Vol. 747 No. 4
6 Deputy Richard Boyd Barrett asked the Minister for Social Protection if she will publish the specific guidelines for accessing the €10 million humanitarian assistance package; and if she will make a statement on the matter. [36282/11]
In recognition of the devastation suffered by many families as a result of the recent floods, the Government decided on 8 November 2011 that it was to provide up to €10 million in income-tested financial support to people who have suffered damage to their homes.
Officials from the Department of Social Protection have made house to house calls to individuals they have identified as being vulnerable at this difficult time and have been in contact with some 700 individuals who have been affected to some degree by the flooding. Special clinics were also established to offer help to affected households. Up to 18 November 2011, 443 individual payments to a value of some €122,000 have been awarded to 310 individuals in the affected areas.
The main details of the humanitarian assistance scheme are as follows. It is to be administered on the ground by staff from the Department of Social Protection. For the most part, these are staff who were formerly community welfare officers working in the HSE who transferred to the Department of Social Protection on 1 October. The scheme will provide hardship alleviation assistance, as opposed to full compensation, to householders affected by the flooding. Damage to a person's home and its basic essential contents, such as carpets, flooring, furniture, household appliances and bedding, will be the main criteria but structural damage may also be considered. Eligibility will be subject to an income test. Assistance will not be given for losses which are covered by insurance. Commercial and business losses will not qualify for humanitarian assistance. Detailed information on the scheme is available on the Department's website at www.welfare.ie.
The Government has also established a cross-departmental and agency working group, chaired by the Department of the Environment, Community and Local Government, to oversee the State's collective response to those affected by the flooding. This working group will identify any gaps that may exist within existing services to address the consequences of the flooding for individuals, families and communities. If additional services are required, the group will report to Government with proposals to address these issues.
Additional information not given on the floor of the House
As the Deputy will be aware a similar allocation of €10 million was made available as a result of the 2009 floods. I expect that my Department will spend in excess of €4 million with a further €16.4 million spent by the local authorities and over €0.5 million by the Department of Agriculture and Food on fodder relief for farmers, making a total spend of over €21 million.
We need to understand the severity of this problem. In a series of locations in my area, namely, Blackrock, Sallynoggin and Stradbrook, and I suspect this is also the case elsewhere in the city and across the country, people have been repeat victims of flooding. It keeps happening in the same places and the consequences of it have been devastating. Flood waters mixed with sewage have washed through people's homes. The insides of their homes have been utterly ruined and walls have been knocked down in some cases. Back garden walls have been washed away and have smashed into houses behind them. People were forced out of their homes and are still out of them because of the damage done and they have to pay for alternative accommodation.
The key point is that this was not a natural disaster. The fact that it has happened repeatedly in the same places points to the fact that it was a man-made disaster arising from the chronic failure to invest in water and drainage infrastructure in those places where it has been known for many years, in some cases decades, that there was a serious problem.
There has also been a failure on the part of planners to insist on proper water and drainage infrastructure when development was taking place, which means more water has been displaced and flooding got worse. All the places that have been flooded indicate that the flooding has got worse. Therefore, there should be no restrictions on the compensation provided for flood victims because it was not their fault.
Thank you, Deputy.
I ask the Minister to remove the application of means-testing to funds under this scheme, to provide an insurance scheme for repeat flood victims who cannot get insurance because of the effect of flooding on their homes——
Deputy, please. The Minister to respond.
——and to ensure the scheme also extends to paying for accommodation costs for people who have been displaced.
I had an opportunity privately to visit a number of areas and families in the Dublin region who suffered from flooding. I am very grateful to the families who let me into their homes which were badly affected by the flooding and, as the Deputy said, in quite a few cases by repeat flooding in parts of Cabra, Tallaght and Donnycarney. Certainly families and individuals have suffered grievously from the floods.
The Deputy should understand that the responsibility of the Department of Social Protection is to provide the humanitarian assistance, which is immediate assistance, and then also to help with buying and replacing appliances such as fridges, freezers and so on.
The Deputy referred to cases where perhaps homes may need to be rebuilt or a family whose house was built on a flood plain may need to be relocated. Following the floods of 2009, with which the Leas-Cheann Comhairle will be very familiar, Galway was very affected as were areas all along the River Shannon basin. Numbers of families have been relocated. It is possible for families to get assistance with accommodation costs if they have to move out of their homes but this must be done on a means-tested basis because of the restricted resources of the Department in regard to accommodation, house replacement or significant rebuilding of structures. I have asked the Government——
I will take a brief question from Deputy Boyd Barrett, as the time allowed for this question is nearly exhausted, and Deputy Ó Snodaigh also wants to ask a question on this matter.
