They are millions - £50,718,000 in respect of overpayments not disposed of.

Is that £50 million for the entire period or is it for 2000?

Mr. Sullivan

No. That is the cumulative amount. These figures are rolled up. If one looks at the top of the column, one will see overpayments not disposed of at the beginning of the year and then the impact of overpayments recorded in the year, less other ones. That is the cumulative——

Mr. Sullivan probably has more up-to-date figures. Could he give me the percentage of all claims, accidental overpayments or whatever between 1996 and 2000 that has been recovered?

Mr. Sullivan

While I am looking for those figures, can I make a qualification? When we talk about recoveries, we are talking about recoveries of overpayments in a particular year, but that could be in respect of overpayments that occurred in previous years. That caveat must be issued.

In the period 1996-2000, the recoveries would have represented 27%.

That is some 27% of £176 million, or whatever the figure is.

Mr. Sullivan

Sorry, the recoveries amount to about 46% in 2000, 33% in 1999, 41% in 1998, 43% in 1997 and 41% in 1996.

That sounds like more than 27%.

Mr. Sullivan

It is, yes. Sorry, I had to correct the figure. They are the figures I have for the five years.

I have been asking the following question since I joined the Committee of Public Accounts and on every other available opportunity. It pertains to the carer's allowance, alluded to in paragraph 37.

We will deal with that later on and we will deal with paragraphs 33 and 34 for the moment.

With regard to prosecutions, the Comptroller and Auditor General mentioned that there seems to be a slow uptake in the civil cases. Maybe Mr. Sullivan will outline the problems facing the Department in that respect.

Mr. Sullivan

Civil proceedings are considered when it has been established that there is a chance of getting moneys back or when we have failed to do so. It is not so much that we are not engaged in such cases - there are a number in the pipeline.

We had nine cases referred to the Chief State Solicitor's office in 1999, six in 2000 and five in 2001. It is a low level of activity but we do refer civil cases when necessary to the Chief State Solicitor's office.

The Comptroller and Auditor General asked why they have not been proceeded with. That is the point.

Mr. Sullivan

There have been a number. If we have to resort to civil cases, we will, but as I said, the level of activity is low. This year, for instance, there have been five cases so far which we are processing and which are in the pipeline. The figures do not demonstrate that to the Deputy. Six cases were referred to the Chief State Solicitor's office last year. I cannot say what has happened to all those cases at this stage.

Are they referred to the Chief State Solicitor's office——

Mr. Sullivan

We would refer them after that.

How many cases from the Department of Social, Community and Family Affairs are with Chief State Solicitor for processing?

Mr. Sullivan

We referred five this year.

How many last year?

Mr. Sullivan

Six. We referred nine the previous year. I do not know the status of those cases. That is all I can say.

Are civil cases referred if they have a financial debt in excess of £2,500?

Mr. Sullivan

Yes.

Therefore, have we established that any case where the debt exceeds £2,500 proceeds by way of a civil case?

Mr. Sullivan

No.

How many cases would involve a fraud in excess of £2,500?

Mr. Sullivan

It is only in cases where we cannot get the money back by other means that we proceed by way of civil proceedings. If there is an overpayment, fraud or whatever and we try to recover the money from the person involved, it is only in circumstances where we cannot go any further in terms of recovering it that we resort to civil proceedings.

The recovery could often be £5 per month.

Mr. Sullivan

Correct.

It could go on for a lifetime.

Mr. Sullivan

That is correct.

It must be reconciled with the recovery and the lack of progress, perhaps, in civil cases. For example, consider a pensioner who has died but did not declare all his means when applying for an old age pension. Legally, some of the first persons involved in the recovery of the estate are those concerned with social welfare. In many cases, it is from the estate of a vulnerable widow, who may not know what happened in the past because her late husband handled the financial matters, that the recovery must be made. In such cases, we are talking about amounts in excess of £2,500. In a lot of cases, the recovery is £5 per month, which can go on for a lifetime. In very few instances does it proceed to a civilcase.

Mr. Sullivan

In cases where £5 per month is being recovered, or whatever it might be, there are no other means of doing so. We cannot increase it because people cannot pay it back. We are conscious of striking a balance.

Are employers who have not paid PRSI included in civil cases as well?

Mr. Sullivan

If they failed to comply with the PRSI rules or to refund PRSI that is due, we would prosecute them.

In civil cases, would Mr. Sullivan be more inclined to proceed against employers rather than pensioners or such people, or would they all be treated on the same level according to principle?

Mr. Sullivan

In general, we would not be prosecuting pensioners.

That is what I found. I would think it pertains more to employers.

Mr. Sullivan

I could not say we never did it, but I am not aware of such a case.

How many pending civil cases involve employers?

Mr. Sullivan

Can we check our papers to see? In spite of all the figures I have available, I do not think I have the requested breakdown here.

As the Comptroller and Auditor General reported, there are about 30 cases from the past three years that have not been processed.

Mr. Sullivan

I will have to check that, Chairman.

Are they cases that have gone from the Department to the CSSO?

Mr. Sullivan

Yes.

We have established that we do not know how many of those civil cases involve employers.

Mr. Sullivan

I suspect none of them does.

None of them does.

Mr. Sullivan

I suspect so, but I would have to check.

Why would you not proceed along civil lines in the case of the employer?

Mr. Sullivan

In relation to an employer you are talking about PRSI which is a matter for the Revenue Commissioners to pursue rather than us. The cases we take against employers typically involve non-compliance with PRSI regulations - in terms of keeping records - and obstruction. It may be that they are not complying with the commencement-of-employment regulations we introduced whereby employers in certain sectors have to notify us of persons commencing employment. Those are the kinds of issues we have with employers. Money issues fall under the remit of the Revenue Commissioners who collect PRSI.

Will you contact the DSSO to find out what stages these cases are at so we can follow it up to see if they are proceeding or gathering dust?

Mr. Sullivan

I can certainly provide the committee with a note on the status of those cases if it is of use. I do not know if they have it back at the Department, but I will certainly provide it.

I notice the percentage of overpayments is going down compared to the total payout. Going back over the years, I remember there used to be areas of the country where you had a greater percentage of false claims. A greater percentage came from the north than from the south and from Dublin. Is that still the case? Are people still coming across the Border to claim on both sides?

Mr. Sullivan

They may well be and we should try to stamp it out. It is not as big a problem as it certainly was.

Clearly the reduction in numbers on the live register has helped reduce the general level of overpayments. There is a higher level of compliance than there was previously and we have stepped up our activities and our programme of reviews of the schemes. We have tried to manage overpayments as a debt. In each area of the Department that administers a scheme, management has focused on the overpayments and their recovery and tried to identify the reasons for them in the first place. We are taking a more proactive approach to prevent overpayments, detect them and recover the moneys as soon as it has been established that overpayments have been made.

I return to the results of the court cases. I have often heard it claimed that if you are prosecuted and you are poor you are more likely to end up in prison than you are if you are wealthy. The figures on the two charts we have confirm that very clearly. Table 47 lists the results of court cases involving social welfare recipients. If my maths are right I reckon the average fraud was about £3,604 and yet 31 of these people - 16% of the total prosecuted - were imprisoned. I appreciate that is a matter for the judiciary, but it is something I would like to look at. In the court cases involving employers there was one imprisonment, which works out at 3.5% to 4%. I gave the average overpayment in the cases of fraud by social welfare recipients, but we do have a similar figure for employers. Is that information available? There were 28 cases in total and there was one imprisonment.

I would like to get a feel for the kind of money involved. The average fraud in the 185 prosecutions of social welfare recipients involved £3,604, but are there extremes? Do sentences of imprisonment involve very high levels of fraud? This certainly makes startling reading and I am surprised at it.

