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Dáil Éireann debate -
Tuesday, 26 Feb 2002

Vol. 549 No. 3

Priority Questions. - Social Welfare Fraud.

Brian Hayes

Question:

32 Mr. B. Hayes asked the Minister for Social, Community and Family Affairs the cost to his Department in social welfare fraud in each of the past four years; the number of persons prosecuted for offences relating to social welfare fraud during this time; and if he will make a statement on the matter. [6434/02]

Fraud against the social welfare system can arise in a number of different ways, for example, where persons claiming social welfare payments make false declarations or conceal material facts to obtain payment, where there is deliberate failure to notify the Department of a change in circumstances or failure by an employer to comply with PRSI regulations.

In 1998, there were 14,193 overpayments amounting to €13.6 million, while in 1999, 15,094 overpayments amounting to €15.4 million and in 2000, 12,625 overpayments amounting to €14.3 million were attributed to fraud or suspected fraud. The figures for 2001 are currently being compiled and will be available by the end of March. My Department has a comprehensive range of measures in place to ensure that fraud is kept to a minimum and that only those who are entitled to a payment actually receive it. All departmental staff who are involved in making payments have a responsibility for the prevention of incorrect payments and the detection of fraud.

There are 600 staff specifically engaged on control activities at local, regional and national level. These officers investigate cases of concurrent working and claiming of social welfare payments, carry out inspections of employers in relation to their PRSI obligations, review customers' means for assistance payments and monitor their ongoing entitlement to social welfare payments. It is my Department's policy to try to recover all moneys incorrectly paid and every effort is made to recover overpayments in full, having regard to the provisions of a code of practice which is in place to regulate this process. Overpayments which result from fraud are given greatest priority and their recovery is vigorously pursued.

Prosecutions are taken against persons who defraud social welfare payments schemes and against employers who fail to honour their obligations under the PRSI system. All cases involving fraud are examined with a view to initiating legal proceedings. This involves striking a balance between the need to vigorously pursue serious fraud, while at the same time having regard to the individual circumstances of each case.

During the period referred to in the question, 1998 to 2001, a total of 1,027 cases were forwarded by my Department to the Chief State Solicitor's office for prosecution. A total of 716 were finalised by the courts and, at the end of 2001, there was a further 471 cases awaiting a hearing in the courts.

Does the Minister agree that social welfare fraud is a problem for his Depart ment and that the figures he gave relating to the years 1998 to 2000 constitute a significant loss for the Department? Does he have an estimate of the figure for last year? There was newspaper speculation earlier this year that €27 million was paid out incorrectly by the Department on the various schemes it operates. Is there a unit in the Department to deal exclusively with social welfare fraud?

Recently, a suggestion was made that those who are convicted of social welfare fraud or who are involved in sponging from the social welfare system should have their names published. A judgment list is issued by the Revenue Commissioners and, in local authorities, those who commit litter fines have their names published. What action is the Department taking to ensure those who are involved in social welfare fraud are made known to the public so this practice can be rooted out of the social welfare system?

I do not have the figures for 2001. They will be available by the end of March. There are 600 staff, out of a total staff complement of 4,200, specifically engaged in control activities, which include fraud. Those staff are at every level – local, regional and national. In relation to publicising cases, the cases are taken by the Office of the Chief State Solicitor and the majority of them come before the courts. There are some changes in the provisions of the Social Welfare Bill, which we will discuss later, in relation to PRSI and other issues. The issue of publicising cases has not come up before but perhaps we could examine it.

The Minister said a total of 716 convictions were secured against people directly involved in this activity. How much of the money involved in each of the years was successfully recovered by the Department as a result of those convictions? Is it the case that the money lost as a result of fraud is lost forever and is not recovered directly by the Department? While the Minister cannot give an exact figure for 2001, can he say if the claim in a recent newspaper report that €27 million was defrauded last year from the social welfare system is way off or close to the mark?

I do not know to what report the Deputy is referring. Perhaps he would bring it to our attention so we can have it checked. I do not have figures other than the figures I gave the Deputy earlier.

The control activity includes fraud but also includes other cases where, for example, people were inadvertently claiming two different social welfare payments at the same time. The total figure for the past number of years has increased from £158 million to £211 million or €268 million. They would be savings which the Department of Finance and my Department would agree. Much of that money would be paid back by social welfare recipients on a drip basis. People who defraud social welfare would, generally, be people who would not be able to repay large sums of money so they tend to repay the amounts at £5 per week or whatever other sum is agreed. That is what occurs in relation to people who are not suspected of fraud. If people are suspected of fraud, the Department will obviously seek full payment in that respect.

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