JOINT COMMITTEE ON SOCIAL AND FAMILY AFFAIRS debate -
Wednesday, 10 Jun 2009

Social Welfare Fraud: Discussion

Chairman

I welcome Mr. Gerard Maloney, assistant secretary, Department of Justice, Equality and Law Reform, Mr. Pat Leahy, assistant principal officer, Department of Finance, Mr. Norman Gillanders, assistant secretary, Office of the Revenue Commissioners, and from the Department of Social and Family Affairs, Ms Niamh O'Donoghue, director general social welfare services, Mr. Eoin O'Broin, director of regions, and Ms Joan McMahon, principal officer, control division.

I ask Ms O'Donoghue to commence the briefing on the level and types of social welfare fraud and the proposal to combat the identified fraud.

Ms Niamh O’Donoghue

On behalf of the Department of Social and Family Affairs, the Department of Justice Equality and Law Reform, the Department of Finance and the Office of the Revenue Commissioners, I thank the Chairman and members for their invitation to appear before the joint committee for a discussion on social welfare fraud.

In this presentation on behalf of the four bodies, I propose to provide the committee with background information on the Department of Social and Family Affairs's control strategy and our integrated approach in implementing it. I will outline the challenges facing the Department from a control perspective and our efforts to deal with them which include a number of cross-departmental initiatives.

To put in context the Department's control activities, it might help to outline the scale of business. The Department makes over 1.2 million payments each week and a further 500,000 on a monthly basis across more than 50 schemes. The Department processes in excess of 2 million claims per year and the budget for social welfare is €21.3 billion in the current year. The Department is very conscious of its obligation to safeguard this money and ensure it is administered in a manner that means the right people get paid the right amount at the right time.

A four-pronged control strategy has been adopted by the Department, namely, prevention of fraud and error at the initial claim stage, early detection through effective review of claims in payment, measures to deter fraud and the pursuit and recovery of overpayments.

Controls are exercised at initial determination of entitlement which is of critical importance in the deterrence of fraud and at subsequent stages during the claim life cycle. They include desk reviews of claim papers, home visits, the issue of certification letters/mail-shots to selected customers, database checking and medical reviews in the case of illness payments.

Key elements of the Department's control strategy include risk assessments, surveys of the levels of fraud and error within schemes, scheme specific review policies, data matching initiatives with both external and internal parties and investigation of anonymous reports. These control tools ensure that review activity is targeted in the most effective manner. In addition, a number of the Department's schemes have moved to a new computing platform which provides enhanced controls of claim management and processing with built-in validation and supports.

In regard to fraud and error surveys, the process involves inspectors reviewing a random sample of claims to assess the underlying levels of fraud and error and action being taken by scheme managers to address the fraud and error risks identified. Fraud and error surveys have been undertaken on the following schemes: 2003, jobseeker's and one-parent family payments; 2004, child benefit and family income supplement scheme; 2005, disability allowance; 2006, PPSN allocation process and the illness benefit scheme; 2007, State pension non-contributory scheme and one parent family payment; and 2008, State pension contributory scheme.

The level and types of fraud and error vary across schemes but customers typically incur fraud in situations such as failing to disclose their full means or increases in means; failing to disclose the true employment or residential status of their spouse, partner or dependants; claiming jobseeker's payments when they are working; absenting themselves or their dependants being absent from the State; and working while claiming to be incapable of work.

Review policies focus control activity on the high risk schemes and on claims that have been identified in fraud and error surveys and risk assessments as having a higher risk of fraud and abuse. In 2007, revised review policies were introduced for the jobseeker and one-parent family schemes. In 2008, the child benefit review policy was agreed. This year review polices have been finalised for disability allowance and carer's allowance. A policy for State pension non-contributory schemes is being finalised.

There has been a major increase in the number of reports of suspected fraudulent activity from members of the public. At the end of May 2009, 2,136 reports were received in control division in Carrick-on-Shannon compared with the end of May 2008 when 299 reports were received, a 714% increase. This figure does not include reports which were made to other areas or offices around the country. However, when investigated, a significant number of the reports do not lead to any savings as in many instances the individuals reported are correctly benefiting from exemptions and disregards under the appropriate schemes.

Data matching is a effective method of identifying high risk claims for review and is an example of good cross-departmental co-operation. Every month commencement of employment data from Revenue is matched against the Department's schemes and investigations are conducted where warranted. Earnings data supplied by the Revenue Commissioners is accessed by staff at both claim application and review stage. This year when the Department supplies Revenue with landlord data relating to rent supplement claims we will also be able to provide landlords' PPSNs.

Other examples of data-matching initiatives include the following. In the case of the Department of Justice, Equality and Law Reform, the Irish Prison Service, the Criminal Injuries Compensation Tribunal and the Courts Service all provide the Department with data for control purposes. The Department of Education and Science provides student data. The Department of Agriculture, Fisheries and Food provides data on grant payments. In the case of the Department of Transport, the Commission for Taxi Regulation provides data on taxi-hackney licences. In the case of the Department of Environment, Heritage and Local Government, the Private Residential Tenancies Board provides information on registered landlords which is matched against the Department's payments systems. Within the Department, the General Register Office provides life-event data on a constant basis.

The Department also has a programme of employer inspections, which are sometimes carried out in co-operation with inspectors of taxes from the Revenue Commissioners and the National Employment Rights Authority. The records of some 3,200 employers were inspected in 2008 to ensure compliance with the Department's regulations and in particular to prevent and detect abuses of the system.

Identity fraud and identity theft are issues with which public bodies are rightly concerned, both in terms of prevention and detection. The Department automatically issues a personal public service number, PPSN, in the case of children born in Ireland. In other cases application must be made in person at one of the Department's network of registration centres and a controlled allocation procedure is followed. There is a dedicated section in the Department, client identity service, CIS, dealing with identity fraud in PPSN allocations. The staff are trained in document fraud detection and the section operates a full-time help-desk facility for front-line staff and provides training and support to them in dealing with document fraud issues. CIS shares document examination expertise and copies of registration documentation with external agencies, in particular the Revenue Commissioners, the Garda, the RSA, local authorities and the Office of the Refugee Applications Commissioner. More recently, we have started to do the same for An Post as a result of the recent initiative that front-office staff must validate social welfare customer identity by requesting photo ID.

There are over 600 staff at local, regional and national level whose work involves some element of control activity. The Department works closely with the Garda National Immigration Bureau and two staff are on secondment to the bureau to assist both agencies in the pursuit of their respective remits, with particular emphasis on welfare fraud and breaches of immigration legislation.

Almost €476 million in social welfare payments was saved through fraud control measures in 2008, an increase of €29 million on the previous year. This year the target is over €600 million. Where overpayments occur the Department seeks to recover them and in cases of serious fraud, the Department will use all legal avenues open to it to recover the money defrauded and seek redress. Criminal prosecutions are taken against persons who defraud the social welfare payments system and employers who fail to carry out their statutory obligations. In 2008, 324 criminal cases were finalised in court, an increase of 86 on the previous year. A total of 354 criminal cases were referred to the Office of the Chief State Solicitor for the initiation of prosecution proceedings.

The activities and measures summarised above have ensured that the Department's control strategy is fully integrated into the administration of schemes. The strategy is monitored and reviewed to ensure it remains effective, and in particular addresses emerging and increasing risks.

The rapidly changing economic environment with large increases in the levels of unemployed poses challenges for the prevention and detection of fraud. The live register grew from some 175,000 in January 2008 to almost 397,000 at the end of May 2009, an increase of more than 125%, and the projected average live register figure for 2009 was raised to 440,000 in the supplementary budget. This unprecedented increase in the live register and in the volume of jobseekers assistance claims has meant that social welfare inspectors have been concentrating on means testing new applicants and have a reduced capacity to undertake reviews.

The Department's response to the challenges we face is a balanced approach that on the one hand, addresses service delivery issues through increased productivity, recruitment and training of staff, the introduction of process improvements and the establishment of back office supports for local offices and on the other hand, ensures control activity is being targeted at high risk categories of claimants. Examples of this targeted approach to control activity in response to emerging threats include the following. The special investigation unit is undertaking more regular interviews of jobseeker recipients. Residency checks are carried out on those in high risk categories and involve a number of home visits. The frequency of the visits is varied so as not to establish a predictable pattern.

Border regions have put an increased emphasis on controls on claims from applicants with a previous address in Northern Ireland. In addition, multi-agency vehicle checkpoints with officers from a range of public service agencies including the Garda Síochána, the Revenue Commissioners, the Department of Social and Family Affairs and local authorities are operational. The lead agency for these checks is the Garda Síochána.

One-parent family recipients with earnings are targeted for review. The frequency of issue of mail shots to validate continued entitlement to child benefit has increased to three monthly for all non-Irish nationals.

