Dáil Éireann Debate, Wednesday - 23 February 2005
69 Mr. Penrose asked the Minister for Social and Family Affairs his views on the recent error which led to some social welfare recipients receiving a double payment in one week and no payment the following week; if he has taken steps to ensure that this does not happen again; and if he will make a statement on the matter. [5888/05]
View answer87 Mr. Crowe asked the Minister for Social and Family Affairs if he will report on the system breakdown whereby 47,000 clients received double payments in error (details supplied); and if he has satisfied himself at the arbitrary nature of the recovery of the payment that was put in place. [5905/05]
View answer99 Mr. McGinley asked the Minister for Social and Family Affairs if his Department has made changes to procedures or to the process of reclaiming overpayments following an error made by his Department over the new year 2005 period which resulted in thousands of welfare recipients not receiving their payments for one week; and if he will make a statement on the matter. [6062/05]
View answer101 Mr. Sargent asked the Minister for Social and Family Affairs the way in which additional social welfare payments were made to 47,000 pensioners; and his views on whether the method of repayment sought was properly handled. [6079/05]
View answer115 Mr. Bruton asked the Minister for Social and Family Affairs if he will report on the procedures for claiming overpayments; if he has satisfied himself that this procedure was followed correctly in regard to social welfare overpayments made in January 2005; and if he will make a statement on the matter. [6034/05]
View answerI propose to take Questions Nos. 69, 87, 99, 101 and 115 together.
My Department issues payments each week to approximately 1.1 million customers in respect of 49 separate schemes. This requires implementing a complex set of procedures to ensure payments are produced accurately and on time. At Christmas time the process is more complex as additional procedures are required to pay double payments around that period. Arrangements are put in place to make payments in advance to ensure that customers are not inconvenienced by the closure of banks over the holiday period.
Approximately 667,000 customers are in receipt of long-term benefit on schemes such as old age, lone parent and invalidity pension. Some 168,000 of these customers receive their payment entitlements by way of electronic fund transfer, EFT. This facility allows customers to receive their payment into their bank account. The EFT facility is available to customers living in Ireland or abroad. Customers living here receive their payments on a weekly basis, while those living abroad receive their payments on a four-weekly basis.
During the Christmas period in 2004 my Department put arrangements in place to make a payment covering two weeks of entitlement to our weekly paid customers. This was to ensure that such customers were not adversely affected by the limited bank opening hours over the holiday period. Payments for 15, 16 and 17 December, inclusive, included the Christmas payments for 22, 23 and 24 December, respectively.
On Thursday, 23 December 2004 an error occurred during the production of payments for 47,977 of my Department's weekly paid customers. An incorrect set of instructions was entered in the computer programme resulting in the issuing of a payment for two weeks to the customers in question instead of the single weekly payment intended. Unfortunately, when the error was discovered the payments had already been credited to the customers' bank accounts. The customers concerned received payment of their entitlement one week early and due to the holidays it was not possible to contact them immediately to advise them of the position. As soon as possible after Christmas, my Department wrote to all the affected customers to explain the position and apologise for the inconvenience caused.
My Department has established additional interim control measures to prevent recurrence of such errors. A more comprehensive review of all payment generating procedures for customers is nearing completion and will lead to improvements in these procedures. My Department regrets any inconvenience caused to customers and is satisfied that implementation of the review recommendations will prevent a recurrence.
While errors can happen, this error was unfortunate because it affected recipients of the weekly retirement pension, carer's allowance, invalidity pension and lone parent's allowance. One cannot blame them for assuming they had received a bonus and proceeding to spend the money on various items at Christmas, as is the propensity at that time of year. It came as a major shock to them to learn that an error had been made.
The Department's handling of the issue was harsh, insensitive and wrong. Those affected received a letter on the Thursday following the payment informing them that they would not receive payment that day. Why could the additional payment not have been paid back at a rate of, say, €10 per week, as is the case with income tax moneys, particularly given that the people in question have been in receipt of payments over a prolonged period and the error was made by a computer in the Department? With money flowing in from all sources, it would have done no harm not to recoup the payment and instead give recipients an opportunity to spend money they probably should have received years ago.
What guarantee do we have that this error will not recur? Many individuals and families struggling to pay off post-Christmas debts and high household utility bills at this time of year were left in the lurch. Did many of those affected apply for social welfare allowance payments to bail them out because an error occurred and they genuinely believed they were entitled to the additional payment? The Department did not take cognisance of the fact that many people were in dire financial straits in the first week of January.
I regret if hardship was caused to anybody as my intention is to ensure the opposite. What occurred was not an overpayment but an advance of entitlements. To put the issue in context, of more than 1 million recipients of a weekly payment from the Department, 47,000 who have bank accounts were paid in advance for an additional week. Given that the Christmas bonus had been paid several weeks previously, they could not have believed it was a Christmas bonus.
Santa often arrives twice.