Mr. Sullivan

The average overpayment for 2000 is £3,500 for cases settled in court. It was higher the previous year and so far this year it is about £4,000. As I said earlier, in the case of employers prosecutions do not tend to involve money. They do not concern PRSI, but incomplete records, failure to keep records or to failure co-operate with the Department in an investigation. The cases are more likely to involve obstruction.

Are there no figures available for the 28 cases?

Mr. Sullivan

I suspect that if I delve into them I will not find figures because we are not pursuing money. We are trying to prosecute employers who are not co-operating with the PRSI system in terms of recording employees they have or who are obstructing us in an investigation that we are carrying out in relation to working and claiming.

An obstruction of that nature is usually for financial gain and the Comptroller and Auditor General normally gives us the sums involved in such cases. Can we get those? I appreciate that once a case goes to the courts it is a matter for the judiciary but, given Mr. Sullivan's experience, is he surprised at the average rate of imprisonment? Is it reoffenders who are imprisoned? The percentage is very high given an average figure of £3,500.

Mr. Sullivan

As the footnote to the Comptroller and Auditor General's report shows, 23 of those 31 sentences were subsequently suspended. Nevertheless a sentence was imposed. I do not honestly know if that is surprising. We prosecute people in the more serious cases. They would be more likely to be repeat offenders. In that context, perhaps it is not that surprising. It may not necessarily be the first time these people have defrauded the system. I suspect that if you delve behind the figures you would find, given the criteria we have for prosecuting people, they would not necessarily be first time offenders. They are more likely to be second time offenders or multiple offenders.

I appreciate that we need a deterrent. However, if only from a value for money perspective considering the cost of keeping people in prison, I would prefer us to look at this as a waste of State funds. While in no way wanting to impede the work of the Department, it is ludicrous that 16% of offenders in that category are being imprisoned. I would like to get some further information on it, though not today because we are straying from Mr. Sullivan's area into that of the Judiciary. I would like the committee to examine this to see what we could do and what measures could be taken. I appreciate that the full range of the terms were used and the community service fines or imprisonment were imposed or the Probation Act applied. I would still like to have this analysed. Beyond the humanitarian implications I would like to see it examined in terms of value for money. Is it possible to do that?

We will look at that.

Looking at the record of recovery of overpayments, in the five-year period from 1996 to 2000, £36.5 million has been written off as irrecoverable. In the past year the figure written off is £8,077,000. It would appear that as much is being written off as irrecoverable as is recovered. What is the criteria for writing a sum as irrecoverable? How many cases, and what type, are reflected by the figure of £8,077,000?

Mr. Sullivan

There is an automatic write-off after three years if there is no recovery by then for different reasons, such as someone dying or not having the means. Payments, then, are written off after three years. The bulk of write-offs in any one year are over three years old for which there is no possible recovery. I do not have to hand the figure for the number of cases that would represent, but I will find out.

What type of cases are they?

Mr. Sullivan

I do not have that information here, but I will provide a note on it.

You do not have the answers to a lot of the questions we ask when we follow up the comments of the Comptroller and Auditor General and that is regrettable. You say that you will furnish the information, but I expected you to be able to provide a profile of the cases relating to this £8,077,000, and say if they concerned unemployment benefits or pensions, for example.

Mr. Sullivan

I have quite an amount of information, Chairman, as you will appreciate, on the overpayments and analysis and preparation for the committee. You are referring to a couple of points on which I do not have information to hand.

You must admit, Mr. Sullivan, that these are the points that the committee would pick up on. You say that an amount is considered irrecoverable after three years. Does that mean that if a person was tough enough to stretch it out to the limit, it would be written off? It appears that civil cases are rare. Therefore, would a person who is smart enough and tough enough get away with it?

Mr. Sullivan

In theory, that is possible. However, we are discussing cases where it was impossible to recover money and where we could not take further action. Prosecutions are intended to be a deterrent. We do not prosecute for the sake of prosecution. They are the more serious cases, where the person has offended more than once or the sum is over a certain amount. The Department's attitude is that if someone tries to tough it out, then it will be as tough in return. It is not a question of someone hanging on until the amount is written off, but that the written off cases are those where no action is possible.

There is a contradiction here. We hear about the Celtic tiger, a buoyant economy and the low number on the live register while the media reports the Department's successful record of taking prosecutions. However, £8,077,000 is written off, despite the buoyant economy, in 2000. In 1999 the figure was £9 million and, in 1998, it was almost £8 million. A positive image is given in the media about recovery, but that so much is written off in such buoyant times must be criticised.

Mr. Sullivan

As I said, our approach is part of a wider strategy to the control of social welfare expenditure, which is more than £5,000 million in any year. That does not trivialise the size of the overpayment, which is considerable, and we have an onus to reduce it and prevent any fraud. Once found, we must recover overpayments as best we can. We recover what we can, but it is sometimes a slow process because of an individual's circumstances and that must be taken into account. Sometimes we recover the amount in cash but at other times it is more difficult. In some cases, we simply cannot recover the money.

My point is that I find it hard to reconcile a sum of £8,077,000 being written off as irrecoverable although there may be many reasons for it. All public representatives are aware of cases where widows, whose husbands had just died and who were at their most vulnerable, were told by their solicitors that they received more than they were entitled to on a non-contributory pension for a number of years. A widow probably would not realise this, yet your Department has first claim on the estate to claw back this money even though her financial affairs may not be sound. That is why I find this hard to reconcile. The widow is the soft touch.

I know that you are doing your job in claiming back something to which people were not entitled, but often a widow is unaware of what her husband did to claim a pension or that there were savings which militated against a non-contributory pension. As a public representative, I find it hard to accept £8,077,000 being written off while some people are treated harshly.

Is the Department responsible, through mistakes or a reason other than fraud, for a percentage of overpayment? If so, can that be recovered and how is it handled?

Mr. Sullivan

Overpayment arises for different reasons. We break them down into fraud, non-fraud and estate cases, to which the Chairman referred. The suspected fraud cases represent about 53% of all cases. About 28% of cases arise from departmental or individual error. The estate duty cases represent about 20%. We pursue the fraud and suspected fraud cases. We have a responsibility in other cases to collect any money that was improperly paid and we try to do this with the person's agreement. In the other cases, it is a claim against the estate.

What category of cases come under the sum written off as irrecoverable in 2000, and how many people are involved? It is a substantial amount and might involve a large number of people. You might furnish that information to the Committee.

Paragraph 35 of the Report of the Comptroller and Auditor General reads:

35. Scheme of Community Support for Older People

Introduction

Extended media coverage in 1995 of violent random attacks on elderly people in their own homes focused attention on the need for official action. This resulted in two initiatives.

The introduction, in the 1996 Budget, of income tax relief in respect of the cost of installing security alarms in their own homes for persons aged 65 and over living alone. The work had to be undertaken between 23 January and 5 April 1996 and the maximum relief available was £800.

The establishment by the Minister for Social, Community and Family Affairs of a Task Force to make recommendations to him by the end of February 1996 as to how the security needs of elderly people, who would not benefit from an income tax relief scheme, might be urgently and effectively addressed.

The Minister's Task Force comprised representatives of five government departments (Finance, Environment and Local Government, Health and Children, Justice, Equality and Law Reform and Social Community and Family Affairs), the Garda Síochána, the Irish Farmers' Association, SIPTU, Muintir na Tíre, the Irish Security Industry Association and the National Council for the Elderly.

Submissions to the Task Force highlighted the need for active community involvement in providing security for the elderly. The Task Force accepted the value of community based efforts in solving the problem and wished to see such efforts encouraged in every way possible.