New data matches with additional external bodies have been initiated. As a preventative measure, in 2008 the option to receive payments by electronic fund transfer was removed for new claimants for jobseeker payments. They must attend in person at the post office each week thus confirming their continued residency in the country. Their claim is automatically suspended where two consecutive payments are not collected. This year stricter identity checks were introduced in post offices for people collecting social welfare payments.

The Department is committed to ensuring that social welfare payments are available to those who are entitled to them. We are also determined to ensure that abuse of the system is prevented and is dealt with effectively when detected.

Deputy Olwyn Enright

I welcome everyone and thank them for their attendance. Part of what we are doing is looking at the overall issue to see where improvements can be made. I will ask a few specific questions on different areas and then perhaps some more general ones.

On fraud, Ms O'Donoghue stated that the Department will be able to supply the Revenue with landlord data relating to rent supplement claims and to provide the landlords' PPSNs. Under that system, will the Revenue Commissioners be automatically able to see that a landlord, who is the ultimate recipient of the rent supplement, is getting such payment? It will be up to the Revenue to ascertain that the landlord is paying tax on it. When will that system be in place?

There seems to have been a concentration on the issue of cross-Border fraud. Anecdotally, however, I am still hearing of the numbers being quite high in particular post offices. The numbers seem still to be greater than the population of the areas. How satisfied is the Department with what it has done in that area to date? Is there real improvement or is there still more to do? I accept it will not be done overnight.

The same question could be asked of international fraud. We all hear that such a person is flying in and flying out, or whatever, and it is difficult for anyone, for us and possibly for the Department, to verify the accuracy of such allegations. I would be concerned that there are only two staff from the Department of Social and Family Affairs seconded to the Garda National Immigration Bureau. Perhaps Ms O'Donoghue could advise me of the type of work they do. I am conscious that there are millions of people using Dublin Airport alone. I suppose it and Cork Airport would be the two largest airports, but there are other smaller regional airports around the country as well as the ports. Therefore, there is not a social welfare official available in all of those places. How does the system work?

I received complaints from people who work at Dublin Airport to the effect that there are not sufficient social welfare inspectors and that there is not adequate access to the Internet to allow those to whom I refer to carry out background check or verify information with the various international agencies. In addition, I have been informed that an expert on documents and forgeries is not always available. I would be concerned if the latter were the case. I have tabled parliamentary questions on this matter and I take the replies I received as being accurate. However, these replies can be worded in such a way that one is not provided with all the information one requires. Will our guests confirm whether the staff to whom I refer are available on a full-time basis?

Several months ago the Minister for Social and Family Affairs indicated in the Dáil that some members of staff who were dealing with fraud had been transferred to social welfare offices so that the long waiting times for payment might be reduced. Have these members of staff returned to their previous duties? If the indications that €600 million might be saved are correct, surely it must be possible to employ additional staff to deal with the backlog of claims. People with an expertise in tackling fraud should not be charged with reducing waiting times, particularly when one considers that an entirely different skill set is required. If people have an expertise in dealing with fraud, then they should be deployed in the relevant area.

Reference was made to people who claim jobseeker's benefit or allowance or disability benefits when they are working. A certain amount of success can be had by visiting workplaces, building sites, and so on. However, the process in this regard is somewhat hit and miss in nature. It is easy to find those who are working and claiming if they are employed on large building sites but it is not so easy to locate them if they are fixing a tap in someone's kitchen. I have been informed by builders who specialise in one-off house building projects that they cannot compete with those operating in the black economy. These individuals simply cannot pay tax, pay their staff and provide quotations which match those supplied by people who operate in the black economy.

A particular suggestion was put to me recently which I forwarded to the Minister for Finance but which he has yet to take on board. People who apply for mortgages must meet certain criteria. For example, they must ensure that the builder from which they are purchasing their house is covered by HomeBond or whatever. Why is it not possible to have a system under which people might ensure that their builder is paying tax? In a period when we might have far more control over the banking system than is the case at present, people completing mortgage applications should be obliged to indicate that the electrician, plumber or other individual they are employing is registered and is paying tax. This would be one way to keep track of small-scale contractors to ensure that they are registered and paying tax.

With regard to the special investigations unit undertaking interviews, residency checks, and so on, on a more regular basis, I am aware that, from a HSE perspective, the reduction in travel is affecting the movement of home helps and other staff. Have the staff of the special investigations unit been affected or do they continue to travel throughout the country doing their jobs five days a week?

The Department says it will save an additional €124 million by bringing this up to €600 million. Last year, the Department is said to have saved an additional €28 million, but it did not. While it saved an extra €28 million, which was €3 million more than the Minister's extra target in July, the Department did not reach its original target. What specific initiatives for 2009 will allow a saving of an extra €124 million? Will this saving only result from the fact that we are paying out more social welfare money?

Deputy Róisín Shortall

I welcome the members of the delegation and thank them for their presentation. The presentation contains a great deal of information. However, there is other information we did not receive which might prove to be of assistance. Will our guests indicate the level of fraud across the different schemes? Do estimates exist in this regard and what is our guests' experience of established fraud across the various schemes? If such information were available, it would then be possible to target fraud. Will our guests indicate the schemes that are most prone to fraud?

What is international best practice in respect of tackling fraud? What is the position in other European states? How are our guests faring relative to their European counterparts? With more than €21 billion in payments, our guests are faced with a massive undertaking. The Department was obliged to gear up in a short period in recent times to deal with the huge increase in those claiming jobseeker's benefit or allowance.

I do not like to use the term but I presume there is a "standard" level of fraud. Perhaps we could refer to it as an acceptable level but as far as I am concerned, there is no acceptable level. What is the standard across Europe in this regard? How is Ireland performing relative to the standard that obtains in other European countries?

I was interested in the big increase — of some 714% — in the number of anonymous reports of fraud. It was also stated that the vast majority of these reports did not stand up to scrutiny. How many of these reports were valid?

Many of us would favour a move towards the introduction of an electronic funds transfer system, particularly from the point of view of making savings. However, I presume the risk of fraud is far greater when it comes to electronic payments. How is it proposed to proceed in respect of electronic payments? I note what has been done in respect of jobseeker's benefit and allowance. Is it envisaged that other payments will be made available on an electronic basis?

How are one-parent family payments dealt with in circumstances where maintenance payments are also being made? Is this an area of concern? There appears to be lack of a standard approach by the Department to people who are in receipt of maintenance payments. Is there potential for fraud in this area?

A couple of months ago there was much publicity regarding an operation our guests undertook in respect of cross-Border fraud. The figures relating to the rate of fraud appeared to be quite high. When the details relating to the investigation emerged, however, it was discovered that only a small number of cases had been placed under the spotlight. Will our guests indicate their experiences in this regard and outline the extent of the problem of cross-Border fraud? There is obviously great potential for such fraud, particularly in the context of the variation in the rates of payment that apply North and South. How many test cases have been examined?

What is the success rate in recouping overpayments or payments secured as a result of fraud? If we are serious about tackling fraud, is it not the case that we must move to a position where our tax and social welfare systems are integrated? Is it a major problem that two large Departments are not sufficiently integrated because there is a significant potential for fraud and for cases to slip through the cracks? Is progress being made on the integration of the two Departments?

If a proper identification card system was in place, as is the case in most other European states, could much of the fraud be detected? Is there a view within both Departments about the way we should proceed in that regard?

The staff issue was raised. There was a problem in the past 12 months when staff were redeployed from fraud detection to processing claims because of the significant increase in jobseekers' claims. What is an adequate complement of staff to tackle fraud? Is there still a staff shortage? The Department is waiting for staff from other Departments to deal with claims. To what extent is the risk management section short of staff? When will it have a full complement?

Deputy Seymour Crawford

I welcome the delegation to discuss this vital issue, which cannot be ignored. I live in a Border county. Apart from all the other problems in the area, there is always anecdotal evidence of fraud but it is a different matter trying to prove it. Only last week, it emerged up to 30 people were living in one residence for electoral purposes. I hope the same does not apply regarding social welfare claims.

How many people have been caught by the special units in the Border area? There was a great deal of publicity about what happened in Ballyconnell recently. Is it the issue some people make it out to be? A number of years ago, a good friend of mine, who is a builder, spent all day with a social welfare inspector on a site in Dundalk and, eventually, it was established there was a slight difficulty with one of his staff. When he asked the inspector what it was like on the site up the road, which was being run by builders from Northern Ireland, he said there was no point going in there. That has been a problem in the Border area down through the years and we need to be sure people are treated equally because small, legitimate builders are finding it difficult to do business, especially in this area where materials can be purchased north of the Border VAT free or, at worst, with a VAT rate of 15% applied, because a slip of paper can be provided showing a VAT number while workers can be hired who are claiming social welfare as well. These issues need be scrutinised.

