asked the Minister for Social Welfare whether in view of (i) the ESRI report authored by Mr. Gerald Hughes and published earlier this year, (ii) the report by Dr. Andrew Rynne, published on 16 April 1982 in the Irish Medical Times and (iii) the views expressed by the Federated Union of Employers and the Construction Industry Federtion that the social welfare system was being abused and was in certain cases a major disincentive to work, he considers that steps should be taken to eliminate any such disincentives; if so, the steps, if any, he proposes to take; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Social Welfare System Abuses.
11.
I am aware of the reports referred to and of the views expressed regarding abuse of the social welfare system and the alleged disincentive effects of certain benefits. The disability and unemployment benefit schemes are designed to afford a reasonable degree of income replacement on the occurrence of sickness or unemployment. These necessary social provisions can only operate fully effectively when they are treated in a responsible way by workers, employers and the medical profession alike. I am concerned that the system should not be abused and I have taken a number of positive steps to prevent possible abuse. I believe that the best way to combat abuse is through better management of the system and more effective operation of the controls which the system contains.
I had a meeting recently with representatives of the Federated Union of Employers and the Construction Industry Federation at which views were put forward in relation to these matters. These views, together with the reports referred to by the Deputy, are under examination in my Department with a view to seeing what further action in this area might be appropriate.
The Minister indicated that he proposed to take certain specific steps. What are they? Is the Minister satisfied that there is some truth in the allegations made, particularly in Dr. Rynne's report, because if there is not they should be denied?
Dr. Rynne's allegations were denied on the day by some of the very senior medical people who are quite experienced in the area. So there is a slight difference of opinion even at the medical level. In regard to steps to be taken, I said I had taken some steps and am considering further steps. Some of the steps involved the setting up of a special investigating unit on unemployment benefit. It has been working since a predecessor of mine, the present Taoiseach, set it up in 1978 and we are reviewing the operation of its work to ensure that if it is necessary further staff will be provided in the unit. We have increased the liaison with the National Manpower Service to match vacancies with unemployment benefit claims. That is another aspect of the unemployment benefit.
When I was here previously I increased the medical referees from nine to 15 and I had the intention and the clearance to appoint further medical referees. The effect of that was to reduce disability benefit claims by 4,000 a week consistently over a period. At different times of the year there is a different pattern but the reduction was consistent. Consequently on that basis we are at present appointing a further four medical referees. These have been agreed notwithstanding the embargo and so on because in relation to points made by Dr. Rynne and others the only way to deal with them is through the medical referee system. Employers, various commentators and Dáil Deputies may have views but it is a medical matter as to whether somebody is sick or not and we have found that the medical referee system has worked well and we are increasing that at the moment.
A number of other steps were taken in regard to the three waiting days. There were previously three waiting days for each claim and there are things called link claims which mean that one does not lose three days if one has another claim within 13 weeks. Very positive steps have been taken in terms of good management and trying to improve the management. I am prepared to take steps that are practical in that respect provided it is accepted that it is my duty to provide the beneficiary with the benefits—and Deputies will query me on these anyway if they are not provided in time—and it is the beneficiary's right to have the benefits. As long as that is accepted I am prepared to look at abuses outside that and to take measures that are practical within that context.
The Deputy referred to the report by Gerald Hughes. There is a difference of opinion between Gerald Hughes and Dr. Andrew Rynne. The whole area is one about which we are concerned. I accept the urgency and importance of providing further remedies provided it is accepted that these are benefits and we are looking for abuses rather than trying to affect the normal worker's benefit.
Let me first assure the Minister that I accept the point he makes that nobody is trying to deny someone who is entitled to the benefit. This is the important thing. I am sure the Minister is aware of the heavy burden of PRSI that people are complaining about at present. Would the Minister regard the provision of an additional four referee doctors as sufficient given the recommendation by Dr. Rynne that 50 additional referee doctors be provided, at least for a couple or years to get the situation under control? Are the 15 referee doctors who now exist full-time or part-time? In view of the considerable level of abuse does the Minister consider that, as Dr. Andrew Rynne recommended, as the ESRI recommended and as previous Fianna Fáil Ministers for Finance recommended, consideration should be given to the proposals to tax or allow to be considered for tax, income from short-term social welfare benefits as income from long-term social welfare benefits are subject to tax?
In the first instance I want to be clear that I do not believe that there is the widescale abuse that is suggested by some of the correspondents, including Dr. Rynne. In terms of the increase of four, at the moment that will be adequate and we will keep the matter under review. On the other hand, the ESRI report tentatively estimated that the level of unjustified claims for disability benefit was about 9 per cent. That differs very much from Dr. Rynne's estimate. The ESRI report concluded that the evidence available on the operation of the social certification and referral scheme indicated that the great majority of claimants are genuinely ill and that malingerers can be identified and prevented from getting benefits to which they are not entitled. So I certainly find that report somewhat closer to the actual position. The great majority of claimants are genuinely ill. Many of these make claims which do not recur for a long time. That is what the scheme is about and that is why it is there. It is in that context that the measures should be taken.
On the question of the medical referees generally we have a permanent scheme. In fact, while I was here previously I introduced a proper salary scale, the lack of which was a reason we could not get medical referees.
Are they full-time?
These posts are open to be full-time. I would have to go into each one. There are not always medical people available immediately to fill all those posts on a full-time basis and the whole purpose of getting a full salary scale was that it would then be possible to have people on a full-time basis in full-time posts which are properly remunerated. Because of the historical nature of these posts, some may still be occupied on a part-time basis but the way is clear for the full-time filling of those posts.
Would the Minister agree that in view of the fact that in the years 1976-79 only 46 prosecutions took place against those employees who are alleged to be defrauding the Department of Social Welfare that in relation to the number of people in receipt of social welfare benefits that would indicate that a very tiny percentage of people are involved? Could the Minister also indicate what steps he proposes to take against employers who are defrauding the Department by withholding payments of contributions which they had taken from their employees?
The point the Deputy makes is a fair one. We have had considerable difficulty with employers in relation to the receipt of contributions. That came very much to light with the introduction of PRSI. From January 1981 the governing contribution year was the first year of paying PRSI to the Revenue Commissioners. A substantial number of employers were found not to be making returns. The system, through PRSI, has ensured that there is better liaison and there is some assurance of employers making contributions. I agree that the number prosecuted is very small, relative to the number of workers. Amounts of money can be more substantial than the numbers prosecuted would indicate. For a prosecution there must be a cast iron case with technical evidence and so on. The number of people who return money is much greater. Investigations produce people who receive money they are not entitled to but who have returned it. I agree that the numbers are small. There are other aspects which have a general effect. For instance, if one is on unemployment benefit one may have reimbursements of tax and so on, and this can make it somewhat less attractive to go back to work immediately. That is a problem. The Deputy raised the question of taxation. I was opposed to the taxation procedure put forward. It was against the principle I enunciated earlier that a person has a right to benefit. It meant deducting 20 per cent from the benefit before one got it and then one had to go to the Revenue Commissioners to see if one could claim it back.
The Minister agreed with it in 1980.