The Task Force concluded that:

There was a need for some mechanism to provide assistance for elderly people who could not benefit from the tax relief measures.

A scheme on similar lines to the scheme for the Support of Voluntary and Community Groups administered by the Department of Social, Community and Family Affairs through its regional structure was a viable option.

Resources should be made available to voluntary groups to subsidise small scale security work and the installation of alarm monitoring devices in the homes of elderly people who were identified as being particularly at risk.

The Government accepted the Task Force's recommendations and in March 1996 approved the introduction of a Scheme of Community Support for Older People including the provision of £2m to fund security measures.

Administration of the Scheme

The purpose of the scheme is to provide funding for initiatives to improve security and social support for vulnerable older people. Vulnerability is defined in terms of advanced age, disability, isolation (social or otherwise) or having been previously the victim of crime.

The Department's Voluntary Community Services Section has overall responsibility for the scheme. They advise on policy and advertise the scheme nationally. They also agree an overall budget with the Department of Finance and allocate it to the Department's ten regions in proportion to each region's share of the over 65 population as determined by the 1996 census as shown in Table 8.

Table 8 Basis for Allocation to Regions

Region

Population 65 and over

Percentage

Eastern 5

125,271

30

Midland

33,582

8

Mid West

37,480

9

North East

34,812

9

North West

29,395

7

South East

46,590

11

Southern

66,127

16

Western

40,625

10

Total

413,882

100

5 Dublin North, Dublin South and Dublin West

Applications, which are invited annually, are processed in the Department's regional offices where decisions are made as to which groups will be supported and the amount of grant to be given. At the year-end each regional office provides statistics on numbers of applications received, numbers and amounts of grants made and the number of individuals assisted.

Details of the Scheme

The scheme is project based and applications are only accepted through voluntary or community based organizations working with or providing support for vulnerable older people. Grants are not paid to individuals. This approach is intended to encourage the pooling of resources and to emphasise community involvement in protecting the elderly. End beneficiaries must be aged 65 or over, living alone or living in households made up exclusively of older people or of older and other people who are dependent and vulnerable. They must also be unable to install or purchase the necessary equipment themselves to benefit from the scheme. The following projects may be funded

Small scale security work such as strengthening of doors and windows, and the fitting of window and door locks, door chains and security lighting

The once-off cost of installing Socially Monitored Alarm Systems (SMAS). These are systems where an alarm is activated by pressing a button normally held on a pendent around a person's neck. This sends a signal to a monitoring station or to a family member or neighbour. Annual monitoring or maintenance fees for such systems are not covered by the scheme and must be borne by the individual beneficiary.

The scheme does not apply to the provision of conventional intruder alarms.

In general, grants to voluntary organizations should cover 50% of total costs but grants up to 90% may be made. Furthermore, grants must be spent and accounted for within three months of receipt and recipients must provide a list of beneficiaries. Grant recipients must also provide

an Income & Expenditure Account showing clearly the receipt of the Department's grant

receipts and vouchers to the total value of the grant

a statement signed by the Chairperson and Treasurer to the effect that the grant was used for the purposes for which it was made

an auditor's certificate confirming that the terms of the grant were met in respect of grants over £10,000.

Key Statistics

Almost £19m has been expended on the scheme in the five years 1996 to 2000. The Department considers that demand for the scheme may now be levelling out. Table 9 shows that some 82,000 individuals were assisted under the scheme to end 2000 while Table 10 gives details by region of applications and actual expenditure for the year 2000.

Table 9 Total Expenditure on Scheme

Year

Amount £

Groups

Individuals

1996

2,562,680

528

14,944

1997

4,824,159

839

21,783

1998

4,992,631

1,020

21,000

1999

2,963,124

619

12,444

2000

3,175,989

571

12,038

Total

18,518,730

3,577

82,209

Table 10 Expenditure by Region 2000

Region

Total Allocation £

Applications Received

Number of Grants Paid

Amount Approved £

Amount Paid £

Dublin North 6

12

10

69,114

342,194

Dublin South7

1,513,000

27

26

203,831

257,440

Dublin West

30

28

213,407

213,407

Midlands

405,500

63

59

291,706

291,706

Midwest

453,000

72

72

465,297

465,297

North East

420,500

79

77

305,099

305,099

North West

355,000

70

70

297,894

280,344

Southern

799,000

96

84

434,393

434,393

South East

563,000

71

52

151,735

151,735

Western 8

491,000

101

93

409,309

434,374

Total

5,000,000

621

571

2,841,785

3,175,989

6 £273,080 was approved in 1999 and paid in 2000

7 £53, 609 was approved in 1999 and paid in 2000

8 £25,065 was approved in 1999 and paid in 2000

Audit Objective and Scope

The audit objective was to assess the performance of the Department's Voluntary and Community Services Unit and the Department's ten Regional Offices in administering the scheme. The quality of grant decisions and the subsequent steps taken to ensure that grant recipients were complying with all conditions of the scheme were of particular interest. The question of whether or not the scheme was equally accessible to qualifying persons in different parts of the country was also addressed.

Departmental papers such as the minutes of the Advisory Committee for the scheme, a Consultancy Report of April 1999 commissioned by the Department and various statistics on grant payments were reviewed. The Department's procedures and systems for implementing and monitoring the scheme were documented and tested. This latter involved an audit of the central Voluntary and Community Services Unit in Dublin and four of the Department's ten regional offices (Dublin North, Southern, North-Western and Midland). A sample of files for payments in 1999 was examined in these four regions to ascertain if grant recipients had complied fully with the terms and conditions of the grant.

Inspections under powers granted to me under Section 8 of the Comptroller and Auditor General (Amendment) Act, 1993 were carried out in respect of the largest recipients of grants in the North West and Midland regions. These were St Vincent de Paul, Mohill and Helplink South, Athlone.

Audit Findings

Overview

The main strengths of the scheme are the committed voluntary effort of community groups who administer the scheme at local level and the non-bureaucratic approach of the Department. In general, local groups have acted diligently in the discharge of their functions under the scheme and the audit confirmed that funds were properly disbursed.

Targeting of Funding

The scheme was intended to target elderly people who were identified as being particularly at risk - those who are vulnerable in terms of advanced age, disability and isolation whether social or otherwise. However, in practice anyone aged 65 or over who is living alone or in a household made up exclusively of older people, generally benefits from the scheme. The availability of surplus funds arising from underspends across the regions in 1999 and 2000 (as shown in Table 11) may be a contributory factor to the unofficial widening of the scope of the scheme.

Table 11 Percentage of allocation expended by region 1998 - 2000

Region

2000 % Spent

1999 % Spent

1998 % Spent

Eastern

54

26

100

Midlands

72

80

100

Midwest

103

131

100

North East

73

84

100

North West

79

59

99

South East

27

31

100

Southern

54

63

100

Western

88

82

100

Total

64

59

100

Grant Levels

Payments towards the cost of installing security were intended to cover 50% - 90% of total costs, depending on circumstances. In practice, the maximum grant of 90% is invariably paid. Again, this appears to be an unintended effect of the scheme arising from the surplus funds available.

Monitoring Committees

The spread of benefits of the scheme depends to a large extent on the existence of active voluntary and community groups which are willing to participate in the scheme. Partly because of the attendant risk that the scheme would apply unevenly in regions, the National Advisory Committee recommended the establishment of regional monitoring committees to consider how best to achieve coverage in all areas of a region and to assist in assessing grant applications. It was also envisaged that the committees would provide a forum in which practical issues that arise locally could be dealt with. In two of the regions visited on audit, there was no monitoring committee.