I support Deputy Shortall regarding the identification card issue. We need a clear understanding about the people who are claiming social welfare in order that there is no danger of misrepresentation.

Of the 600 staff mentioned in the report, how many deal directly with fraud? Above all civil servants, social welfare officials are the most helpful in working with us as public representatives. However, it is impossible for them to deal with fraud as they deal with such a large number of claimants in social welfare offices. How many are committed to fraud detection? We went through this issue with our Northern Ireland counterparts a number of years ago and they found that by increasing the number of staff dealing with fraud, the savings increased dramatically. If fraud could be prevented, it would be a valuable exercise to dedicate more people to detecting it because the returns would be much greater than anywhere else.

What savings resulted from following up the maintenance issue? Many single mothers do not receive support from the fathers of their children. I am not sure how closely this is examined. When we discussed this with the Northern Ireland authorities, they showed it proved to be much more valuable than they thought it might be.

It is difficult sometimes for people to understand how others are in receipt of social welfare payments. I dealt with the case of a young man recently who is half way through building a house, on which he has a mortgage. He is living in another house but the half built house has been assessed as an income to him because it is a property other than the home in which he lives. When something like this prevents a person from legitimately claiming social welfare payments while others obtain payments fraudulently, it is difficult. I support the activities of the officials involved in fraud detection but I assure them that I will make representations on behalf of people whom I think are hard done by. I do not apologise for that because some people were found to be wrong without genuinely realising they were doing something wrong. However, where people are making fraudulent claims, everybody must stand behind the Department to make sure it is stopped, whether that is in the Border area or elsewhere.

Senator Nicky McFadden

I welcome the officials and I thank them for attending. This is a positive report and I commend them on the amount that has been saved. However, why has it taken so long to request that claimants use photo identification? It is extraordinary, as that is a basic request. I expect the Department will reach its savings target of €600 million this year. The units have saved the taxpayer a significant amount.

Ms O'Donoghue stated, "The frequency of issue of mail shots to validate continued entitlement to child benefit has increased to three-monthly for all non-Irish nationals". During the recent election campaign, that issue was raised many times. Many of my constituents stated people were entitled to claim child benefit when they were not in the country and I was unable to clarify this. Following Ms O'Donoghue's statement, I am still unable to clarify it. What is the position? Electronic payment for new jobseeker claimants is the way forward but, surely, child benefit payments should not be made electronically. Will she clarify whether that is the case? If, for example, circumstances change for a lone parent and she happens to meet the man of her dreams or marry a millionaire, will she be expected to hand back her book, or is that left to the goodwill of the claimant? What system is in place to follow up on such lone parents?

Some people in my area have contacted me about pensioners who have undergone vigorous reviews. The pension area is one in which I would say there is least amount of fraud. Is it necessary to review them so vigorously? They are vulnerable old people and have been quite upset. I have had three or four queries in this regard from just one small area.

Deputy Charlie O’Connor

I wish to be associated with the welcome to all our guests. This is an important meeting and this committee has been anxious to look at the situation. At a time of more pressure than ever on social welfare benefit payments, it is important we encourage as much control as possible and create a situation where more moneys are available for those in need.

In all of our constituencies we will always come across cases where claimants believe they are being put under a little more pressure than necessary. I have encountered many cases in recent times where people have been at least temporarily disqualified because the local office claimed they were not proving they were looking for employment. However, it turned out they were. I am concerned that the Department, in its zest to control these matters, which I support, may forget that genuine and vulnerable people who call to the local office may be caught up in the control mechanisms.

I am interested in the reference in the excellent presentation to the number of reports of suspected fraud from members of the public. The figures are incredible — an increase of over 700%. It was pointed out in the presentation — I presume accurately — that a significant number of those reports were found to have no basis. Is there any way the Department can give the public a message about this kind of busybody activity? I presume the number of reports is so high because people want to wind up neighbours or are upset about progress neighbours are making. Have the Department or other agencies a view on how this can be better controlled? I am sure much staff time and resources are wasted on checking these spurious reports. I accept that all calls must be dealt with, but we would be concerned about this putting even more pressure on staff at a time when they could be dealing with other claims.

Deputies Crawford and Shortall mentioned cross-Border fraud. I do not know much about the Border area; it is a long road from Tallaght, but one hears many myths about fraud, even in urban areas. The issue of cross-Border fraud and difficulties has been raised on other occasions, both in the Dáil and in committee. What progress has been made in that regard? Senator McFadden mentioned foreign claimants and again we hear myths and stories about what happens. I made representation recently to the Department on such an issue after a group of residents in my community came to me to say there were 15 people living in one house — not just at election time — who had suddenly gone to Lanzarote or some place on holidays. We hear about that sort of thing, but must be careful we deal with it in a responsible way. It can be an issue, as we all know from the stories we are told in our constituencies.

Another issue I wish to raise is how we deal with lone parent claims. There has been much talk on this. Somebody asked me some time ago what members of the Department or local authorities were doing hiding in bushes to see what company people had in their houses at 6 a.m. A more reasonable approach must be taken. Does the Department have a view on how it can make progress on this? Mention is often made of our late colleague, Séamus Brennan, who bravely said the matter required review. I share the view of Opposition Members who say there has been no political progress on this. I presume the Department spends resources on pursuing these matters, but wonder if there is a better way to deal with them.

This meeting is an important part of the process and it is important the Departments and agencies understand the importance we attach to this business.

Ms Niamh O’Donoghue

With the committee's indulgence, I will ask my colleague Mr. Gillanders from the Revenue Commissioners to talk about the tax issues while I try to pull together some of the questions on social welfare.

Mr. Norman Gillanders

I will begin by addressing rent supplement payments, to which Deputy Enright referred. We have been getting that information, albeit without the personal public service numbers, PPSNs, for a good number of years and have had some success in doing automated data matching of the rent supplement information with tax records. The addition of the PPSNs is very welcome. We expect to have the 2009 rent supplement reports with PPSNs and will data match them during the course of 2010.

We conducted a fairly detailed analysis of rent supplement payments, which I explained before the Committee of Public Accounts some time ago, where we took a wide sample of rent supplement payments and data matched them with a mixture of manual and automation methods to the tax records. The sample was approximately 220 records and we followed them through to ensure the tax returns we had for those people were compatible with what the rent supplement information showed. What we found was reassuring. We found a compliance level of between 80% and 90% for the samples. This, to my way of thinking, suggests that third party reporting — where we get information from a third party that shows details of a particular income source — is particularly valuable to us.

We then put the rent supplement information into our data intelligence computer system. The matched information is fed into our risk analysis model and it contributes towards a selection of cases for tax audit. The unmatched information is available for searching in our business intelligence computer system. Therefore, auditors, if they have suspicions about a particular name they are auditing, even if we have not been able to match the case of a landlord to the tax record, will be able to look and do a search by name. We have had some success, but we welcome the addition of the PPSN which should increase the matching rate considerably.

Deputy Olwyn Enright

Why has the PPSN only come into play now? What was the delay in getting that information? I appreciate what has been said with regard to the survey. As Mr. Gillanders knows, rent supplement amounts to almost €500 million. If 10% non-compliance is €50 million then 20% would be €100 million. Obviously only the tax proportion of that sum is due but it could still be significant money for the State. Is it the case that once the Department has the PPSN numbers this year that by 2010 or whenever, every single rent supplement payment will be tracked?

Mr. Norman Gillanders

I would not say every single one because life is never like that but we would be hoping for a match rate of approximately 90%. For the ones that do not match it would be well worth doing a manual examination. We are very optimistic. We have been engaged with the Department of Social and Family Affairs on this matter for a number of years. Changes to computer systems are required and like ourselves, I imagine the Department of Social and Family Affairs has a long number of developments in the IT queue and this one has come around after a couple of years' planning. We are just glad to have it. The important point to emphasise is that we have made use of the information even without the PPSNs and the information is out there in the software that is used to assist our auditors in selecting cases for audit. We have issued guidelines to all our audit areas on how to use the rent supplement information to best effect, based on the experiments my own unit in Revenue's planning division carried out last year.

Deputy Róisín Shortall

On that subject, I was just a little surprised at the figures used by Mr. Gillanders. He told the Committee of Public Accounts originally that Revenue could only match 52% of the landlords.

Mr. Norman Gillanders

The original matching rate is usually pushed up a bit by some further rounds of matching. We are matching the 2007 data at the minute and we are hoping to push up the matching rate by improving the techniques used. I mentioned the high percentages in the context of having the PPSNs. There will be no difficulty in matching on PPSNs.

Deputy Charlie O'Connor took the Chair.

