Wednesday, 25 September 2019

Questions (6, 7, 14)

Brendan Howlin


6. Deputy Brendan Howlin asked the Minister for Employment Affairs and Social Protection the anticipated cost of her compliance and anti-fraud strategy; and if she will make a statement on the matter. [38879/19]

View answer

Willie O'Dea


7. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection if she will report on the new anti-fraud strategy; and if she will make a statement on the matter. [38835/19]

View answer

Thomas Pringle


14. Deputy Thomas Pringle asked the Minister for Employment Affairs and Social Protection the estimated amount it will cost to review over 750,000 social welfare claims in 2019 as part of the new anti-fraud strategy; the estimated savings that will be made from the review; the timeline of the review; and if she will make a statement on the matter. [38798/19]

View answer

Oral answers (12 contributions) (Question to Employment)

The purpose of these questions is to look further into the recently announced compliance and anti-fraud strategy which the Minister announced, particularly to see whether it is value for money and whether it is going to achieve anything, considering the public services card was also designed partly to identify fraud within the Department.

I launched the Department's new compliance and anti-fraud strategy last week, covering the years 2019 to 2023. While it is acknowledged that the vast majority of people on social welfare are claiming the correct entitlement due to them, my Department has a duty to ensure that non-compliance in the social welfare system is minimised so that resources we have just spoken about can be directed to those who need them most.

The strategy sets out how my Department will tackle welfare non-compliance during the period in question and it builds upon the successes of the previous strategy, which ran from 2014 to 2018. The new strategy comprises four pillars: “Prevent”, “Deter”, “Detect” and “Account”. My Department's objectives under each of these pillars are as follows: to prevent error or non-compliance entering the system in the first instance - which does happen, as we recognise - by having in place robust scheme application channels and clearly defined assessment processes to try to reduce some of the errors that are made, either by the humans in the Department or the humans we are interacting with; to discourage attempts to defraud the social welfare system by actively pursuing the recovery of overpayments that have taken place and considering cases for prosecution where there has been a deliberate attempt to defraud the State; to detect instances of fraud and error in the social welfare system as quickly as possible through various control measures and techniques; and to protect moneys entrusted by the taxpayer and authorised by the Oireachtas through appropriate governance procedures, oversight and monitoring. It is underpinned by a comprehensive implementation plan, which outlines how we intend to achieve our objectives. Of course, we must remain alert to new and emerging forms of fraud, so our approach will remain flexible and dynamic in terms of how it is structured.

An important new initiative relates to the need to tackle false self-employment, which is contributing to a drain on the Social Insurance Fund and the denial of employment rights to affected workers. My Department is establishing a new unit of social welfare inspectors which will be focused solely on false self-employment, as opposed to the entire team of inspectors being involved in all inspection cases. As part of the new strategy, the Department plans to conduct over 750,000 reviews of social welfare claims over the course of this year and 2020. This represents an increase on the 742,000 reviews conducted last year. The target for savings resulting from these reviews in 2019 is €530 million.

Control reviews take place across the range of schemes operated by the Department and can take a variety of forms. They include desk-based assessments of customer claims, face-to-face interviews with customers by trained investigators, home visits, audits of employers’ PRSI records, specialist investigations, self-declarations by customers and joint inquiries and operations with other State agencies, including Revenue and CAB. Reviews looking at the medical conditionality underpinning certain schemes are also undertaken to try to help ease processing.

Reviews arise from both targeted and random case selections and where specific information comes to the attention of the Department. In this context, it should be noted that customers are under a legal obligation to report any change in their circumstances, including income or means, to the Department and such notifications may also trigger a review of a person's entitlement. These reviews, and the other activities described in the strategy, form part of the control work which is a core function of all officers of the Department. For this reason, while the Deputy asked for a costing, the cost of the work under the strategy cannot be disaggregated from overall departmental expenditure and functions. It is my genuine hope that this strategy will give strong assurances to Irish society generally that the system of control we operate is robust and effective. I hope this clarifies the three matters raised by the Deputies.