It should be pointed out to the other Departments that are linked into addressing this issue that there needs to be a co-ordinated strategy to deal with all aspects of it in terms of insurance and dealing with the drainage and water infrastructure. With regard to the Minister's brief, I have received many reports of there being great inconsistency in what community welfare officers are willing to give people who call to them. In one place a person will get nothing while in other places the response in terms of humanitarian assistance is quite generous. Therefore, we need these guidelines. A number of community welfare officers contacted by my office stated they had no guidelines. Either they did not know what the guidelines were or there was uncertainty about them. There is a need for clarity and generosity when it comes to dealing with people who are innocent victims of the failure of various authorities to deal with this problem.
Has a request been made for additional moneys to top up the amount the Government has announced? Is it possible for community welfare officers to have a degree of flexibility and discretion when engaging in means tests? I am aware of a family which was €50 above the threshold, but it had bills and debts which were not taken into account. If flexibility was allowed, they could have some furniture in the house.
Community welfare officers were employed by the HSE but are now in the Department of Social Protection. They used to go out and knock on doors in various parts of the city where they were aware of people enduring hardship, particularly older people or those on social welfare. I am sure Deputy Ó Snodaigh knows this and has seen the devastation caused. The devastation I saw was absolutely appalling. The job of community welfare officers is to assist. I, therefore, advise the Deputy to meet the appropriate social welfare officers in the areas about which he is speaking because the guidelines are available on the Department's website and can be interpreted sympathetically by them. However, the matter is subject to a means test for reasons the Deputy understands.
I asked the Government and the Minister for the Environment, Community and Local Government has agreed to establish a special interdepartmental committee to deal with this issue. Following the floods in Galway and the disastrous floods in Cork, money was spent in providing humanitarian relief. Significant amounts were spent on relocating people, while flood relief works were undertaken by the OPW. If it is a recurring problem, there is only one solution. In Dublin, one month's rainfall fell in a couple of hours. These 100 year events seem to be happening more frequently now. It is hoped the interdepartmental committee will produce greater clarity in the actions various agencies take, including in planning.
Who is chairing it?
I will tell the Deputy later. It is a senior official in the Department of the Environment, Community and Local Government.
7 Deputy John McGuinness asked the Minister for Social Protection the total amount of cost savings in anti-fraud measures achieved to date in 2011; the direct impact she anticipates that the cost savings will have on the €700 million in direct reductions in her Department’s budget in 2012; and if she will make a statement on the matter. [36315/11]
23 Deputy Mick Wallace asked the Minister for Social Protection her views on whether it is realistic that she can save more than €600 million tackling welfare fraud in view of the fact that it is impossible to calculate at this stage the volume of fraudulent claims; if it will prove problematic if the savings do not reach the figure suggested; and if she will make a statement on the matter. [36281/11]
34 Deputy Clare Daly asked the Minister for Social Protection if she will explain and justify the claims that €600 million worth of savings can be made by the further elimination of social welfare fraud. [36201/11]
37 Deputy Mick Wallace asked the Minister for Social Protection her views on the notion that she can save more than €600 million by tackling welfare fraud is seriously optimistic and will prove problematic down the road if not achieved; and if she will make a statement on the matter. [36280/11]
I propose to take Questions Nos. 7, 23, 34 and 37 together.
The prevention of fraud and abuse of the social welfare system is an integral part of the day-to-day work of the Department which processes in excess of 2 million claims each year and makes payments to approximately 1.4 million people every week at a cost of approximately €21 billion per annum. However, it is important to recognise that the vast majority of people receive the entitlements due to them.
For 2011, my Department has a target of reviewing 780,000 individual welfare claims and achieving €540 million in control savings. At the end of October, approximately €536 million in estimated control savings were reported and more than 746,000 reviews have been carried out. For 2012, the target for control savings is provisionally set at €625 million, an increase of €85 million on the 2011 target.