Deputy Róisín Shortall

Up to recently the Department of Social and Family Affairs did not have a box on its form for the PPSN and indeed there were problems with its computer system and also political problems in so far as the then Minister, Deputy Martin Cullen, said tax compliance was not his business. He did not regard himself, as the Minister responsible for these huge payments of public money, as having any responsibility for tax compliance. In fairness, the PAC put the skids under people.

The figure Mr. Gillanders quoted is 52%. Has Revenue improved on that figure and what is the current matching rate?

Mr. Norman Gillanders

The original figure of 52% was problematic in that in a significant number of cases rents were paid to a landlord's agent and it was difficult to match the agents to the rent supplement payments. If one excludes those cases which were inherently difficult to match, we had a matching rate of about 60% to 65% after a number of iterations of matching.

Deputy Róisín Shortall

That is not very satisfactory is it?

Mr. Norman Gillanders

It was better than where we started which was with matching rates of about 40%. As I said at the PAC, we use the very latest data matching software. We are not helped by the fact there are no standard postal codes in this country when it comes to this kind of automated data matching.

Deputy Róisín Shortall

Surely Revenue is not helped by the fact the Department of Social and Family Affairs was not looking for the PPSN, which is fairly basic information. I am glad it finally put it on its form. It will be interesting to see what happens next year.

Mr. Norman Gillanders

We will now have the matched information and we will make good use of it. We are glad that the Department of Social and Family Affairs has been able to change its systems to add the number.

Deputy Róisín Shortall

We look forward to progress being made.

Ms Niamh O’Donoghue

Given the number of issues raised I will try to deal with as many as I can together and if I miss out on anything, I will be happy to return to it if any member of the committee wishes. I will also take the opportunity to call on some of my colleagues to address specific issues.

Vice Chairman (Deputy Charlie O’Connor)

The seamless change in the occupancy of the Chair was because my colleague has another appointment so I apologise.

Ms Niamh O’Donoghue

A number of members raised issues about staffing and the diversion of the inspectorate resource away from control measures which is how it is being portrayed. A founding feature of the Department's strategy on control issues is to do with deterrence and prevention. Probably the most effective way of preventing fraud is by not getting people who should not be in payment into payment in the first instance. We have, as a result of the live register increases, had to move or use our inspectorate resources to a greater extent on the assessment or means assessment for jobseeker's assistance claims. Obviously that is not without a control dimension in so far as if somebody is prevented, through inappropriate assessment at the claim application stage, it is in itself a contributor to the prevention of fraud later on down the line.

Members will be aware that there has been an increase in staffing for the Department and indeed we have already increased our inspectorate resources to some extent and there are plans to increase it to a greater extent over the course of the coming months. This will take time for that inspectorate resource to be put in place and to become fully productive because of the training and assimilation that is required, given that the vast majority of staff coming into the Department will not necessarily have a background in social welfare schemes and will require some form of training. Nevertheless, we are confident that with the numbers being put in place we will continue to have a focus in a more targeted way on the control measures which underpin the control strategy of the Department.

A critical point which was touched on in the opening presentation is that control is integrated with scheme administration. While we have central control areas in the Department, the expectation is that control measures and the control of fraud forms part of the activity of a large number of staff, both in terms of initial application and continued assessment. This is extremely important in terms of keeping alive the concept of ensuring we are paying the right people the right amount at the right time and preventing or trying as best we can to prevent a situation where people are getting payments to which they are not entitled. I take the Vice Chairman's comments about the balance that is required between focus on control and entitlement and it is a balance that we have to be very careful to achieve. We try to be as mindful as possible and I know our staff right across the Department try to be mindful of ensuring that balance is appropriately protected.

Deputy Róisín Shortall

With regard to the staff numbers diverted to deal with claims, have those staff been returned into the control unit or is the unit still short of staff?

Ms Niamh O’Donoghue

Mr. Eoin Ó Broin will address that point.

Mr. Eoin Ó Broin

We transferred a very small number of people. They were not exclusively engaged in fraud detection in the first instance as most of them were general inspectors who would have been involved in the means assessment area. The numbers were quite low. I do not have the exact figure but it would certainly have been something under ten. The people involved were transferred for particular periods of time and the longest period was about eight weeks or so but all of those people have been reassigned to their original duties now.

Deputy Róisín Shortall

I take the point made that processing claims involves a big element of fraud detection work being carried out. How many staff are in the control unit?

Ms Niamh O’Donoghue

The control function is spread out and it is not just the central control unit. The control function is spread right across different scheme areas. I mentioned in the presentation that there are about 600 staff whose work involved some element of control activity. About half of that number are specifically assigned full time to control activity, both in terms of the special investigation unit inspectors, the control staff within the specific scheme areas and indeed the support staff from the central units supporting those scheme areas. Approximately half of that is assigned full time to control activity with the special investigation unit inspectors, the control staff within the specific scheme areas and the support staff from the central units supporting those scheme areas. Control activity is not confined to those 300.

The other element touched upon was the impact of cross-Border initiatives taken. I will ask Mr. Ó Broin to expand on that in a few moments. One of the issues of which we are very conscious is the deterrent effect of taking visible action. The very fact that it is known we are mounting certain activities or are very conscious of certain things can lead to deterring people from making claims in the first instance. Regarding the impact or effect, we are not in a position to give the committee an absolute number of claims that have been stopped as a result of specific initiatives. It would be understating the impact of those initiatives to simply talk in those terms. We would also recognise that it has an impact on the number of claims being made in the first instance by virtue of the fact that we are mounting the initiatives and there is visibility and a public profile attached to them.

Deputy Róisín Shortall

Can Ms O'Donoghue give us a sense of the numbers about which she is talking?

Ms Niamh O’Donoghue

I will ask Mr. Ó Broin to talk specifically about that.

We were asked whether there had been any impact as a result of the reduction of travel and subsistence on the activity of our special investigation unit inspectors. There is not. They are fully operational in accordance with the mandate given to them.

A number of committee members asked about the scale of the targets. Obviously they are targets rather than absolutes. They are targets for savings to be achieved and also in terms of the review activity and the various initiatives we take to underpin that. We would be very confident that we will take all sorts of initiatives in addition to continuing activity in order to try to achieve the savings. However, they are targets in themselves. Deputy Enright asked specifically whether new initiatives were planned for this year. Certainly there are a number of different things. The increased certification of eligibility under different schemes is expected to have a distinct impact. In addition we have initiated a number of new data matching requests with different organisations. Again we would expect to have some impact from those data-matching initiatives. Obviously the increased spend in itself increased the scale of activity even if we did not ratchet up activity in any particular area. New initiatives are being planned. We constantly keep our policies under review. We try to take account of what we consider to be emerging areas of fraud and develop new policies to address those. We operate in a very dynamic environment.

Deputy Olwyn Enright

What is the baseline for the level of fraud? Ms O'Donoghue is saying that as social welfare payments increase the Department will detect more fraud. Is she concerned that there are areas we are not yet reaching? Does she believe we are close to the maximum level and that it will just increase or decrease based on increases or decreases in the number of social welfare payments?

Ms Niamh O’Donoghue

I think it is very difficult to give an absolute as to the level of fraud. We were asked whether we had information on benchmarking against international experience. It is very difficult to benchmark. The OECD has tried on a number of different occasions to compare this activity across countries. It has proved very difficult because of the difficulty in getting comparative data to match against international boundaries. In addition there are different institutional arrangements in different countries.

If I may divert slightly into the international dimension, we have a memorandum of understanding with our colleagues in the UK and Northern Ireland which means that we work very closely with them on sharing best practice, developing ideas and helping each other on specific projects. We try to take advantage of emerging ideas or best practice in other jurisdictions. The Department is also closely involved in an exchange of information, experience and expertise with a six-country network that expands beyond the UK to the United States, Canada, Australia and New Zealand. There is a programme of conferences and networking that goes on with a view to taking advantage of whatever is emerging and working in those jurisdictions. We are very alive to reviewing this on a constant basis to ascertain what we can learn from what happens elsewhere and how it can be best applied in the Irish context.

The closest we can get to establishing the level of fraud is through the fraud and error surveys or an analysis of overpayments that are registered. We try to carry out between one and two fraud and error surveys every year. In my opening presentation I indicated when the last such surveys had been carried out on different scheme areas. It is only after the second or third fraud and error survey that we started to try to map the level of activity and the cost arising from that activity in a way that then allows us to identify high risk and targeting that risk with a view to making savings. Notwithstanding all that, obviously those fraud and error surveys have demonstrated that the overall level of fraud in the Department's main schemes is very low. On the evidence we have assembled through those surveys it is less than 1% of expenditure. Obviously that varies across schemes. Deputy Crawford referred to pensioners and the kind of risk attached to payment of pensions versus the risks attached to payment of child benefit or job seeker payments.