I am disappointed that the Minister has not been able to give us some kind of costing because she was able to give us an estimate of savings, which she said were €530 million. I am not sure how she can estimate savings yet cannot estimate the cost to the Department. The previous strategy only saved an estimated €1 million so is that figure of €530 million an overestimate of what might be saved under the strategy? I certainly welcome the prevention element because, in many cases, it is actually a mistake by the Department that causes overpayments. I strongly welcome the emphasis on bogus self-employment. Can the Minister confirm that the Department will as zealously seek the prosecution of employers who engage in fraud through bogus self-employment as it will seek the prosecution of people who draw social welfare payments? It is important that we get that balance between white-collar crime and blue-collar crime, if we can call it that.

Has the Minister any intention of trying to simplify the multiple and complex categories of welfare assistance, which would probably save the Department a lot of administration money in terms of the overall cost of delivering the system, which was €629 million in 2018?

The new strategy will build on the success of the old strategy, which saw control savings of €2.5 billion over the lifetime of the last strategy, so I am not sure where the Deputy's reference to €1 million came from. Overall, the key outputs from the 2014-18 strategy were as follows: more than 4 million control reviews carried out; €2.5 billion in savings; 94,000 reports from members of the public in regard to potential fraud processed; €400 million worth of overpayments recovered; almost 190 suspected identity fraud cases identified; and almost 1,500 cases referred for prosecution. I have a detailed response as to how the control numbers are calculated and if that is of interest to the Deputy, I will give it to her as I do not have time to read it out.

We look at all schemes every year and we find there are anomalies in different schemes. There are different criteria for different schemes so I am assuming that what the Deputy is alluding to is some sort of universal payment which would make it easier for people.

I am referring to simplification.

It might make it simple but I am not sure the outcomes would be any different for the people we serve. I believe there are anomalies in our system. For argument's sake, the cost of the disability review we undertook in last year's budget, on which I will hopefully have findings later this year or at the beginning of next year, should seek to establish that people who are living on a disability payment have different outgoings than people who are trying to seek work. There are anomalies in our system that can be addressed but it can only be done through statistical data.

The Minister said she was building on the previous anti-fraud strategy. Is she aware that her predecessor, when he introduced the previous so-called anti-fraud strategy in 2016, estimated that fraud amounted to €530 million? Some €530 million was going to be saved as this was the amount of fraud in the system. Subsequent parliamentary questions revealed that in 2016, the Department raised €110 million in overpayments, of which only €41 million amounted to fraud. Has the Department taken steps to recalculate how it measures fraud in view of the Taoiseach's massive overestimation of the amount of fraud in the system?

I was not aware that was what the then Minister said, but I am more concerned about my plans. We have not changed how we calculate our control measures and their results. However, I consider the sum of €41 million in deliberate fraud to be a sizeable amount of money, taking from money we could collectively spend on fuel poverty, children and schools meals, if the Deputy says that is all it was.

Nobody condones that.

On the matter of bogus self-employment, while I welcomed the Minister's announcement I wish to ensure that she will seek prosecutions of employers. Of the 100 prosecutions for welfare fraud last year, only one could be attributed to employers actively engaging in bogus self-employment. This is something we must address. The Irish Congress of Trade Unions has campaigned on this issue, as has my colleague, Senator Nash. If there is an opportunity to address it, that is a welcome element of what the Minister is announcing.

To clarify, nobody condones social welfare fraud but it is a question of how much social welfare fraud there is in the system. There is a hell of a difference between €530 million, which appeared on the side of every bus I saw in 2016, and the actual figure of €41 million. The Minister said there will be an emphasis on bogus self-employment. Will there be a separate and increased number of staff allocated by the Department to focus on bogus self-employment as a result of this? Will that be part of the new strategy?

I should have answered Deputy Jan O'Sullivan's question earlier but I ran out of time. The answer is "Yes". We have a new unit. I can only assume that as a regulator in the past the Department, in its inspections or investigations of complaints, sought to right the wrong. If it discovered in the past that an employer had wrongly classified somebody from S to A or to any other classification, it made the employer right the wrong and backdate the payment to rectify it. We are somewhat past that now. As a regulator, we sought to rectify things as opposed to punishing people.

We have to lead by example. To answer Deputy O'Dea's second question, the unit is new. It is a ring-fenced team whose members have had specialised training. They have a specific remit and I hope it will yield results very quickly.

I am sorry that I did not have an answer to Deputy O'Dea's first question earlier. According to my notes, the €530 million the Taoiseach referred to at the time was control savings and only part of that would have been fraud. However, €41 million in fraud is a sizeable amount and, collectively, we must stamp it out.