While I accept that those who received a double payment may have been upset by the decision, it arose because recipients received an advance payment for the following week. I took the decision to skip a week's payment to catch up with the advance. The Department took the view — I make this point advisedly — that given that the customers in question receive payment via a bank account facility, they were by and large likely to be able to manage a bank account and funds generally. They were informed as soon as possible after the double payment was made that it was an advance. I decided it was preferable to deal with the matter immediately, rather than drag out repayments by 47,000 customers for more than a year. The matter is now done and dusted and I hope it did not discommode too many people. We will move the computer elsewhere.
The Minister accepts the mistake was made by the Department. An arbitrary decision was taken as a result. It is not necessarily the case that people with bank accounts are more solvent. Many of those who contacted me genuinely believed the payment was a bonus. No consultation took place with representative organisations, such as Age Action Ireland, the Carers Association of Ireland and others, before the letter was sent out and the Department did not offer people leeway. Many elderly people went without for the week in question because they are too proud to seek money from a community welfare officer. This has been the difficulty. I agree with Deputy Penrose that it was wrong to take this course of action. The claw-back should have been spread over a number of weeks, regardless of the administrative difficulties this may have caused. It was the Department that made the mistake, not the recipients with bank accounts.
Whether one calls it an advance or a double payment, the reality is that people suffered. Many welfare recipients contacted me to relate the difficulty they experienced as a consequence of this arbitrary action. I hope it will not happen again. Does the Minister agree there should have been consultation on this issue with the groups that represent those affected?
This is one of those events I wish had never happened. The Department and I regret that payments were made to the bank accounts of 47,000 welfare recipients a week in advance. Deputies may have different experiences but my understanding is that social welfare customers are generally increasingly aware of their rights and entitlements and increasingly able to manage money and budgets.
Some 30% of those entitled to welfare benefits do not claim them. That is a sizeable proportion.
To put the matter in perspective, what happened was that people were paid a week in advance. The worst that could have happened is that a significant proportion of that number could have believed this to be a bonus. I have no way of knowing how many recipients understood this to be the case but I take on board Deputy Crowe's information that he received many complaints to that effect.
I contend, however, that most of those recipients who saw a double payment in their bank accounts were intelligent enough to investigate this by, for example, calling the Department's helpline. They could not have believed it to be a Christmas bonus and must have realised quite quickly that something was amiss. It is certain there would have been much more of a panic if they had received only a half payment. This was a matter of double payment, however, and the error was corrected immediately.
I regret that some hardship may have been caused. However, the increasing financial literacy, if I may apply such a grandiose term, of the customers with whom we deal is improving dramatically. Many are fully au fait with their entitlements. I hope not too many experienced difficulties because of this genuine error and the Department has taken steps to ensure such an eventuality does not recur.
Will the Minister clarify the difference between an advance and an overpayment? Is the Minister aware and did his Department take cognisance of the Social Welfare (Code of Practice on the Recovery of Overpayments) Regulations 1996 when this action was taken? For instance, did the Minister and his officials note the requirement in these regulations that where an overpayment has been assessed against a welfare recipient, he or she should be advised of the factors that gave rise to it, advised of the amount involved and the proposed method of repayment and afforded an opportunity to bring to the Department's notice any views he or she wishes to offer on the assessment of the overpayment, proposed method of repayment and any facts or circumstances he or she considers relevant to the repayment of the overpayment? In addition, under the regulations, repayment of an overpayment may be deferred where the person liable is unable to do so at the time.
The Minister has acknowledged this issue may have caused hardship. However, the regulations exist within the Department to deal with such occurrences. I do not agree with the Minister that it is a case of an advance rather an overpayment. The former is a new term, conveniently trotted out to alleviate the consequences of this mistake. This was an overpayment whereby people received more than they were entitled to in that particular week. Why were the relevant regulations not followed?
Why were people not advised of their rights in this matter to communicate with the Department as to how the money could be paid back? If recipients decided, for example, to use all the money in one week to pay a bill, they were left with nothing for the following week. Is the Department entitled not to make a payment on a week in which they are entitled to that payment? I understood a person was entitled to receive a payment each week from the Department and the latter does not have the right to stop a payment, as happened in this case, because of an overpayment. Are the relevant regulations still in force and have they been consulted? If the Minister was aware of them at the time, why did he not bring them to the notice of the social welfare customers involved?
There is a difference between an overpayment and an advance and there is scope for political argument in this regard.
The Minister is splitting hairs.
In referring to a "method of repayment", Deputy Stanton suggests that I should have pursued the 47,000 welfare recipients in question in an attempt to secure weekly repayments of some fixed amount. I did not pursue anybody for repayments but took the view that recipients should keep the money they had been given in advance. Why should I attempt to get money back? It would only make the situation worse if I were to contact the 47,000 recipients through my officials and demand that they must repay a specified amount over a fixed number of weeks.