We try to keep abreast of the issue through the fraud and error surveys and through analysing how overpayments were created in the first instance. They are not all attributable to fraud. Some of them are attributable to customer or departmental error. However, the levels of fraud are generally quite low, except in one or two particular circumstances. That in itself dictates the Department's targeting approach to addressing high-risk categories.

Deputy Róisín Shortall

What are those one or two?

Ms Niamh O’Donoghue

Regarding one-parent families, cohabitation was mentioned earlier. Some people are working and claiming jobseeker's allowance. For example, in one-parent family payments, the fraud and error survey would have shown a fraud level of approximately 6.5% and that probably would have been one of the highest fraud and error levels across the Department's schemes. That in itself led to policy reviews and a greater risk assessment of that scheme and different approaches that are now being taken to target what were considered to be the risk areas in that regard.

Deputy Róisín Shortall

Does Ms O'Donoghue have a corresponding figure for jobseeker's allowance?

Ms Niamh O’Donoghue

There is a health warning associated with figures for jobseekers in that the fraud and error survey was carried out in 2003. The changes as a result of fraud would have been of the order of 2%. I do not have figures for the expenditure liability resulting from that because this would have been in the very early days of fraud and error surveys.

Reference has been made to the move to electronic payments. The Department's strategy involves moving to a full system of electronic payment. There are two types of electronic payment — EIT payments, which are made through post offices, and EFT payments, which are made through banks or into bank accounts. We have made significant progress with that strategy in the past 18 months. We expect to have a full system of electronic payment by the end of this year. We have worked in consultation with all the customer interest groups. We have targeted a huge information campaign at all the recipients involved.

Senator McFadden raised some issues relating to the book used for the one-parent family scheme. It is obvious that books will no longer be used when the move to a full system of electronic payment has been completed. The new regime will give us a much more immediate ability, when compared to the current reliance on books, to effect changes in circumstance, or to suspend or close down payments. When paper is used as part of the system, one is always catching up with potential cases of fraud. To remove that problem is part of the Department's overall expenditure strategy. Maintenance recovery was mentioned——

Senator Nicky McFadden

While I accept that electronic transfer is helpful, I do not understand the Department's strategy for dealing with some aspects of the new regime. Does it have a system for ensuring that those who do not have to report to departmental officials are honest and good?

Ms Niamh O’Donoghue

Indeed.

Senator Nicky McFadden

I spoke about pensioners in the context of a review that has taken place. I understand that some people were rigorously questioned and intimidated as part of the review. I am glad Ms O'Donoghue has confirmed that the people in question do not constitute a high-risk group. They were targeted in a serious manner, however. It would be much better for the Department to use its resources to focus on areas that present a higher risk.

Ms Niamh O’Donoghue

I would like to make two points in response to that. It is obvious that a detailed control policy applies to one-parent family payments. The policy involves annual reviews and three-yearly reviews. In the past year or so, the Department has been localising the administration of one-parent family payments. Rather than such payments being administered from a centralised scheme area in Sligo, they are now being administered through the local office network. A larger amount of local knowledge, information and intelligence is being fed into the claims assessment system. Senator McFadden asked what would happen in the case of a lucky millionaire, for example. We work with the General Register Office to match our data on births, deaths and marriages. It is obvious that anything like that——

Senator Nicky McFadden

It was a bit of a flippant example.

Ms Niamh O’Donoghue

I will address the specific question. The system of data matching that is used lets us know when action is needed. Similarly, the information given to us by the Revenue Commissioners when people commence employment allows us to initiate earnings reviews. As we develop our systems, we will have a specific focus on those areas we deem to present a high risk. Our activity will be targeted on such areas over the course of the year. I apologise to Senator McFadden for suggesting that the issue of pensioners, which she raised, had been raised by Deputy Crawford. The objective of the Department is to deal with pensioners in a sensitive manner. I appreciate that it is regrettable if there have been instances in which pensioners have not been treated in such a manner. It is obvious that means-assessed and assistance-based payments, in particular, are subject to certain conditions. We are obliged to consider them and to reassure ourselves in respect of them as much as we can. I take the point that we should engage with the older members of the community in a sensitive manner.

Deputy Seymour Crawford

I would like to give Ms O'Donoghue an example of a specific case. I have already mentioned it on the record of the House. I refer to a case in which an inspector could not understand how an old age pensioner who had returned from England five years previously was able to survive on the pension he was receiving. The inspector decided that the person in question must have been doing something else. When the inspector asked the man how he feeds himself, the man said he sometimes goes up to his brother's farm to work, and might get his dinner there. When the review of the man's circumstances was completed, the man learned that the inspector had decided he was getting €100 a week from his brother for working on the farm and that his dinner was classified as being worth €50 a week. As a result, he was not entitled to any social welfare benefit. When I visited the farm in question, I noted that the wife of the man's brother was an invalid and was not fit to cook any dinner or anything else. I also learned that the man's brother was giving him nothing. As far as I am concerned, the inspector's approach was totally over the top and cannot be justified.

Ms Niamh O’Donoghue

If the Deputy wants to give us specific details of any case, obviously we will be happy to examine it.

Deputy Seymour Crawford

I have a written a number of letters on the matter.

Ms Niamh O’Donoghue

I appreciate that a certain amount of sensitivity should apply in such a case.

I would like to comment on one or two other specific issues that were raised, including maintenance recovery. I assure the committee that when one-parent family payment is awarded, the Department's centralised maintenance recovery unit immediately starts to identify the other parent or liable relative to ascertain whether he or she is in a position to contribute maintenance. That happens in every case. The committee will appreciate that in many cases, it is not easy to trace the liable relative having identified him or her. If he or she can be traced, the unit considers whether maintenance can be recovered from him or her. In many cases, difficulties arise when the liable relative who is identified is a social welfare recipient, or has an income below a certain level. In such cases, it is impossible for us to recover maintenance. This work is ongoing. A great deal of activity is taking place. The activity of the centralised maintenance recovery unit contributes to the meeting of the Department's overall savings targets. When the unit contacts liable relatives, it sometimes discovers that maintenance payments are being made without the knowledge of the Department. That can be taken into account when decisions are being made on the level of payment that should be made to one-parent family recipients. If it is discovered that the liable relative is working and is in a position to make a contribution, we try to make sure a payment is made to the claim recipient or directly to the Department. There is an active policy in that area.

Deputy Shortall asked specifically about the amount of money that is recovered on foot of instances of over-payment. I can confirm that in 2008, over-payments of approximately €54.5 million were identified. Approximately €26.9 million in over-payments was recovered in that year. Some of the over-payments that were recovered were made in previous years. It is not a direct comparison. Obviously, all of that is subject to verification by the Comptroller and Auditor General in his audit. I can confirm to the committee that the figures in question are in that order. We seek to recover payments in various ways, for example by means of deduction from social welfare payments. If the claimant has passed away, we can take a case against his or her estate. It is also possible to provide for instalment arrangements. We can recover moneys from people who are no longer in receipt of social welfare. We pursue them as well. Our ability to recover moneys is limited by the Social Welfare Acts, which provide that a person's income cannot be reduced below the level of the supplementary welfare allowance without the expressed permission of that person. If such permission is not obtained, the period over which we recover over-payments can be very prolonged. I think I have covered most of the issues that have been raised. I ask my colleague, Mr. Ó Broin, to speak specifically about cross-Border fraud.

Vice Chairman

That is fine. If the members of the committee want to rebut anything that has been said, they will be free to do so.

Deputy Olwyn Enright

Perhaps Mr. Ó Broin can explain what is meant by his title, "director of regions".

Mr. Eoin Ó Broin

I manage the Department's regions, which are responsible for all the local offices and branches and all the outdoor staff. In terms of cross-Border fraud, we identified this as something of an emerging problem at the end of last year and early this year. In response, we put in place a comprehensive series of new procedures. In the case of applicants for jobseeker's allowance and one-parent family payment, this involves a home visit in each and every case. As part of the home visit, we complete a detailed questionnaire which covers a range of areas aimed at confirming residence.

I was asked whether the Department is satisfied with the actions that have been taken. While we regard the new procedures as adequately addressing the problem we identified, as in all areas of our control activity, the matter is kept under ongoing review. As part of the activity to address the problem we also participated in multi-agency vehicle checks with the Garda and Customs and Excise. For example, so far this year we have participated in 64 such checks throughout the country and interviewed 2,304 people.

Deputy Róisín Shortall

Is Mr. Ó Broin referring to vehicle checks?

Mr. Eoin Ó Broin

Yes.

Deputy Róisín Shortall

Were 64 such checks carried out throughout the country?

Mr. Eoin Ó Broin

Yes.

Deputy Róisín Shortall

Were most of them in the Border region?

Mr. Eoin Ó Broin

No, they are spread throughout the country.

Deputy Róisín Shortall

How many of them were in the Border region?