Administrative Controls

The Department's administrative controls did not provide reasonable assurance that

eligibility criteria are being correctly applied by groups

grant aided equipment had been installed as claimed

groups apply fair and best value procedures in their choice of suppliers and installers

grants are only paid when groups have properly accounted for prior year grants

expenditure under the scheme was being systematically monitored.

Major Supplier of SMAS

It was estimated in 1999 that approximately 50% of expenditure under the scheme was incurred on the supply and installation of SMAS equipment. During 2000, a Dublin based registered charity emerged as the dominant vehicle for channelling SMAS services to the elderly under the scheme. Applications for £930,162 were received in 2000 through this charity.

By 31 December 2000 £407,981 had been paid in respect of these applications and this figure had increased to £480,464 by 30 May 2001. Table 12 shows changes in the amounts of assistance to the elderly being channelled through this charity in the years 1998-2000 and the growth in such expenditure over time.

Table 12 Claims made by the registered charity 1998 ^ 2000

Region

2000 £

1999 £

1998 £

Dublin North*

449,100

273,080

0

Dublin South

0

0

264,476

Dublin West

0

0

0

Midland

62,154

13,838

7,195

Midwest

34,095

14,147

7,067

North East

70,641

9,862

6,300

North West

45,486

4,312

0

South East

73,081

28,568

14,581

Southern

113,622

5,513

3,028

Western

81,983

3,884

8,200

Total

930,162

353,204

310,847

Total scheme expenditure

3,175,989

2,963,124

4,992,631

% of total expenditure

29

12

6

The following points were noted in respect of the charity concerned.

Audited financial statements, or a certificate from their auditor certifying that grants were spent for the purpose they were given, had not been requested or received by the Department at the time of audit.

Department staff in several regional offices delayed payments to the charity because of defective applications and difficulties in the provision of equipment.

The nature of the scheme is such that ownership of equipment installed vests in the entity through which the grants are paid, in this case the charity in question.

Much of the equipment installed by the charity is subject to an ongoing service charge, which must be paid by or on behalf of the elderly person.

Conclusions

82,209 individuals have availed of the scheme since 1996. The continued success of the scheme depends on it being easily and equally available to all eligible elderly people. The need to continue to operate the scheme on the present scale should be evaluated in the light of substantial underspends in 1999 and 2000.

Clear guidance should be issued by the Department to local groups to ensure that the scheme benefits are directed to those in most need.

The Department should ensure that regional monitoring committees operate in all regions.

The Department should adopt risk assessment techniques to help in drawing up a programme of inspections to test check the books and records of local groups for regularity and compliance with scheme conditions.

The Department should ensure that local groups have arrangements in place for reallocating SMAS equipment as circumstances dictate e.g. in the event of death of a beneficiary.

The Dublin based charity, through which an increasing number of applications are received, advertises its services nationally and, in particular, to tie in with the Department's annual announcement of the scheme in the national press. While the charity's forthright approach helps to publicise the availability of the scheme to the elderly and subsequent take up by using the charity's services, there is a danger that the local voluntary element, which is such a strength of the scheme, will be diminished. The scheme should be reviewed to determine if the effect of this unexpected development is in keeping with the objectives of the scheme.

Given the scale of the charity's involvement, the Department should insist that the principles underlying public procurement are applied to the supply and installation of SMAS equipment by the charity.

Observations of the Accounting Officer

The Accounting Officer states that the Department's regional and local management receive a lot of positive feedback both in regard to the way the scheme is administered and the value which is placed upon it by individual beneficiaries, other statutory agencies (Gardaí, Health Boards, etc.) and the funded organizations themselves.

The Accounting Officer informed me that in his view there had been no unofficial widening of the scheme and that the nature of the scheme and the conditions applying to it have remained constant. The 50% grant level is a specified minimum and, because of the availability of resources, the Department has generally been able to offer grants at a 90% level in recent years.

The scheme and resources required are reviewed each year in the light of feedback on the operation of the scheme and in the context of the overall estimates process and where necessary adjustments are made as appropriate. The issue of providing clearer guidelines to groups will be examined by the Department.

The Accounting Officer informed me that while the regional monitoring committees were, de facto, advisory committees and were particularly useful in setting the scheme in motion they had proved not to be necessary in the ongoing operation of the scheme in a number of areas. The Department has very close links with communities and representative groups through its activities at regional and local level and is satisfied that these contacts enable it to keep in touch with the views and opinions of its customer base and to deal with practical local issues. The Department will keep this matter under review.

With regard to administrative controls the Accounting Officer offered the following observations

As the scheme involves assessing the needs of older people, handling of the scheme requires great sensitivity on the part of the voluntary organizations, particularly in determining whether the individual is in a position to pay for the equipment. The Department is, in general, satisfied that the voluntary organizations apply the criteria for the scheme in a consistent and fair manner having regard the individual circumstances.

In addition to accounting requirements the Department has in place a number of checks to ensure that the scheme is delivering effectively on its objectives. For example, spot checks are carried out in regions to ensure that individuals have received the equipment applied for on their behalf by community organizations. In some instances groups have experienced difficulties in acquiring equipment and having it installed but it was found these issues were being addressed.

Public procurement procedures do not apply to voluntary and community organizations funded under this scheme or other similar schemes. However, groups are advised to observe fair and best value procedures. In addition, groups are advised to contact reputable suppliers and to liaise with local Gardaí as necessary. Where substantial amounts of money are involved groups are advised to seek a number of quotations for the supply of the equipment.

In general grant applications are not processed for groups who have not properly accounted for previous year's grants and groups are so advised. From time to time the Department introduces such additional requirements as are deemed necessary to ensure the effective administration and monitoring of the scheme.

Expenditure under the scheme is monitored at regional level.

The voluntary organizations involved in the scheme are advised by the Department to have arrangements in place to ensure that equipment is reallocated in the event of the original beneficiary no longer requiring it. As such situations inevitably arise on the death or permanent hospitalisation of a beneficiary the situation must be handled sensitively so as not to distress or offend the individuals or families concerned. The Department considers that voluntary organizations, familiar with local situations and individuals are best placed to handle such reallocations and do so in so far as practical.

Applications totalling over £767,000 have been received in the current year from the group supplying SMAS nationally with about half in respect of the Dublin regions. No funding has been allocated to date in respect of these applications.

In the year 2000, applications totalling just under £450,000 were received in the Department's Dublin North region. These have not been processed because of lack of appropriate documentation. Some funding was issued to the group by other regions who were satisfied that the previous grants had been satisfactorily accounted for. However in view of the sizeable amount of money involved and to ensure greater consistency in the allocation of funding for such organizations the Department decided that for the future all moneys nationally must be accounted for before a grant is processed by any of its regional offices.

Audited accounts were requested from the group in question and have recently been received and together with other documentation are currently being examined by the Department. Funding for the current year will be processed when the appropriate documentation has been examined and found in order.

Mr. Purcell

Paragraph 35 records the results of an examination carried out by my staff on the Department's scheme of community support for older people. The scheme involves making grants of up to 90% available to local community groups for supply and installation of small-scale security works to old people of modest means who live alone. I am talking about things like strengthening doors and windows, providing security lighting and, mostly, supplying personal alarm buttons which are usually located in pendants around a person's neck. It does not include burglaralarms.

The work is normally undertaken as a result of contact between the person and the local voluntary or community group, like the local unit or branch of the St. Vincent de Paul Society, for instance. Grants to the voluntary organisations should be spent and accounted for within three months of receipt and the organisations must provide to the Department a list of beneficiaries and receipts and vouchers to the total value of the grant.