Control savings are an estimate of the value of the various control activities across the schemes in payment. Control savings are not actual moneys recovered by the Department, but they are a good indication of the increase in social welfare expenditure that would occur without these control activities taking place. They are, therefore, an estimate of future expenditure avoided. These savings arise as a result of control activity on claims in payment and from inspections of employers. These activities also have deterrent or knock-on effects which are not readily quantifiable in monetary terms. They are used as a performance indicator for year-on-year activities. As control savings are already factored into the budget estimates, the reductions in expenditure that the Department is expected to achieve in the forthcoming budget will come on top of the existing fraud control measures of €625 million.
I recently launched a new fraud initiative which aims to put in place a range of actions to combat fraud and abuse of the social welfare system and ensure public confidence in the integrity of the system is improved. A key priority is to ensure fraudulent activity in the social welfare system is vigorously prevented and combated. Social welfare fraud undermines public confidence in the entire system. Deputies may be aware of the large increase in the volume of social welfare inspections of employers and inspectors' visits to people in receipt of a social welfare income and inspectors examining information supplied to the Department by members of the public.
I am glad to hear the Minister will achieve the target of €540 million which the Department inherited this year. I would like her to kill a myth which has evolved in recent weeks. Last week I heard the Minister of State, Deputy O'Dowd, state that of the €700 million reportedly targeted for savings in the Department, €600 million would be achieved by virtue of anti-fraud measures. Will the Minister clarify for him and others in the Government who may be portraying this view that, first and foremost, the Department has achieved the target of €540 million it inherited this year and that next year a target has been set for the Department of €625 million, which indicates the savings that can be made by the Department in this area against the target figure of €700 million amount to only €85 million? When I say "only," I do not mean to be flippant, as it is a great deal of money when we are speaking about people in great need who depend on all payment rates, let alone primary rates. I do not understand what is meant by "primary" or "secondary" when those dependent on income from the Department of Social Protection value every euro and cent they receive, irrespective of what somebody calls it. Will the Minister clarify that the net saving in respect of the target of €625 million set for next year will be €85 million and that this is the only figure that can be measured against the Department's target figure of €700 million?
Yes, I do wish that some of the statements made about fraud savings could magic away the requirements of the IMF and the troika with regard to social welfare expenditure. All of my predecessors in this portfolio would be delighted if this were to happen.
An example of what happens in most fraud control activity is finding people in a place of employment not registered for PRSI and who are, therefore, working in the black economy. Normally the explanation given is that they have just started work and it is almost impossible to prove otherwise. What happens is that fraud and error detection work prevents future expenditure on a claim which would be deemed inappropriate. These savings are built into the Department's Estimate. However, in recent times I have advocated targeting areas in which there is a good reason or information to suspect there might be fraud or abuse in order to have a targeted and coherent examination, involving visits to employers and multi-agency checkpoints with the Garda, the Revenue Commissioners, the customs service and the taxi regulator, to check that persons involved in various activities and employments are properly registered for PRSI, tax and social welfare contributions. These visits have yielded an interesting number of cases and outcomes involving people who have been claiming benefits to which they have not been entitled, or who have been working in the black economy.
May I reiterate some of the points made by Deputy Cowen? It is misleading because people were under the impression that there was welfare fraud amounting to €600 million. It was disingenuous for some people to suggest that this was the case. There is no doubt that there is welfare fraud but by all accounts it is nothing remotely close to the figure we are talking about. The Minister has probably seen the TASC report by Mr. Michael Taft in which he stated:
It suits a certain agenda which wants to soften up public opinion for social welfare cuts to claim that hundreds of millions have been lost to fraud and cheats. We have had television investigations, newspaper headlines, and attention-seeking politicians all claiming massive fraud. But out of a budget of nearly €20 billion, the Department of Social [welfare] has found only €25 million in fraudulent payments — or about 0.1% of the entire budget.
The figure of €600 million is therefore a bit misleading. Last year, some serious research was undertaken by an independent group in Britain. With a population of 60 million there, welfare fraud was estimated at £1.5 billion. The same research estimated that tax evasion and tax unpaid by tax exiles amounted to £80 billion. Our Government should examine the same scenario.
What the Deputy is saying is well accepted by people, and certainly by myself. Whether the fraud concerns social welfare or tax evasion, both mean that honest businesses and taxpayers must pay for entitlements to which others should be contributing. According to an estimate I have used before, there is approximately a 1% fraud rate in the social welfare system. We do not know, however, because the information on this is quite sketchy. Nonetheless, 1% of €20 billion is €200 million.