Having erroneously made a double payment, it was better to explain the situation immediately and trust the recipients' common sense and intelligence in handling it. It would have only exacerbated the difficulty to take the approach that, because we want to live within the letter of the law, recipients must repay €40 per week, which arrangement might require the completion of 47,000 forms and the involvement of inspectors. By taking the action we did, the entire matter was done and dusted in five or six days, without reclaiming money from any recipient. I fail to understand Deputy Stanton's reasoning on this matter. I took the view that the best approach was to explain and deal with the situation immediately, leave the funds with the recipients and apologise for the genuine data input error that had taken place.
I do not regard this error as representing an overpayment. The latter refers to moneys one receives to which one is not entitled. Perhaps it is a Jesuitical argument.
Yes.
This payment represented something to which the recipients were entitled, though not until the following week. Whether such a payment constitutes an advance or an overpayment is a matter for debate.
The Presentation Brothers rather then the Jesuits educated me and I cannot understand the distinction. The Minister seems to be saying that an overpayment is something that an individual welfare recipient may fall foul of and for which he or she must make restorative arrangements, but that when the case relates to a collective group of recipients, it equates somehow to an advance payment by the Department. This is far too subtle a distinction.
On foot of his decision in this matter, the Minister must put in place some optional repayment facility in view of the circumstances in which people have found themselves. This should include the option of immediate payment or a repayment term of three or six months, depending on an individual's circumstances. I disagree with the Minister's contention that recipients could not have understood the extra money to be a special Christmas payment. His predecessor was well known for making special once-off payments that were not linked to the calendar year. Such special payments included those to centenarians and those in regard to child support in certain circumstances, for instance. Because of this, there may have been an expectation among welfare recipients. Many in this country would not put anything past this Government in terms of winning favour for electoral purposes and might have understood this extra payment as a favour for whatever purpose.
The constituents of Kildare North and Meath may get some special payments if they only hold their breath.
On those grounds, the Minister should acknowledge that what happened was wrong and that the subsequent handling of the case was also wrong. A system must be put in place to give people the option of an easier repayment system that might better suit their circumstances.
Perhaps we should give social welfare recipients an option as to when they will be paid. I have already dealt with the repayment issue. We did not regard this as a case in which any amount was due to be repaid to the Department. The double payment was explained to the recipients and we communicated that there would be no attempt to reclaim the extra moneys. Repayment was not an issue because it would have involved us in significant administrative and negotiation efforts, all to the purpose of reclaiming money to which the recipients were entitled seven days later. Some common sense must be applied in such instances.
However, I have observed in the past that there may be a case for looking at the issue of payment options. There may be people, for example, who are well able to manage their money on a monthly basis and would prefer to receive welfare payments by the month. I am working from the assumption that anybody who is receiving any type of benefit or entitlement is intelligent and possessed of common sense. Perhaps we should accommodate this by building some element of choice into the system. Not everyone insists on a seven-day payment, such as those recipients abroad who are paid on a four weekly basis. We can arrange to pay people in advance if that suits them and other people on certain days. Choice and options should be extended to our customers rather than having a one size fits all approach based on the view that everyone who receives a payment cannot be relied upon to manage their money for seven days. That is an unfair premise but some people are unfortunately in that situation. Most recipients have common sense and are well able to manage their funds.
The Minister did not answer the question raised by Deputy Stanton. Was the code of practice broken when the payment was withdrawn from the recipients the following week? I do not agree with the Minister's argument on paying people on a monthly basis. These are people on low incomes.
Only by choice.
I admit it is by choice. The Minister's actions, however, create a temptation. A social welfare recipient will——
I trust them.
——take the monthly payment. The problem is that he or she will be visiting the community welfare officer two weeks after payment.
They are better than that.
That is not the issue. The difficulty is that these recipients cannot afford to live on what they receive from the State.
What about common sense?
The recent increases in ESB charges have resulted in more constituents attending my clinics than ever before. The company calculated its latest bills to include an extra ten days in the last month which created many problems for people on social welfare benefits.
I became aware of a case recently of an individual who began a job in the Department of Education and Science. There are 12 grades for the position and although the individual was to start at grade one, payment was at grade 12. After the individual corrected this, the Department demanded the €16,000 overpayment be paid back.
When the nursing home charges were deemed illegal, the Government claimed it did not matter what it owed as it was only prepared to pay back €2,000 to those affected. What if these social welfare recipients informed the Department that it had made the mistake and they could only pay back 50% of the overpayments? They did not get that opportunity because the Department broke its regulations on the collection and payment of moneys back to the Department.
No regulations were broken because a code of practice applies to overpayments. As this was not viewed as an overpayment, the regulations did not apply. The overpayment category is clearly defined and categorised by the Department. Some overpayments are considered to be fraud and are dealt with in a particular way. There is overpayment that is the Department's fault. This occurs when a recipient receives more than that to which he or she is entitled. In the case in question, people received that to which they were entitled to but received it a week earlier.
The Minister is good. He is consistent.
I rest my case.
And now he has finished.