Almost £19 million in grants has been issued under the scheme in the five years to the end of 2000. Overall our examination concluded that the scheme was working well and had met the objectives set for it. The committee will see in the report that we suggested ways in which the administration of the scheme might be tightened up and the Department will take these into consideration in its ongoing review of the operation of the scheme.

The committee will also note that a national-based charity has become a major player in recent years for channelling socially monitored alarm system services to the elderly under the scheme. While there is nothing inherently wrong with this development - in fact it may have positive aspects in terms of greater access to the scheme - it poses new management challenges for the Department. I am thinking, in particular, of the retention of the local community element of the scheme, the type of financial administrative controls required in the new environment and, perhaps, a more proactive approach towards guidance in areas such as equipment standards and procurement.

A great deal of good work has been done in installing push button alarms, particularly for old people in isolated areas, although the same applies in urban areas nowadays. However, sometimes local community groups install alarms and bills for £60 or £70 are issued by the monitoring company at the end of the year. Many people are not aware that they are liable for that annual charge, even if the service was not used during the year. What can the Department do to address this issue?

Mr. Sullivan

Under the conditions of the scheme, the monitoring costs are not included. It covers only the installation costs and it is made clear in our leaflets what is covered by the scheme. Other than telling the various local community groups that is the case, and that they should obviously tell the individuals involved, there is very little else we can do.

A number of people have approached me - perhaps because the bills issued lately - saying they received a bill but never knew they were liable for it. They assumed when the push button pendant was installed by the St. Vincent de Paul Society or other local organisation they were getting a service. What is the link between the monitoring company and the Department? Does the company provide the system under contract? How can it charge for a service that is not used?

Mr. Sullivan

The scheme operates through the local groups which identify people who have these security needs. If they have a system like this, a grant is paid for its installation but the scheme does not cover ongoing monitoring charges associated with that.

Is a private company involved? Are its prices fixed? Is the service provided under contract? Could the company increase the monitoring charge to £250 next year for the poor, unfortunate old age pensioner living alone who thinks he has a secure, local press button system?

Mr. Sullivan

We do not have any control over the monitoring charge or anything like that but a number of companies provide this particular service, one of which, in particular, provides it on a nation-wide basis. We have no control over the monitoring charges.

Does the Department follow up on whether the money provided for the scheme is benefiting old people?

Mr. Sullivan

The total amount spent on the scheme was a little more than £3 million in 2000.

Does the Department monitor how the system is working and what benefits it provides? The monitoring company benefits through the annual rental charge.

Mr. Sullivan

This operates through the various regional offices of the Department in conjunction with local voluntary and community groups and the feedback we get is that the scheme is highly valued by the individuals. The reason the scheme was introduced in the first place was the spate of attacks on elderly people living alone a number of years ago and the scheme was intended to try to improve the security of elderly people. It is generally accepted this has worked very well. The number of people benefiting is——

They all say that but people should be informed when the system is installed in the house that it is subject to a charge of £X per year, which the individual will be obliged to pay at the end of the year plus any subsequent increase in the charge.

Mr. Sullivan

That is done but we can make sure the various groups are told about that again.

Who are the people involved in the Dublin-based charity mentioned in the report?

Mr. Sullivan

I am at your disposal here, Chairman. I know who the people are but, given the fact they are mentioned here I do not know whether it would be appropriate for me to mention them in these circumstances. They are a group who have been in contact with us since the publication of the report.

Did the group change hands recently?

Mr. Sullivan

No, the charity has been established for some time and it has been in touch with us recently. We are arranging to meet those involved in relation to some concerns they have but I would prefer not to mention them by name.

Do they derive any benefit from partaking in the scheme?

Mr. Sullivan

My understanding is they do not but there may be some perception around that we need to try to sort out with the group.

The Dublin-based charity received almost £1 million in 2000. The report states:

The Dublin-based charity to which an increasing number of applications are received advertises its services nationally and, in particular, to time with the Department's annual announcement of the scheme in the national press. While the charity's forthright approach helps to publicise the availability of the scheme to the elderly and subsequent take-up by using the charity's services there is a danger that the local voluntary element, which is such a strength of the scheme, will be diminished.

The scheme should be reviewed to determine if the effect of this unexpected development is in keeping with the objectives of the scheme.

I am particularly concerned with the final paragraph. The original intention of the scheme was laudable. There were many break-ins in the homes of elderly people at the time. It was a good scheme which was administered effectively. However, the original scheme was undertaken with significant input from the voluntary sector in communities throughout Ireland. Is community involvement being diminished because one company in Dublin is generating almost £1 million through advertising its services?

Mr. Sullivan

I suppose the basic objective of the scheme is the provision of additional security to individuals on the ground and whether that is happening or not. I think that the group concerned - I am not a spokesperson for them - would argue that they have many contacts with local groups as well but, as I said, these are issues which we need to discuss with them. As I said, they have been in touch with the Department which will be discussing these issues with them. I would go back to the original objective of this, which is, the identification of people who have security needs and the provision of some of these low level security devices in order to protect people who are living on their own. I take the point in general, that this is a different way of delivering the service than what might have been envisaged originally but that is not necessarily a bad thing.

Since it was introduced, more than 89,000 people have had this security service provided.

Mr. Sullivan

Over 80,000 or 82,000.

Are there figures to quantify what still remains to be done? Do you see this aspect of social welfare continuing into the foreseeable future? For how long will it continue?

Mr. Sullivan

There has been no quantification. It would be very difficult to quantify the number of people who might yet need the service. The Government provides money each year for this service, for the take-up of the scheme. The amount of money would clearly depend on what are the needs of people out there, but from year to year these matters are reviewed and the Government provides money. That is the money available to provide for these devices around the country.

Must there be a community watch scheme in existence to allow a group to claim or can an individual in a rural area claim it directly from the Department of Social, Community and Family Affairs if he or she wants to receive the service?

Mr. Sullivan

If there is a community group set up in an area which identifies a number of elderly people living on their own who need additional security, yes, it can apply for the money. That was the idea.

I am thinking in particular of a rural area where there may not be a community alert scheme in place and where, say, an individual over 65 comes to someone and says that he or she lives in an insecure area and would like to get this security system installed. Can such a person apply directly to the Department of Social, Community and Family Affairs office in Limerick, for instance, from which the scheme may be administered?

Mr. Sullivan

No. There is no scope for a direct application by an individual to the Department for moneys. It is channelled through various groups.

Such as the Society of St. Vincent de Paul.

Mr. Sullivan

Exactly.

I take it you will take on board the spirit of the comment, that the community aspect is being diminished if one person is actuallyavailing of one-third of the overall amount spent in 2000.

Mr. Sullivan

I accepted that point. The other side of it is how and whether the service is being delivered to people on the ground and are elderly people living on their own benefiting from it. That, I suppose, is the real issue at the end of the day. I suppose that is really what we are after here. There will be, as there always are with things like this, different ways of delivering it. The way it was set out originally was one way and this has developed. I accepted the point that it needs to be looked at.

From my experience of the scheme since it came into operation, it has been of tremendous benefit to the elderly people in my constituency and, no doubt, throughout the country. However, I must return to the first question I asked about the identity of the groups involved. As the Department advertises it, the scheme is public. I suppose I will have to watch the newspapers for details next January or February or whenever it comes out, but the Department could save me the trouble and tell me who the groups are.

I will leave it to your discretion, Mr. Sullivan. Do you wish to respond? I point out the long-standing parliamentary practice, to which I referred earlier, that one should not comment on a person outside of the House or an official either by name or in such a way as to make him or her identifiable. I know we were through this last week in this committee but we did not have a difficulty then because the correspondence regarding the details of companies concerned was very much in the public media. I would not have seen the advertisement concerning this company and, therefore, I do not know the name of the company at this stage. I will leave the naming of the company to your discretion, Mr. Sullivan.