Mr. Eoin Ó Broin

Six were in the north west and nine in the north east.

Deputy Róisín Shortall

The Minister received a great deal of publicity for 15 checks.

Mr. Eoin Ó Broin

We interviewed 2,304 people and followed up in 212 cases. From this group, we identified 33 people who were working and signing, generating a saving of €230,000. One of the key features of checkpoints is the high visibility they give our people on the ground.

To give an example in terms of the cross-Border issue, as part of the particular focus we have placed on non-residents, so far this year some 94 applications for jobseeker's allowance have been investigated by the special investigation unit. I emphasise that these cases were targeted. Of the 94 applications investigated, 79 have been disallowed, five have signed off and only ten are in receipt of payment. The key emphasis is on trying to address problems at the stage at which claims are made.

Deputy Róisín Shortall

To clarify the issue of cross-Border fraud, about which we heard a great deal, is it correct that six vehicles were stopped in one operation and nine vehicles in another?

Mr. Eoin Ó Broin

No, we had six checkpoints in the north west region with the Garda and a further nine in the north east.

Deputy Róisín Shortall

How many people did officials see in the six operations?

Mr. Eoin Ó Broin

We interviewed 169 people in the north west where six checkpoints were held and 194 in the north east where nine checkpoints were carried out.

Deputy Róisín Shortall

Does Mr. Ó Broin have information on the outcomes of the interviews?

Mr. Eoin Ó Broin

Of the 169 people in question, we identified 106 cases for follow-up action.

Deputy Róisín Shortall

What was the outcome of this action?

Mr. Eoin Ó Broin

While the outcomes are ongoing, in four of the cases we identified people were working and signing.

Deputy Róisín Shortall

Four out of 363 cases.

Mr. Eoin Ó Broin

Yes.

Deputy Róisín Shortall

Is that not an exceptionally low figure?

Mr. Eoin Ó Broin

We do not organise the checkpoints. They are organised by the Garda traffic corps and we have been asked to participate in them. While there are certain benefits from checkpoints, the main benefit noted by our officials on the ground is that they generate high visibility. We have succeeded in having the checkpoints coincide with the signing day at certain local offices and they have been particularly effective in tackling cross-Border fraud.

Deputy Róisín Shortall

If four cases of people simultaneously signing on and working were detected among 363 people stopped around the Border, it appears to indicate the level of fraud is not an issue.

Mr. Eoin Ó Broin

The particular type of fraud detected through the checkpoints — people working and signing for jobseeker's payment — is just one element of fraud. Our primary concern earlier this year in terms of cross-Border fraud was not people working and signing but people from Northern Ireland purporting to be resident here.

Deputy Róisín Shortall

How many such cases were detected?

Mr. Eoin Ó Broin

I gave an example from the north-west region. In focusing on non-residents we targeted 94 applications for jobseeker's allowance, of which 79 have been disallowed and only ten are still in payment.

Deputy Róisín Shortall

The outcome to which Mr. Ó Broin refers was achieved through stricter processing of claims rather than high visibility road checks.

Mr. Eoin Ó Broin

Yes.

Deputy Róisín Shortall

That is not the impression members of the public were given from media publicity surrounding the Minister.

Ms Niamh O’Donoghue

We are trying to achieve a combined effect. The activity of the special investigations unit to which Mr. Ó Broin referred was targeted at what was perceived to be a high risk area. This was coupled with the deterrence and prevention effect of engaging in multi-agency vehicle checkpoints.

Deputy Olwyn Enright

Has the Department discussed this issue with the postmasters in charge of post offices in the Border region, given that they will know who lives in their area? While the information available to them may not be sufficient to take court action, it would be sufficient to commence an investigation. I have received information from this source.

Many robberies have taken place in some areas on account of the large sums of money being delivered to post offices. The sums involved are substantial compared to the number of people genuinely living in the areas in question. Postmasters would be a good source of information because they know whether the people collecting payments are in their towns and villages during the rest of the week. What kind of liaison takes place between the Department and postmasters who see claimants face to face?

Mr. Eoin Ó Broin

We have certain contacts with post offices. I expect that postmasters who had concerns about people they are paying would bring the matter to the attention of the Department.

Deputy Olwyn Enright

While I share Mr. Ó Broin's confidence in that respect, the Department must make postmasters aware of its genuine concerns in this matter and ask them about it. Postmasters are busy when payments are being made on account of the large queues one has at present for unemployment payments. The Department has an ideal opportunity to have staff visit post offices and check those collecting payments rather than carry out checks at Garda checkpoints.

Mr. Eoin Ó Broin

We will examine the point raised by the Deputy.

Deputy Róisín Shortall

I seek further information on the example Mr. Ó Broin provided of 94 applications being investigated of which 79 were disallowed. Were these checked in a specific area?

Mr. Eoin Ó Broin

Yes, it was in the northern part of south Donegal.

Deputy Róisín Shortall

For what were the claims made?

Mr. Eoin Ó Broin

They were for jobseeker's allowance?

Deputy Róisín Shortall

Over what period were they made?

Mr. Eoin Ó Broin

I am not certain of the period but I understand it was since the beginning of this year.

Deputy Róisín Shortall

Were they regarded as high risk cases or selected at random?

Mr. Eoin Ó Broin

They would have been classified as high risk. They would have been cases about which our general staff would have had certain concerns. Hence, they were referred to the special investigation unit, SIU. It would have been unusual to involve the SIU in cases at claim stage, but because of the emerging problem we identified, we saw a certain value in it.

Deputy Róisín Shortall

Has the Department carried out any spot checks in that area? Mr. Ó Broin said 79 claims out of 94 were disallowed, but they were 94 cases that had been identified as being potentially fraudulent. Has the Department carried out any spot checks in the North, apart from the road checks?

Mr. Eoin Ó Broin

What we have done is to put very stringent procedures in place. As I indicated, all claims for jobseeker's allowance in the Border areas are now subject to an un-notified home visit. As part of that home visit we complete a detailed questionnaire that covers a range of areas aimed at ensuring the person is resident in the State.

Deputy Róisín Shortall

What kind of figures are emerging from that?

Mr. Eoin Ó Broin

I do not have the specific figures because the procedures are applied to every single claim.

Deputy Róisín Shortall

Would it not be helpful if we did know?

Mr. Eoin Ó Broin

I just do not have the specific figures.

Deputy Róisín Shortall

Would it be possible for Mr. Ó Broin to get the figures and to send them to the committee because they might be significant if every claim is being checked?

Mr. Eoin Ó Broin

I will check what information is available and we will send it to the committee.

Deputy Róisín Shortall

Okay. I thank Mr. Ó Broin.

Senator Nicky McFadden

The position on child benefit fraud and people who leave the country was not clarified. That is a big issue. When payments are electronic, in particular, people can continue to get them. I accept there is a three-month timeframe but how does the Department know when to stop payments?

Ms Niamh O’Donoghue

I apologise to Senator McFadden, as she had raised the issue of certification and how it worked and I meant to deal with that.

Senator Nicky McFadden

That is okay.

Ms Niamh O’Donoghue

Two forms of certification are issued for child benefit. One is employment certification, which relates specifically to European Union nationals who are working in Ireland but who are claiming child benefit in respect of children who are resident abroad. There is a residency certification process for non-Irish nationals, both EU and non-EU, who are resident in Ireland with their children and who are claiming child benefit. In both cases that certification process is now operating on a three-monthly basis.

The process in place requires the individual to complete a certificate or to provide further evidence, depending on whether it is employment or residence, and to submit that to the Department within 21 days. If the certificate is not submitted within that timeframe the payment is suspended and the matter is investigated further. The processing is automatic. Proofs are required, whether it be certification by the school the children are attending, or by a doctor or other person to back up the certification process.

Child benefit is paid to a significant number of people and the number of non-residents or non-Irish nationals who are claiming it is a small proportion of those people. We have to balance customer service with appropriate control.

Deputy Róisín Shortall

What figures are emerging from the controls?

Ms Niamh O’Donoghue

Significant savings were realised in 2008. Through the certification process, payments to a total of 3,197 non-Irish claimants and 700 others were terminated. In addition——

Deputy Róisín Shortall

Out of what total?

Ms Niamh O’Donoghue

In total, there are approximately 6,610 non-Irish nationals claiming in respect of approximately 11,000 non-resident children.

Senator Nicky McFadden

Could we be issued with those figures? That would be very helpful.

Ms Niamh O’Donoghue

Yes, certainly. We can provide information on that exercise and the outcome of it to the committee.

Deputy Róisín Shortall

I did not get the point about the outcome. How many claims were made and how many were disallowed?

Ms Niamh O’Donoghue

I beg Deputy Shortall's pardon. To clarify, in 2008 we issued approximately 70,000 residency certificates and approximately 11,000 employment certificates. Approximately 8,000 claims were suspended on foot of that exercise and approximately 5,000 were subsequently stopped.

