I thank the joint committee for affording me the opportunity to appear before it to update it on the current position in processing illness benefit payments. I am joined by my colleagues, Ms Anne Vaughan, deputy secretary, and Mr. Alan Flynn, principal officer in the IT department.
As I said in my note to the clerk to the committee last week, the Department experienced significant difficulties in processing illness benefit payments in recent times. Regrettably, these difficulties have affected our customers in a manner that has correctly been described by a number of individuals, including Members of the Houses, as unacceptable, which we fully accept. This is a matter of great concern to the Department and we are extremely disappointed and deeply embarrassed by our failure to maintain our usual standard of service. Ours is a Department that prioritises making payments above all else. In this case, however, we failed to live up to our own standards and let the people who depend on us down. Although it may be cold comfort to those affected, we sincerely apologise to all of them.
I would like to outline the background to the payment issues and the steps we have taken to restore service levels and ensure, as best we can, the payment issues encountered will not arise again. It might be useful, however, to start with a brief overview of the illness benefit scheme. The scheme is one under which people who are unable to work owing to illness or injury are entitled to receive a weekly payment from the Social Insurance Fund. The basic rate of payment for a single person is €198 per week. Entitlement to the payment, which may be made for a period of up to two years, is contingent on a person's social insurance record. A person must have a minimum of 104 social insurance contributions paid in order to qualify for up to 12 months of payments. Two hundred and sixty contributions are required for the full two-year entitlement. People who exhaust their entitlement to a payment may continue to claim social insurance credits which are reckonable for pension and other purposes throughout the full-two year period. Means-tested increases are paid for adult dependants and children. The number claiming illness benefit is typically in the order of 50,000 to 55,000, depending on the season. We tend to have more claims in the winter and fewer in the summer. Many recipients are not paid directly but mandate payments to be made to their employer. Expenditure on the scheme is in the order of €600 million per annum.
To go into the difficulties we had, we should refer to a systems change we made in August this year. The root of the payment difficulties lies in a process and system change whereby the Department transferred administration of the illness benefit scheme to what it calls its core business objects IT platform on 4 August 2018. The transfer had a number of objectives. The first was moving the illness benefit payments from an old IT platform that is approaching the end of its life to a newer IT platform that is already managing most of the Department's other payments, including analogous payments such as maternity benefit, paternity benefit and treatment benefit. Approximately 1.3 million of the Department's 1.6 million weekly scheme payments are made on this newer platform.
The second objective was to try to realise cost savings by eliminating the need for labour intensive data entry and enabling the re-use of existing customer data already on the business objects platform, thus freeing up staff for assignment to other growing schemes and services. The third objective was facilitating, in due course, the move from a paper system, under which people received medical certificates from their GP and then posted them to the Department, to one under which an e-certificate was transmitted directly from the GP practice computer system to the Department's payment system. The fourth objective was to facilitate, in due course, the move away from weekly certification whereby GPs typically certified illness claims once per week to a system whereby they provided a single certificate covering the entire period of an illness.
Although the system change has worked effectively for about 80% of illness benefit customers, a number of significant difficulties arose following implementation for a number of customers. They included people who were receiving split or broken payments, rather than a single weekly payment for the week, and-or missing or not receiving payments on schedule. Customers also faced significant delays in contacting the Department's helpline. There were a number of inter-related factors that gave rise to these difficulties. On the split payment issue, one of the key changes in the new system was the redesigning of the medical certificates used by GPs. This redesign enabled the forms to be scanned directly into our system, rather than relying on manual data entry. However, notwithstanding that this change had been agreed to with the Irish Medical Organisation, approximately 50% of GP practices initially continued to submit “old” form medical certificates. This created a problem with our data entry which, in turn, led to long delays in claim processing on the new system in early August. To overcome these delays, the Department is implementing an "automatic certification" process to ensure individuals, including those whose GPs were not submitting the correct certificates, are still paid. While this process did ensure customers received their payments, it resulted in approximately 15% of them receiving a split payment in the period from September to November. It is important to note that those who received split payments were not underpaid as a consequence of this approach; the total amount paid, comprising up to three payments in some cases, was in accordance with their entitlements.
During this time and in addition to implementing a temporary process of auto-certification, the Department deployed additional staff to process old form certificates received from GP practices. We worked with the main representative body for GPs to encourage greater use of the new system. This meant that in mid-October we were in a position to cease the auto-certification process and the issue of split payments has since been largely resolved. At this point, approximately 75% of medical certificates being received are in the correct format. This means that we can process the balance of forms, amounting to 25%, on the day they are received.
I wish to refer to missed and late payments. While resolving the split payment issue, the removal of the auto-certification process belatedly exposed some underlying deficiencies in the design and operation of the new illness benefit system. It is not unusual that issues with the operation of a new system will be identified in the weeks immediately following go-live implementation. They would then normally be resolved before too many were affected. However, in this case, because we implemented an auto-certification process, it camouflaged the underlying system issues for a period. By the time the process was ceased in mid-October, over a month of transactions had already been impacted on. As a consequence, in each subsequent week up to last week, payments to approximately 10% of illness benefit recipients had been delayed by a week or more and, in some cases, significantly more.