Mr. Sullivan

Thank you, Chairman. Given that we are in discussions with the group at present, I would rather not be pressed on that matter if that is okay.

Certainly. We said we were deferring paragraph 36. Paragraph 37 concerns carer's allowance. I ask Mr. Purcell to introduce the accounts.

Mr. Purcell

Chairman, I think you said earlier - correct me if I am wrong - that you were taking paragraphs 37 and 38 together.

That is true.

Paragraphs 37 and 38 of the Report of the Comptroller and Auditor General reads:

37. Carers Allowance

Carers Allowance (CA) is a means tested payment for people who provide full time care and attention to a relevant person under the terms of the Social Welfare Acts, i.e. over 16 years of age and who requires full time care and attention or under 16 and requiring full time care and attention and in respect of whom a Domiciliary Care Allowance is being paid by a health board. The person cared for has to be so incapacitated as to require full time care and attention and be likely to require this full time care and attention for at least 12 months.

CA was introduced on 1 November 1990 in place of the Prescribed Relatives Allowance. The scheme provides for a personal allowance to be paid directly to the carer on a means tested basis. It is a payment for carers on low incomes who live with and look after certain people who need full time care and attention. Additional payments are made for any children dependent on the carer but no payment is made in respect of adult dependants. Only one person can be paid a CA in respect of a person requiring full time care and attention. If a person is giving full time care and attention to more than one person the rate of CA is increased by 50%. An allowance is payable where the carer is over 66. Carers can avail of free schemes i.e. free travel, free electricity allowance, free television licence, free telephone rental allowance and fuel allowance. Other benefits (medical card, rent subsidy and exceptional needs payments) are available from the health board subject to means test.

Expenditure on the scheme in 2000 was £78.41m (1999 - £57.41m).

During the audit of the scheme it was noted that the Department has not yet introduced regulations to obtain a contribution from persons being cared for as it is entitled to under the Social Welfare (Consolidation) Act, 1993 which makes provision for such a person to make a contribution towards the support of a carer. No account would be taken of income from any benefit or assistance payment being made by the Department to the person in calculating the contribution.

It was also noted that qualification for the scheme is based on medical and means assessment but the Department's computer system had no record of medical review dates and very few records of means review dates. At the time of audit there were 16,405 cases in payment. An analysis of the CA computer payments file using audit software established that the system does not record a means review date for 15,337 cases and no medical review date.

The scheme has evolved and changed considerably since its introduction. Following a major review of the scheme in 1998 a range of significant improvements have been introduced to the scheme and there has been a notable increase in the number of recipients receiving the allowance. Specifically, the Social Welfare Act 1999 provided for a £75 weekly means disregard of income for a single Carer and £150 per week to the joint income of a married couple. This was further modified in the Social Welfare Act 2001 to increase these disregards from £75 to £125 and from £150 to £250 per week.

In response to my enquiries the Accounting Officer stated that this scheme had exhibited the largest relative growth of any primary income support payment within the Social Welfare system with the number of recipients growing from 8,300 in 1996 to 17,300. Priority has had to be given to claim processing and implementing budget changes.

He informed me that while existing legislative provisions do make provision for a person being cared for to contribute towards that care a review of the scheme concluded that this was not feasible and was against the underlying objective of the scheme. It was considered that the overall numbers and amounts of income involved would not be sufficient to justify the administrative effort and costs involved. This view is confirmed by the experiences of the Health Boards in regard to the provision of home help services. The legislative provision is currently being reviewed.

He also informed me that since the audit additional resources of 10 permanent and 10 temporary staff have been assigned to the CA section. Initially the new staff will be assigned to complete the means review of all existing CA cases in respect of the Social Welfare Act 2001 changes and then a dedicated Control Unit for the scheme will be established.

The Department considers that the non-recording of review dates should be distinguished from the absence of reviews being undertaken. Reviews are completed where the Department becomes aware of changes in the personal circumstances of recipients and some general reviews are undertaken. Currently 3,000 means cases are being reviewed and the Department has other control initiatives planned. The Department recognises the need to review cases systematically and is satisfied that all CA recipients who have means have been adequately reviewed since 1999.

The Department is addressing the issue of the absence of medical review dates. Resource considerations are one reason for the non-recording of medical reviews but the Department believes there are other important factors that merit consideration in the overall context of CA medical reviews. These are

The primary medical conditions are quite restrictive and that the full time care and attention condition is very strictly examined on application and this is shown by the fact that 45% of all CA applications are unsuccessful

Where the care recipient is in receipt of Disability Allowance or Invalidity Pension the medical evidence submitted in claiming entitlement to those schemes is taken into consideration

The majority of care recipients have severe disabilities or long-term illnesses and over 60% are over 60 years of age and the general prognosis and the opinion of the Department's Chief Medical Advisor is that the medical condition will last indefinitely and is not amenable to improvement or rehabilitation

The duration of claims is on average three years

He assured me that since the audit additional measures have been introduced into work processes, whereby a review status is accorded to all new cases where medical or means reviews are required. However, because of the high level of applications being received this will take time to fully implement. Internal procedures have also been revised to facilitate a systematic means review policy, including non-means cases. In response to the audit findings, medical review policy has also been reviewed and the Department has recently begun a process of systematic medical reviewing.

Paragraph 38 of the Report of the Comptroller and Auditor General reads:

38. Disability Allowance

Disability Allowance (DA) is a means tested payment for people with a specified disability whose income falls below certain limits and who are aged between 16 and 66. The rate of payment is the same as the long-term Unemployment Assistance rate with increases paid for qualified adults and child dependants. Recipients of DA are entitled to free travel, are usually entitled to medical cards and may also be entitled to free electricity allowance, free television licence, free telephone rental allowance and fuel allowance.

To qualify a claimant must be substantially handicapped from undertaking suitable employment arising from a medical assessment or examination. The medical condition has to have continued or may reasonably be expected to continue for a period of at least one year and the persons capacity to undertake or carry out work should be substantially less than that of a person without the specified disability.

The scheme was introduced on 2 October 1996 and replaced the Disabled Persons Maintenance Allowance (DPMA) scheme administered by the health boards.

Expenditure on the scheme in 2000 was £219.8m (1999 - £193.0m).

An analysis of the DA computer payments file using audit software revealed that of the 54,126 cases in payment in January 2001 47,513 had nil means of which 18,032 cases had no means review date recorded. Of the 6,613 cases with means 2,306 cases had a lapsed means review date. I was informed on audit that the 18,032 cases were disabled person's maintenance allowance cases taken over from the health boards in 1996 with nil means at that stage and had never been reviewed by the Department.

As compliance with the means limit is one of the core qualifying condition for the payment of DA, I sought the Accounting Officer's views on the adequacy of the Department's means review activities.

In response to my enquiries the Accounting Officer stated that there were some 34,500 persons in receipt of disabled person's maintenance allowance who transferred to DA in 1996. The scheme has exhibited significant growth due to legislative improvements since then and there are now 56,849 persons in receipt of DA. The first priority of the transfer process was to ensure the continued payment of income support without disruption to the recipients concerned and since then the Department has tried to strike a balance between claims processing and control activities, increased maintenance work due to the growth of the scheme and the implementation of various improvements in the scheme.

He informed me that following the transfer of all 34,500 disabled person's maintenance allowance cases to DA the files were reviewed by medical assessors and 80% (27,600 cases) were given a status where no further medical review was required. This status indicates severe disability and the recipients' potential to earn income or amass means is limited. He felt that the risk in not reviewing such cases is not as pronounced as with other social welfare payments.