Deputy Róisín Shortall

Is that 5,000 out of 81,000?

Ms Niamh O’Donoghue

Yes.

Senator Nicky McFadden

Could Ms O'Donoghue inform me why photographic ID was not always used?

Ms Niamh O’Donoghue

The Department follows Government policy on the proofs of identity that are required. It is part of the Department's evolving strategy to move to a photographic ID process. That process is under way. We register people and the identity proofs we require are up to what are considered to be level two authentication, so there is scope for us to include a photograph within that. We are moving in that direction.

Deputy Róisín Shortall

I have a question on the integration of the tax and social welfare systems. Has any progress been made on that? Would that not be the real solution? What is the view of both Departments on having photographic ID cards?

Ms Niamh O’Donoghue

It is our intention to move to a photograph-based public service card.

Deputy Róisín Shortall

What timescale is envisaged for that?

Ms Niamh O’Donoghue

A process is under way. Because the system will be extended to all welfare recipients, it will take time.

Deputy Róisín Shortall

I am talking about a national ID card.

Ms Niamh O’Donoghue

It is a matter of Government policy whether there is a national ID card. In terms of moving to the next generation of social services card, it is the Department's policy to move to a public service card that will contain a photographic ID.

Deputy Róisín Shortall

Is that a card that could become a national ID card?

Ms Niamh O’Donoghue

It is certainly the intention to make that card capable of interacting with other public service organisations. Any scope beyond that would be a matter for the Government.

Deputy Róisín Shortall

Has there been progress on the integration of the two systems?

Mr. Norman Gillanders

I suppose integration means many things to various people. From the point of view of managing the risks involved in taxation and social welfare policy, the key thing is that data can move freely between our computer systems and be easily matched within them. We have an extensive programme of data sharing and data matching. It is one of the best ways we have of mitigating the risks inherent in the system. The two Departments carry out regular sharing exercises of significant data on a daily, monthly and annual basis. The information goes both ways and is matched for control and audit purposes. To that extent, modern computer systems are sufficiently open to enable those big data exchanges to take place routinely. The larger issues——

Deputy Róisín Shortall

Modern IT systems may have the potential but it is not happening.

Mr. Norman Gillanders

It does happen. We have daily——

Deputy Róisín Shortall

It did not happen for rent supplement.

Mr. Norman Gillanders

Deputy Shortall is focusing on one area, but routine information is exchanged daily without any technical or administrative obstacles on cases passing from work to welfare and welfare to work, who is paying what in terms of PRSI and new entrants to the tax system. It all takes place under statute. This is one area where I am perfectly happy to say the arrangements work well.

Deputy Róisín Shortall

Apart from the computer systems, the payment systems are certainly not integrated in respect of cohabiting couples, unmarried couples or unmarried parents who are not cohabiting. There are two entirely different systems. This committee is considering the disincentives to parents living together or getting married because of the entirely different ways in which the social welfare system and the Revenue Commissioners treat cohabiting couples.

Mr. Norman Gillanders

That is a larger issue. Those distinctions reflect what I call legacy policy decisions——

Deputy Róisín Shortall

Perhaps that is why there is such a high level of fraud associated with the one-parent family payment.

Mr. Norman Gillanders

Part of the method of dealing with some of those problems, which do exist, is to share information and conduct joint investigations on a much larger scale. The Office of the Revenue Commissioners has increased its joint investigation unit staff to a complement of 32 and it works daily with the Department of Social and Family Affairs on appropriate investigations.

Deputy Róisín Shortall

What I am saying is that it might be more family friendly and reasonable to integrate the payment systems such that there would be a common way of treating unmarried cohabiting parents. If there were a coherent approach in the tax and social welfare systems, there would not be so many people trying to dodge the rules, thereby resulting in fraud. In many ways, if we had introduced the new payment that the late Séamus Brennan had promised, it would have addressed many of these problems.

An issue arises regarding children living in poverty, irrespective of whether their parents are married, working or on welfare. The payment should be directed towards the children. That we do not have such a family-friendly system means there always will be fraud as people try to survive on welfare. I am not condoning this for a second but stating there is a complete lack of coherence with regard to the treatment of unmarried families by the Revenue Commissioners and the Department of Social and Family Affairs.

Vice Chairman

I do not wish to stifle any discussion but am advised that the delegates must be careful about how they respond to questions on Government policy. I presume they know that anyway.

Ms Niamh O’Donoghue

The Vice Chairman has taken the words out of my mouth.

Deputy Róisín Shortall

May I ask further questions on this area? Do the delegates have any figures on the number of parents who do not live with their children who are paying maintenance for the children? To what extent are parents pursued in regard to their responsibility to maintain their children? What is the Department's policy on the registration of fathers' names on birth certificates? Very mixed messages are being received by unmarried parents, especially unmarried mothers, who are often advised by staff not to include the name of the father on the birth certificate. What is the Department's policy in that regard? In a number of European countries, there is a legal obligation to register the father's name on the birth certificate. Perhaps that should be our starting point.

Ms Niamh O’Donoghue

The Deputy will appreciate that the General Register Office operates under the Department of Social and Family Affairs but there is very specific legislation governing registration matters. To the best of my knowledge, it is not mandatory for the father's name to be included. I cannot claim to be an expert on the legislation.

Deputy Róisín Shortall

It is not. Has Ms O'Donoghue a view on whether it would be desirable to require people to register fathers' names?

Ms Niamh O’Donoghue

The policy is reflected in the current legislation. If that policy or legislation were different, it would allow for different courses of action. However, based on the policy in place, the system is as operated by the General Register Office and pursued by ourselves.

I will talk a little about the Deputy's specific questions. As I stated, every claim for a one-parent family payment that is registered is referred to the maintenance recovery unit to establish what exactly is recoverable and whether there are any payments in place. This information can be provided in more detail to the committee. Let me give some examples. In 2008, for example, there was a total of 16,300 such cases examined by the maintenance recovery unit. In 14% of cases, there was no trace available in regard to the liable relative mentioned. In 23% of cases, the liable relative who had been identified was actually in receipt of social welfare payments. In approximately 13% of cases, the liable relative was either unknown or there were particular circumstances that prevented our making contact with him and pursuing the matter. In approximately 36% of cases, the income level of the individual in question meant there was no contribution due. There is a threshold above which maintenance payments are sought. In 13.5% of cases, a determination order was issued by the maintenance recovery unit seeking payment. I can give those details to the members separately.

Deputy Róisín Shortall

The figures are extraordinary.

Ms Niamh O’Donoghue

What is extraordinary is the number of cases on which maintenance cannot be recovered by one means or another.

Deputy Róisín Shortall

Orders were issued in only 13.5% of cases.

Ms Niamh O’Donoghue

Yes, but for reasons underpinned by particular policy decisions on the threshold of income and the question of whether one is on social welfare or has insufficient income to maintain oneself in the first instance.

Deputy Róisín Shortall

There are lessons to be learned in regard to social policy across a number of Departments. Is anybody doing anything about it?

Ms Niamh O’Donoghue

I am very careful about and conscious of the Chairman's advice on this matter. Obviously matters of social policy are under consideration constantly. In particular, they concern practice, evidence and experience in terms of administration and the difficulties that arise therefrom. Ultimately, the decisions made are policy decisions made by the Government.

Deputy Róisín Shortall

Is the matter being researched actively within the Department at present?

Ms Niamh O’Donoghue

Yes.

Deputy Róisín Shortall

As I stated, this committee is commissioning work in this area at present. The committee in the mid-1990s considered the matter and produced a report. It did not cause any change in direction or policy to occur within the Department. What is the purpose of the policy unit? If it examines this matter, it will see there are clear social policy issues involved. The figures listed are incredible. Why are we not witnessing change?

Ms Niamh O’Donoghue

Ultimately, decisions on policy are a matter for the Government.

Deputy Róisín Shortall

Has the Department produced recommendations?

Ms Niamh O’Donoghue

The Department, through its policy committee and research unit, is constantly evaluating policy, the changes that might be possible and the impact they might have. Ultimately, however, the decisions in this regard are a matter for the Government.

Deputy Róisín Shortall

I wonder what needs to happen to make the Government change its policy in this regard. It is extraordinary.

Many northern European countries have a legal requirement that a father's name be registered on a birth certificate. Does the Department have any information that would indicate whether there is a higher level of maintenance paid where this is the case? Is there a lower level of fraud? Is there any correlation between the requirement to register a father's name and the level of fraud associated with maintenance payments?

Ms Niamh O’Donoghue

I do not know if there is such information but I can certainly find out.

Deputy Róisín Shortall

I would appreciate that.