There is also an issue of the integrity of the system. Since the recession hit, members of the public have been contacting the Department of Social Protection in large numbers on issues that they are unhappy about. I will cite one example, if time allows. A non-residency project was carried out as one of the ongoing national projects. The special investigation unit focused on individuals who were suspected of not being resident in the State. Nearly 3,000 people had home visits and were interviewed about their claim status. A total of 308 claims were terminated as a result of the special investigations unit, with savings of €3.24 million to the Department. Those savings are important but what is also important is the confidence in the integrity of the system, so that contributors know that the money is going to those who are entitled to the relevant entitlements, such as pensioners and those on disability or invalidity benefit.
There is also a great deal of confusion about our system because people are allowed to work, and it is perfectly legitimate. They may be working part-time and sometimes their neighbours may think that is not permitted when, in fact, the system does permit it.
I am coming at things from a slightly different angle on the same point. If the intention in focusing on fraud is really about reducing the social welfare bill, would it not also be quite important to focus on ridiculous anomalies such as, for example, the case of a young man named Fergus O'Farrell, who is mentioned in a question further down the list? He wants to go on the back to education allowance but is deemed ineligible because he is too young and so is being forced to drop out of college and go back on the dole. Consequently, he will spend nine months longer on the dole, whereas he wants to go to college but cannot get the allowance to do so. Should we not examine such anomalies involving people who want to get back into education so they can be trained and upskilled rather than being dependent on social welfare? The current system is forcing them back onto dependency on social welfare.
Social welfare entitlements are set out in law, upon which the inspectors must make their decisions. The individual to whom the Deputy referred obviously has a particular difficulty. Confidence in the social welfare system is a separate issue to that of fraud. I have had numerous representations concerning difficulties in the taxi industry. That industry used to provide reliable employment for one person or a family. We now have large volumes of people working in the taxi sector where a review is currently going on. The key thing is to ensure that taxi drivers' PRSI numbers are recorded. In addition, when they are working in the taxi industry they must be recorded for tax and PRSI purposes. At the moment, special investigation units are carrying out inquiries throughout the country to ensure that people who are offering taxi services are properly registered for tax and PRSI. It is vital that every other citizen who is paying tax and PRSI has confidence that others are not abusing the system.
Does the Minister agree with the Comptroller and Auditor General when he stated that the current practice of including all overpayments arising from control activity as bankable savings is questionable? He was referring to the sum of €25 million in fraud but that equates to only 0.1% of the total budget. Overpayments from bureaucratic administration or applicants' errors account for €83 million. Does the Minister agree that that combined figure is a lot less than the €600 million she has been quoting?
The biggest problem society faces in this area is the rampant growth of the black economy, which is a big threat to legitimate businesses that are paying tax and have their employees properly recorded. It is important to inform the public about the work that is being done in this regard by my Department's special investigations unit, the Revenue Commissioners and the Garda Síochána. It would be a disaster for the economy if we were paying social welfare to those who are also working in the black economy. They are undermining legitimate businesses and are costing the State money. I accept that there are a lot of errors and misclaims arising from honest mistakes but, nonetheless, it is important to combat social welfare fraud. The last social welfare Bill included extra powers to provide for integrated checkpoints, which have been producing a great deal of additional information, as well as ensuring employers and employees are properly registered.
8 Deputy Mary Lou McDonald asked the Minister for Social Protection her views on the importance of the role played by universal child benefit in tackling child poverty to date; and if she will make a statement on the matter. [36255/11]
Child benefit assists parents with the cost of raising children and it contributes towards alleviating child poverty. Expenditure on child benefit for 2011 is estimated at €2.08 billion in respect of some 1.133 million children. The Government is conscious that child benefit, as a universal payment, can be an important source of income for all families, especially during a time of recession and high unemployment. The social protection system also provides assistance to low income families with children through the payment of qualified child increases on primary social welfare payments and through the family income supplement payment.
In November of last year, the Department published a policy and a value for money review of child income support policies and associated programmes. The review examined the effectiveness and efficiency of child income support payments in meeting policy objectives over the period 1997-2010, including the provision of targeted assistance to families at risk of poverty. The review indicated that child poverty fell, particularly at times when the level of universal support was increased, and that child income support payments, including child benefit, contributed to this reduction. However, the report indicated that better outcomes could be attained through rationalising the current system of child income support payments and selective programmes in particular, in order to provide more consistent assistance to low income families and to encourage parental employment.
