Dáil Éireann Debate, Tuesday - 17 November 2020
588. Deputy Catherine Murphy asked the Minister for Social Protection the way in which her Department’s annual amount for contingent liability is set; the factors considered when setting contingent liability; if forecasting is undertaken regarding setting future amounts; the contingent liability figure for her Department for 2020; and if the contingent has been utilised to date in 2020. [36911/20]
View answerMy Department recognises and accounts for contingent liabilities in accordance with generally accepted accounting standards. The international accounting standard (IAS.37) defines a contingent liability as:
(a) A possible obligation that arises as from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
(b) A present obligation that arises from past events but is not recognised because:
(i) it is not probable that an outflow of resources embodying economic benefit will be required to settle the obligation; or
(ii) the amount of the obligation cannot be measured with sufficient reliability.
In accordance with Government accounting rules and generally accepted accounting standards, my Department does not make an accounting provision but discloses, by way of note, the appropriate detail of contingent liabilities in its annual statutory accounts (the Vote 37 Appropriation Account and the Social Insurance Fund Financial Statements). Both accounts are subject to audit by the Office of the Comptroller and Auditor General.
My Department does not carry out an actuarial analysis or a formal risk assessment in respect of contingent liabilities. As part of its annual estimate process, however, it makes provision for all expenditure likely to materialise in each financial period.
In accordance with section 10 of the Social Welfare Consolidation Act 2005, an actuarial review of the financial position of the Social Insurance Fund (SIF) is conducted every five years for the purpose of determining the extent to which the Fund may be expected, in the longer term, to meet the demands in respect of the payment of social welfare benefits.