Ms Niamh O’Donoghue

I will ask my colleague from the Department of Justice, Equality and Law Reform, Mr. Moloney, to discuss the remaining issues.

Mr. Gerard Maloney

Deputy Enright asked about the IT facilities available to the Garda National Immigration Bureau at Dublin Airport. Approximately 29 million people pass in and out of the country every year. The Garda National Immigration Bureau has an information system available to it that records all registrations of foreign nationals, apart from asylum seekers who are dealt with by the Office of the Refugee Applications Commissioner. The bureau also deals with deportations and removals. This system links with the Departments of Social and Family Affairs, Enterprise, Trade and Employment and the Office of the Refugee Applications Commissioner. It is a sophisticated system housed in the Garda National Immigration Bureau headquarters on Burgh Quay and linked to airports and other main ports of entry. Immigration officers have access to this large body of information.

The system is web-enabled and is linked, in turn, with Garda headquarters which has experts in document and multiple identity fraud. The gardaí at the ports of entry and Burgh Quay have been trained by those in the technical bureau in document and identify fraud. As personnel move around, new personnel are trained in the whole area of document fraud.

One measure that could be used in a major clampdown of welfare fraud is the introduction of biometrically enabled documents. Passports already contain biometric photographs. They are being introduced on the Garda National Immigration Bureau registration card and it is a policy intention to roll it out for visa applications. This will create a joined-up system between passports, visas and Garda National Immigration Bureau cards which will mean the chances of anyone getting away with presenting fraudulent documentation for welfare benefits will be slim to nil. The single identifier will be the fingerprint.

Deputy Olwyn Enright

Take the case of a person claiming social welfare but who is not living in the country. When he or she comes back into the country, has the system a mechanism that will be triggered to highlight that this person is flying in and out of the country?

Mr. Gerard Maloney

A garda at an airport has access to social welfare information and this would be linked in with the two social welfare inspectors. There is a way of checking it through. I cannot answer if a garda can press a button on a system in an airport and get a drop-down menu of what benefits a person is getting. I will come back to the committee on this.

Deputy Olwyn Enright

An officer at an airport will look at an individual and the passport but it is not scanned through any machine. However, in the United States all passports are scanned allowing the authorities to know when an individual has left or arrived in the country. I feel the Irish system is not sufficient to stop people coming in and out of the country to claim social welfare benefits.

Mr. Gerard Maloney

I see where the Deputy is coming from. The Irish Naturalisation and Immigration Service is developing a border information system which will capture advance passenger information for flights in and out of the country and match that information against various immigration, Revenue and social welfare watchlists. As the system is developed like the UK's e-border system, if someone leaves the country while in receipt of certain social welfare assistance with a time limit, the system will knock them off immediately.

An interdepartmental group is in place comprising all the key Departments in this area. We are in the process of going to tender to develop a pilot system that would mirror the UK'se-border system. That is the general direction of the system and I hope it will address the issues raised by Deputy Enright.

Deputy Olwyn Enright

I accept there have been spot checks with, for example, schools to confirm if children in receipt of children's allowance were attending them. However, there is no checking system in place at ports of entry to stop people flying in and out – if it is affordable to do so — to claim benefits.

Mr. Gerard Maloney

Some of them are slipping through the net. The net will be tightened with the Irish border information system which I described.

Deputy Olwyn Enright

Is there a timeframe for its roll-out?

Mr. Gerard Maloney

It is hoped to get the tender out this year. The initial developments will be early next year. There has been a Government decision to proceed with this and it will be done on a phased basis. Phase 1 will deal with travel from outside the Common Travel Area. As we get comfortable with this system and see its hits and successes, we will have to go back to the Government for approval to deal with intra-Common Travel Area matters. This is problematic in itself because of the Border and so forth and it is another day's work.

Ms Niamh O’Donoghue

That is one element of the control strategy; it is not the only one. I do not wish any suggestion to come out from our presentation today that anyone engaged in such activity will get away with it scot free. I am not claiming we have a perfect system. However, the certification is but one element of the control strategy operated by the Department. It is supplemented by activity of our inspectors on the ground and various other measures. We are looking to avail of modern technology to support our efforts in this regard. Rather than it being a good chance of not being caught, I would say it is quite the opposite.

Deputy Róisín Shortall

What is the timescale for the roll-out of the programme?

Mr. Gerard Maloney

As I said, the request for tender will be going out later this year. The initial phase will deal with travel from outside the Common Travel Area.

Deputy Róisín Shortall

What about the full implementation of the project?

Mr. Gerard Maloney

Getting the system bedded down will take between 24 to 36 months before we move on to phase 2 for the intra-Common Travel Area roll-out. We are working closely with the UK's border agencies on this.

Deputy Róisín Shortall

Why is it taking so long?

Mr. Gerard Maloney

It is a major project and we can only move on an incremental basis because we must get enabling legislation in place. There are huge data protection issues around this. All of these must be put into place and signed off before we implement this programme.

Deputy Róisín Shortall

When is that legislation promised?

Mr. Gerard Maloney

The legislation is provided for in the Immigration, Residence and Protection Bill 2009 which is on Committee Stage in the Dáil.

Deputy Róisín Shortall

It still seems a long timescale.

Mr. Gerard Maloney

I accept it is a bit down the line. We should see the initial benefits of this early next year.

Deputy Róisín Shortall

Is the current Garda National Immigration Bureau card compatible with the social welfare card? Does a non-national require a Garda National Immigration Bureau card to make a social welfare claim?

Ms Niamh O’Donoghue

Yes.

Deputy Olwyn Enright

While the Department can spot check welfare fraud, are there other measures that could be introduced in the system to make it more difficult, particularly for those in the construction industry?

Mr. Norman Gillanders

The policing of that abuse comes into the Revenue audit programme. Approximately 14,000 audits are conducted every year. A large percentage of them have been focused on the construction industry. Due to the overhang of business from the boom, currently 20% of the audits are still focussed on the construction industry.

We also can use the joint investigation units and our audit staff to look at matters such as one-off housing and we have a fair degree of intelligence in our computer systems to identify some of the risks associated with the type of behaviour the Deputy has been talking about. The notion of attaching reports of electricians, plumbers and plasterers to the mortgage applications involves data protection issues and there is a risk of being swamped with a large amount of paper we should have difficulty in processing. However, there are other ways of doing this, using the intelligence within our systems, our existing audit programmes and certainly the joint investigation units.

I know already, for example, that one of the Revenue units along the Border in recent months has done about 50 site visits to housing developments looking for problems as regards working and signing and cross-Border tax evasion. It is a matter of possibly making greater use of our enhanced joint investigation units to look at some of that. About 18 months ago one of our district officials went around a particular rural setting looking for one-off housing developments on a Saturday. That seemed to the official to be an area where people could be doing nixers and be engaged in other activities. There are many ways of coming at this from within the parameters of our existing data holdings and tax compliance programmes.

Deputy Olwyn Enright

I can see how the Revenue can catch people who are doing add-on work and nixers while not paying tax. If people have not paid any tax within the last three or four years because they are on jobseeker's or disability allowances and working, they will have no dealings with the Revenue Commissioners at all. These are the people I am wondering about.

Mr. Norman Gillanders

That is where our programme of visiting sites comes in. We have trained a large proportion of our audit staff in health and safety issues for visits to building sites. They make visits to building sites, many of which are done with people from NERA or DSFA. To some extent it is the people who run away when we visit sites that we are really interested in. However, good intelligence is to be obtained from site visits and it includes data about people who are working and signing.

Deputy Róisín Shortall

I am trying to get a sense of the extent of fraud detection and the management of the risk involved. Apart from the fraud and error surveys being undertaken by the Revenue, say, one or two a year, does it do spot checks across different schemes?

Ms Niamh O’Donoghue

There are various processes in place and these give rise to the detection of overpayments, among other things. A proportion of claims are counter-examined by persons other than the original deciding officer to ensure consistency and also to ensure that eligibility was correctly established.

Deputy Róisín Shortall

Apart from the personal inspection of claims when people are in payment, are any spot checks being done?

Ms Niamh O’Donoghue

These are the review policies in place under the different schemes. Those review policies have different characteristics, depending on the characteristics of the schemes themselves. The entire case file can be re-examined either as a desk-based assessment or through a home visit or whatever. However, that is an ongoing piece of work being carried out by our general inspectorate. There have been approximately 205,000 reviews across all schemes so far in 2009.

Vice Chairman

A number of colleagues have made a point about information that might be sent to the committee, so we look forward to receiving that. I thank all our guests. This has been a particularly worthwhile meeting and exchange. I thank them all for their attendance and their positive contributions. I also acknowledge the co-operation of my political colleagues. I am sorry the Chairman had other business to attend to, and I hope I coped satisfactorily.

The joint committee adjourned at 1.15 p.m. until Wednesday, 24 June 2009.