The main underlying issue identified that had been camouflaged by the auto-certification process under the new system was related to the transition from a payment in arrears approach to a current week payment approach, in other words, from a system under which people were paid their entitlement the week after a period of certification to one under which they were paid during the week of certification. Although this change speeds up initial payment, it leaves very little tolerance for the late receipt of certificates once a claim is in payment.
That is because if a certificate is not received early in the week to which it refers, payment will not reach the customer until the following week at the earliest. Under the payment-in-arrears method, there was, in effect, a seven-day buffer to receive certificates and still get them into payment on a one-payment-a-week schedule. Although a customer will receive the same total payment amount over the course of an illness under both systems of operation, the propensity of the current-week system to create payment gaps is causing significant uncertainty for and distress to customers.
An issue which became apparent once we removed the auto-certification process is that the new system has very tightly defined rules which must be satisfied before a certificate can be accepted and processed for payment. Although the rules are valid in principle, they are leading to payments being delayed for reasons that would not have been applied under the legacy system. For example, if there is a gap of a week or more on the dates between two certificates, the new system will not consider the second certificate as part of a continuing claim and will require a new claim to be submitted. This leads to payments being stopped and referred for examination by an officer of the Department. Those are the two main underlying system issues which in some respects had been hidden by the auto-certification process.
The Department is taking three main steps to resolve these issues. We deployed and are continuing to deploy additional staff to process the tasks and respond to customer inquiries arising from the tight application of scheme rules by the new system. As new staff being deployed to support illness benefit processing need to be trained on the scheme and the IT system, these measures will take some time to deliver full benefit but we are beginning to see the benefit of the additional deployment. We have developed some new IT routines or workarounds that, in effect, build the seven-day buffer present in the former system into the new system and automate the processing of tasks generated by the application of the rules in order to ensure a faster flow-through to payment. We are reviewing the design rules in the system, including the payment in the current week rule, and will modify the system to afford greater flexibility in the processing of claims and certificates.
In addition, the Department continues to engage with the medical profession regarding the implementation of e-certification and single or closed certification. When agreed, these measures will, in time, lead to better customer service. The Department has also allocated additional managers to take responsibility for the programme of work I have set out, including a full-time assistant secretary and additional staff at principal, assistant principal and higher executive officer level.
As a consequence of these measures, customers who are due a payment and whose certificates and claims are in order should now receive their payment entitlement. Payment volumes were restored to normal levels last week and will be monitored on a daily basis to ensure that they remain at that level. Any further issues will be quickly identified and any further remedial action that may be required will be taken.
It is important to note there are always cases, and were always cases under the old system, of customer payments legitimately being stopped or paused. This may occur if medical certificates are incorrectly completed, the certifying GP is not registered on our system, there is an inconsistency between an illness benefit claim and another social welfare claim or routine errors were made in the processing of the certificates. Such issues will always remain and are normally dealt with via our helpline number. Unfortunately, customers are facing difficulties contacting the Department due to the large volume of calls received in recent weeks, as Deputies will be aware. We expect that the measures set out above will reduce the volume of calls and increase our call-handling capacity in the coming weeks. The impact of the measures this week is apparent. We are not quite back to normal in terms of the volume of calls or speed of response but we are far closer to it than we were a week ago.
In addition to the system issues, the Department acknowledges that it did not communicate effectively with customers in advance of the new system coming into operation, act quickly enough to advise and reassure them as to the nature of the split payment issue or respond in a timely and effective manner to the incidents of missed and delayed payments. Although I wrote to all of our illness benefit customers some weeks ago to apologise for the difficulties they were encountering and advise them of other supports available, I accept that communication was too little, too late and of limited comfort to those affected.
Although the Department has previously successfully transferred most of its other schemes and payments onto the business objects platform and the development and testing process for this system followed previous practice, our experience with the illness benefit transfer has been a salutary reminder that the longer-term impact of short-term remedial actions taken with the best intentions when unanticipated issues arise or failures occur must be carefully thought through before implementation. In order to ensure that this and any other lessons from this experience are identified and learned, I have commissioned an independent review of this project to be undertaken by a retired Revenue Commissioner and delivered directly to me and the Minister. It is expected that it will be delivered by the end of the year and its findings will inform our approach to future system and process changes.
As I stated, the Department sincerely regrets and is deeply embarrassed by the difficulties recently encountered by illness benefit customers. We have let some of our customers down and for this we are very sorry.
In mitigation, if there is any, I point to the fact that the Department has a strong record of ensuring customers get paid. This is the first incident of its kind in a long programme of transferring more than 1.6 million weekly payments from old legacy systems to our newer business object system. Throughout this experience we continued to successfully deliver over 99% of these payments on time. We also deployed the community welfare service to help assist customers who faced difficulties arising from the payment issues. Many customers were supported with interim payments through the service. However, I do not wish to in any way diminish or understate the extent of the illness benefit issues. I would like to again apologise to customers, Oireachtas Members and our staff who have been under significant pressure throughout this issue for the difficulties experienced. We have done better in the past and we can do better again. We are determined to do so.
My colleagues and I will be pleased to answer any questions that members may have.