He added that while review dates have lapsed in 2,306 cases that is not to say they have not been subject to review in other general review activities or in the context of implementing improvements to the scheme.

He considers the current control approach as adequately balanced with reference to all competing demands that include resources, value for money, cost effectiveness, good customer service and the sensitivities in dealing with people with severe disabilities. The activities in any one aspect of control activity must be viewed in the wider context of a whole range of controls that the Department is satisfied are adequate to ensure that the conditions of the scheme are applied. These other control measures include

Rigorous examination of eligibility at the initial claim application stage where 35% of claims received are refused

A dedicated Control Unit within the scheme's administration

All means cases which transferred from the disabled person's maintenance allowance scheme are systematically reviewed as resources and other priorities allow

All new cases are accorded a means review status so that cases can be extracted and reviewed

The implementation of legislative improvements has meant that DA recipients with means have been subject to review quite apart from the systematic review procedures that are normally operated. These review procedures include matching Revenue Commissioners and FÁS computerised details of those starting employment with the DA file, Control Unit activities, investigative staff activities and annual mailshots.

He assured me that as a matter of priority means cases with lapsed review dates will be examined and, where not separately reviewed will be reviewed as soon as possible. With regard to nil means cases without specific review dates some progress has already been made. The number of cases without review dates has been reduced to 17,608 at the end of June 2000 through routine control and review activities. The cases will also continue to form part of the ongoing review of the customer base and review dates will duly be accorded. A review sample of 500 such cases is being immediately undertaken and the outcome will be measured to monitor the results and establish what further refinements are required in the overall review of these cases.

Mr. Purcell

It is convenient to take these paragraphs together because both deal with the need to review the medical conditions and means of persons for whom ongoing claims are in payment where these are key eligibility criteria for the schemes in question. We are talking about carer's allowance and disability allowance.

The basic point of the paragraph is that I was not happy that the Department was carrying out this important review function in a systematic way, particularly in the case of carer's allowance and, to a lesser extent, disability allowance. The committee will see that the Accounting Officer explained that the increase in the scope and take-up of the schemes in recent years meant that the resources had to be applied primarily to claim processing and implementing budget changes and that consequently the extent of regular review of means and medical assessments suffered. Extra resources in the carer's allowance section are being assigned to this work, ultimately leading to the establishment of a dedicated control unit for the scheme. On the disability allowance side, cases with lapsed review dates are being examined and further refinements to the review regime will be introduced as required on the basis of the results of a sample exercise being undertaken by the Department. Therefore, it is fair to say that action is being taken on both of these particular issues.

I note from the top of the page that it is exactly 11 years ago today since the carer's allowance was introduced. The State is still only paying allowances to 17,300 carers when it is estimated conservatively that there are about 70,000 carers providing full-time care and attention to relatives or sick people in their own homes rather than in institutional care.

I would not proceed in the way outlined at the bottom of the page, that initially the new staff - the ten permanent and ten temporary staff have been assigned to the CA section - will be assigned to complete a means review of all existing CA cases. I would not like over-zealous social welfare officers carrying out a witch hunt on the 17,300 carers concerned who do wonderful work in caring for people in their own homes. I know that already they are put through a rigorous test by zealous social welfare officers who visit them on their initial application for carer's allowance. A person who qualifies on medical grounds as a person in need of care certainly needs the attention of the carer and there is no danger whatsoever of the carer's income changing appreciatively or in any way in the meantime. I say that just as an observation.

I want to ask a question, which I have been asking for at least five years, about the position of a carer who becomes a widow but still continues to be a carer. I am not talking about carers in any other circumstances. As soon as such a carer qualifies for the widow's pension, she loses the carer's allowance despite the fact that she continues to care for a person who may be bed-ridden and incontinent in her own home. Now that the disregard has been raised to £125 for a single carer, I cannot see how the Department can declare a person ineligible for the carer's allowance because she qualifies for the widow's pension, which is much less than £125 per week, even if one qualifies according to the assessment of means. Every time I ask that question here or of the Minister or anybody else, I get the same reply, that the Department cannot pay a double social welfare allowance. I am not asking that anybody receive a double social welfare allowance. I am sure there are not ten carers in the country who become widows in any one year. This is a burden on widows.

Chairman, you referred to the dilemma in which widows sometimes find themselves when they must repay unauthorised social welfare claims made by their husbands. When a person becomes a widow and continues to be a full-time carer, she has enough burdens without having her carer's allowance taken away. I will continue to raise this issue until I am satisfied that somebody is looking at it. So far, I have failed to get answers from any official, Minister or otherwise, concerning the simple question of why a carer who becomes a widow loses the carer's allowance when she qualifies for the widow's pension.

Mr. Sullivan

The Deputy has raised this issue before and I can only give the answer that I gave previously. Due to the principles of the Social Welfare Acts, people cannot receive two income maintenance payments. There are overlapping benefit regulations in that regard. The carer's allowance is an income maintenance payment which designed to provide for the income maintenance needs of the carer. The widow's pension is also an income maintenance payment. There are overlapping provisions in the social welfare code. People do not receive two payments. That is current policy.

That is fine. However, I have asked for the regulation that concerns this matter to be changed. In my constituency, there is a person caring for an incontinent relative in her house 24 hours per day, 365 days per year. Her husband suddenly died. She had been getting the carer's allowance because her husband's income at that time was under £75 per week. The requirement is now for income to be under £125. She lost her husband and received the widow's pension. Immediately, the carer's allowance was taken off the lady despite her continuing to be a full-time carer to her husband's incontinent and bed-ridden relative in her home. The widow's pension is only around £89. This is criminal. The guidelines for the carer's allowance means test is £125 per week. This person is not on £125 yet she is denied the carer's allowance. I want a better answer.

This is probably more of a policy issue and more for the parliamentarians. To change a regulation——

If I do not keep mentioning this issue, the policy will never be changed.

I accept what the Deputy says.

I note that the number of carers claiming carer's allowance listed in the C&AG's report has increased from 8,300 in 1996 to 17, 300 in 2000. With the improvements that the Department and Government are bringing in, more and more people will come under the carer's allowance scheme. It is an excellent scheme and one that is being refined year after year. I am sure there will be further refinement in the coming budget.

The C&AG raised various questions, including that related to the means review dates. I would like Mr. Sullivan to comment on the suggestion that there were no specific review dates for means testing. Another question related to the Social Welfare (Consolidation) Act, 1993, and its provision for the Department to obtain a contribution from persons being cared for. That does not seem to be enforced. I presume it is Government policy to enforce that section of the Act. This may be ruled a policy issue by the Chair, but I suggest that the legislation be amended. Perhaps Mr. Sullivan could comment.

Mr. Sullivan

The C&AG highlighted that in the case of all new carer's allowance claims, a means review date is now recorded. Further reviews will now be undertaken. We have acted on that issue. Existing cases are being reviewed to implement recent legislative changes and review dates are being recorded in each case. We have also looked at internal procedures in relation to recording review dates. A unit has been set up to ensure that these are done on a more systematic basis. In all new cases, a medical review status is now included which will determine the eligibility requirements for a future review or medical assessment. In existing cases where review dates were unrecorded, these are being reviewed by our medical advisor.

Is it the policy of the Department to continue to pay pensions and other payments through post offices? Has the Department made plans to do otherwise?

Mr. Sullivan

About 70-75% of our social welfare payments are made through post offices under contract arrangements we have with An Post. We also pay pensions by electronic fund transfer into bank accounts and by standard cheque. Where there is illness, people have the option to have the money paid directly into their bank account if that suits them. The current policy is to continue that arrangement. I am happy to discuss other issues relating to this area but there is no change in policy.