The ESRI has also separately assessed the progress on the reduction of child poverty over the period 2004-07 and found that young children under the age of five, children in large households and children in lone parent households experienced substantial declines in their risk of poverty. It is suggested that this pattern of the decline in poverty can be attributed in part to developments in child income support policy, including the increase in child benefit rates over the period.
Additional information not given on the floor of the House
The value for money review noted that the provision of effective and efficient supports to families with children is only one part of an adequate and comprehensive strategy for addressing child poverty. Tackling child poverty is a priority for the Government and a key goal of the National Action Plan for Social Inclusion 2007-2016, NAPinclusion. Factors contributing to childhood poverty include living in lone parent households, labour market inactivity of parents, low parental educational attainment and living in households dependent on income supports.
The broader issue of family and child income supports is currently being examined by the advisory group on tax and social welfare, which I established in June of this year. The group has been tasked with recommending cost-effective solutions as to how employment disincentives can be improved and better poverty outcomes achieved, particularly child poverty outcomes.
We heard comments before the last election and recently in the media about the issue. Does the Minister still agree that child benefit is the sole universal benefit, should be protected as such and should not be reduced? Does she agree that the fairest and simplest method is to give child benefit for every child at the same rate and use the tax system to recoup from wealthy parents? For example, we propose to introduce a third rate of income tax on individuals or a wealth tax.
I have previously advised Deputies that I established an advisory group or commission on tax and social welfare in June this year. The first issue the group has been tasked with is to recommend cost-effective solutions to employment disincentives and achieve better poverty outcomes, particularly child poverty outcomes. As I indicated to the Deputy there has been a number of reports, with one from the Department and one from the ESRI, examining how to retain the core value of universal child benefit. If I may make a gender-based remark, those who want to abolish universal child benefit are generally men, and women are not usually consulted. The payment is generally made to women, who appreciate it. The group will report by the end of next March and I hope we will find a way to retain universality of payment while finding methods of consolidating the other payments relating to children, such as the child dependant allowances and family income support. They must become more coherent.
There have been recent reports on the issue and comments by various members of the Minister's party. There is also a reference in the programme for Government and comments were made by the Tánaiste, Deputy Gilmore, on the occasion of 100 days in office and when Deputy Nulty entered the House after a successful by-election in the Minister's constituency. In light of these, will the Minister confirm that the Labour Party insisted on Fine Gael dropping its demands to reduce the benefit before entering into negotiations for the programme for Government?
Does the Minister agree there should be absolutely no reduction in child benefit, particularly in light of significant increases in the burdens on families by means of electricity and gas charges and reductions in gas and electricity allowances in the home care packages? The figure for children in poverty will increase from approximately 90,000 to 130,000. Research from the European Anti-Poverty Network in Ireland indicates that far from being overly generous, the spend on social welfare here is the third lowest in a group of 15 European countries.
Did the Labour Party give commitments prior to the election about not touching child benefit because it knew it would be wrong to attack the benefit? Does the Minister agree that the only consequence of cutting child benefit would be to increase child poverty and hit the most vulnerable sectors of society? Is it a red herring to speak about a few wealthy people benefitting from the payment when the majority of recipients are working, poor and vulnerable people who need it? If the Minister is to deal with wealth inequalities in our society, she could do so by imposing higher income taxes on the wealthy rather than cutting child benefit.
I stated already that I recognise the value of the universal payment, which is one of the few universal payments in the Irish welfare system. It is particularly valued by those parents providing the care, which is usually the mother, although there are increasing numbers of fathers parenting on a full-time basis. In reforming child benefit we must achieve a targeted system that will utilise a universal payment while regarding other payments, such as child dependant allowances and family income supplement. We must achieve the best of both systems but, importantly, provide a very clear path for parents to be able to be in employment while continuing to receive a level of support.
I acknowledge that some people have indicated they do not require child benefit. They can certainly volunteer to surrender it to the State. People who have held office have done this and I did so during the course of the last Dáil. It is possible to surrender unwanted State payments and salaries to the Minister for Finance. It should be possible for people to surrender the payments if they so wish.
Sin deireadh na ceisteanna.
The Minister did not answer my question.
Written Answers follow Adjournment.