We will move on to the Vote proper. The out-turn of the free schemes was less than estimated. Could Mr. Sullivan give us a break down analysis on the free schemes and the funding for each of them?

Mr. Sullivan

The out-turn of the free travel scheme was £35 million, of the fuel scheme was £35 million, of the free electricity allowance was £17 million, of the television licence allowance was £8.5 million, of the telephone allowance was £17.5 million, of the natural gas allowance was £600,000 and of the bottled gas allowance was £35,000. Those are the main elements.

How many people does the £35 million for the free fuel scheme embrace?

Mr. Sullivan

The average weekly numbers of recipients of the fuel and smokeless fuel allowances for the year 2000 were 269,000 and 109,000 respectively.

The smokeless fuel allowance is set at £5, is that right?

Mr. Sullivan

That is correct.

How long is it since that figure was reviewed?

Mr. Sullivan

It is quite a number of years.

Would I be correct in saying it has not been reviewed since 1990 or does it go back further than that?

Mr. Sullivan

I cannot say off the top of my head; it is perhaps about five or six years since it was reviewed. We tend to look at these things in the context of the general payments which people receive. In fact, what is happening with the fuel allowance scheme applies to the standard rate of pension also.

An article which I read recently - you may have seen it - stated that approximately 2,000 elderly people in Ireland are dying as a result of fuel poverty. The article was written by students from the environmental studies department of UCD who were reflecting on the fact that approximately one in ten people living on their own were probably dying as a result of fuel poverty. We should be doing a great deal more in reflecting the true value of the free fuel scheme. The statistics were rather frightening. In spite of our new-found affluence, approximately 256,000 houses in this country do not have central heating. I am sure the vast majority of those without central heating fall into the category of 269,000 people in receipt of the free fuel scheme. It is pensioners, in particular, who are vulnerable in this situation. I found the statistics in this regard rather shocking. It is an indictment of the times in which we live that approximately 2,000 people are dying as a result of fuel poverty. Many people in the lone parent category are also deeply affected.

We received information on case studies in this regard earlier this week from the Society of the St. Vincent de Paul. We should reflect the real position by giving a proper free fuel allowance and should not be having this type of shocking commentary about Ireland in the year 2001. I do not know if you have any observations in this regard or whether you read the study. The study was undertaken by a Mr. Healy from UCD's department of environmental studies and is well worth reading.

Mr. Sullivan

I am not aware of it.

Entitlement to the free fuel scheme is one of the most difficult areas. One can get free telephone units and an electricity allowance but there are many deterrents in the free fuel scheme which result in many people being ineligible for it. A person is considered ineligible for the free fuel scheme if, in addition to their pension, he-she is in receipt of another pension or income of more than £10 per week. A person of 80 years of age or more seeking the free fuel allowance is also considered ineligible for the free fuel scheme if his or her son or daughter took out an inheritance clause for maintenance etc. In many cases, that is not relevant because people's next-of-kin do not buy fuel for them. I wonder whether it is fair to apply such rigidity to the scheme.

Mr. Sullivan

I am not familiar with the study to which the Chairman refers. The Department may well have received a copy of it and I will endeavour to look at it.

It is important to look at the rate of the old age pension in conjunction with the rate of the fuel allowance. I do not think I should make any more comment than that.

I know, but interestingly enough the figure for the free travel scheme is £35 million as is the figure for the free fuel scheme. Many pensioners cannot avail of the free travel scheme in any event because they live in remote rural locations and would prefer more money for fuel. I know this is more a matter for us as politicians than it is for you. The study I mentioned should be made compulsory reading as it would make us all take another look at how we are treating pensioners.

I do not think there are any more questions. There have been shortfalls and differences in the outturn of consultancy services projected to cost £8 million. You have explained the reasons you spent only £2 million in this area. Perhaps you might tell us about the large consultancy assignment which your Department is embarking on this year?

Mr. Sullivan

You wish to know about our consultancy services for this year?

Yes. Your consultancy projection for the year 2000 was more than £8 million yet you spent less than £2 million.

Mr. Sullivan

Much of that money falls over into this year. One of our consultancy services relates to the Reach project where the Department is trying to build an electronic broker system for Government services generally. This is part of the overall move to electronic Government services. Our Department is working with other Departments to develop a broker service whereby individuals would have all the information they require in one central location. It would then be a question of providing access to the system for other Government agencies. It would, in due course, also touch on some of the issues referred to earlier about the sharing of information. A great deal of work is being done in that area.

We are also setting up a consultancy service in the General Registers Office. This is a joint initiative between ourselves and the Department of Health and Children to try to update the registry office. We will be working on information on births, deaths and marriages which is not contained in computerised format. We are trying to develop systems for that so as to make information available. We are devising this system to help us in processing claims and operating controls and we will then pass the information to Government services.

We are also spending money on consultancy services in relation to the introduction of the euro on 1 January. This project has been ongoing for quite some time. Much work is being done trying to convert our systems to cater for the euro. A number of pensioners have already received pension books containing the euro allowance.

Another major area is the question of how we deliver our services, what we call the service delivery model. We have designed a new service delivery model. This will upgrade all our systems which deal with payments to people. We upgraded our computer systems for short-term payments a number of years ago. We discussed that matter with this committee at that time. Our current system for long-term payments has been in operation for more than ten years and it, too, needs to be upgraded. We took the opportunity to examine how we needed to build our new IT systems to cater for the kind of service we wish to provide. Much work is ongoing in this area. We hope to roll out the first phase next year and to progressively extend it to other areas of the Department so we would have a more modern IT platform to support those services.

I will finish on a positive note by saying that, like other public representatives, many of the queries I receive concern social welfare. The Department is to be complimented on the speedy turn around.

It is important to embody the ethos of customer relations. I am familiar with the case of an individual who was self-employed in England and who wished to work here, but found it difficult to obtain a job. This individual applied for unemployment assistance, but one of the first things he was told was that he should go back to England. I did not think that was very diplomatic or discreet. I accept that sometimes there is an obsession with trying to keep the figures on the live register down, but one must be careful about what one says to people. This individual was fairly perturbed. He is a bachelor who spent most of his life in England and wished to return to work here. One must be cognisant of what one says to such people. However, that is a minor point as I am emphasising the customer aspect. One must show empathy with the other person and consider how he or she would react to such comments. However, in general, the Department operates a good service.

Mr. Sullivan

I would be equally surprised by such a comment being made by a Department official. As I stated before, there has been a significant focus on customer service and improving that service. I use the word "service" purposely as it conveys a certain ethos about the manner in which one deals with people. The example you gave, Chairman, would not be what we would expect from our officials.

I accept that.

Mr. Sullivan

We spend much time and effort in training people at all levels in customer service techniques, in dealing with the public and trying to explain the various options open to people in a complex environment.

This individual might have been told that he was being refused and was not going to get unemployment assistance. In pursuing his case, it may have been put to him that he should have stayed in England.

Mr. Sullivan

That is not an appropriate comment.

We will conclude on paragraphs 35, 37 and 38. We decided to defer paragraph 36 and will not conclude discussion of paragraphs 33 and 34 because members requested additional information which I am sure will be sent to the committee.

Mr. Sullivan

I am sorry I do not have that information.

That is okay. I thank Mr. Sullivan and his officials.

The witnesses withdrew.

The next meeting will take place on 6 November when we will discuss the 2000 Annual Report of the Comptroller and Auditor General and Appropriation Accounts, Department of Public Enterprise - Vote 32.

The committee adjourned at 2.45 p.m. until2 p.m. on Tuesday, 6 November 2001.