COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 18 May 2006

Social Insurance Fund 2004.

Mr. J. Hynes (Secretary General, Department of Social and Family Affairs) called and examined.

Chairman

We will now discuss the 2004 annual report of the Comptroller and Auditor General and Appropriation Accounts, specifically Vote 38 — Department of Social and Family Affairs, resumed, and the social insurance fund 2004.

Witnesses should be aware that they do not enjoy absolute privilege before the committee. Their attention and that of members is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons identified in the course of the committee's proceedings. These rights include the right to give evidence; the right to produce or send documents to the committee; the right to appear before the committee, either in person or through a representative; the right to make a written and oral submission; the right to request the committee to direct the attendance of witnesses and the production of documents and the right to cross-examine witnesses. For the most part, these rights may be exercised only with the consent of the committee. Persons invited to appear before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of them and provided with a transcript of the relevant part of the committee's proceedings if the committee considers this appropriate in the interests of justice.

Notwithstanding this provision in legislation, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions in Standing Order 156 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policy or policies.

I invite Mr. Hynes to introduce his officials.

Mr. John Hynes

They are Ms Bernadette Lacey, director general with overall responsibility for the delivery of social welfare services; Ms Alice O'Flynn, assistant secretary with responsibility for pensions policy, expenditure review and internal audit services, as well as HR policy in the Department; Mr. Eoin O'Broin, director of regional operations and control programme; and Mr. John Doyle, acting principal officer in charge of the accounts branch.

Chairman

Will the officials from the Department of Finance, please, introduce themselves?

Mr. Dermot Quigley

I am the principal officer in the public expenditure division dealing with social welfare Vote. I am accompanied by Mr. Alan Zambra, assistant principal officer dealing with Vote control and administrative budgets.

Chairman

I ask Mr. Purcell to introduce Vote 38 and the social insurance fund 2004.

Mr. John Purcell

On the previous occasion, I introduced the Vote. As the relevant chapters were also considered at that time, I will briefly refer to the social insurance fund 2004. The fund is the final destination of pay related social insurance contributions collected by the Revenue Commissioners, as well as acting as a conduit for the transfer of health contributions and national training fund levies to the appropriate Departments. The moneys in the fund are used to pay the various social insurance benefits which include redundancy and insolvency benefits administered by the Department of Enterprise, Trade and Employment. The cost of paying out the benefits is met from the fund. In this respect, administration expenses totalled €191 million in 2004. The breakdown is set down in note 10 to the account.

For some years the fund has been returning a surplus on its activities, which is reflected in the healthy financial position represented by a balance of more than €1.9 billion in the investment account. My audit of the fund is closely linked to the audit of the Vote for the Department of Social and Family Affairs and any fund issues requiring public accountability are included in my annual report on the Appropriation Accounts. The relevant chapters for 2004 were noted by the committee at its meeting on 2 March.

Chairman

I thank Mr. Purcell. I now ask Mr. Hynes to make his opening statement.

Mr. Hynes

The social welfare system comprises contribution based payments and services paid for from the social insurance fund, means-tested payments and services financed by the Exchequer and universal schemes such as child benefit which are not means-tested but which are also financed by the Exchequer. As the Chairman noted on a previous occasion, a full assessment of social welfare expenditure requires reference to the accounts for the social insurance fund as well as the Appropriations Account. As this is the first time that the social insurance fund account has been specifically discussed by the committee, my opening remarks are focused mainly on this aspect of social welfare expenditure.

The social insurance fund has been in place since the setting up of the unified social insurance system in 1952 and is financed in the main by contributions made by employers, employees and the self-employed. Up to 1996 there were shortfalls every year between contribution income and benefit expenditure which had to be made up by an Exchequer grant to the fund. Since 1997, however, contribution income has exceeded benefit expenditure each year. The surplus of income over expenditure for 2004 amounted to €377 million. Total net assets in the fund at the end of 2004 amounted to approximately €1.9 billion. By the end of 2005 this had risen to some €2.4 billion and it is estimated that the surplus will be close to €2.8 billion by the end of this year. The investment account of the fund is the responsibility of the Minister for Finance who has delegated his functions in this regard to the National Treasury Management Agency operating under guidelines from him.

The fund is responsible for meeting expenditure on social insurance benefits, pensions and associated services, including administrative costs. Since 1990 it has also been responsible for meeting expenditure under the redundancy payments and employers' insolvency Acts administered by the Department of Enterprise, Trade and Employment.

PRSI contributions are made up of contributions in respect of social insurance payments, a separate health contribution and, since 2000, a national training fund levy. The income from these latter payments is paid over by the Department to the Department of Health and Children and the Department of Enterprise, Trade and Employment, respectively, on an annual basis. There are 11 classes of PRSI contribution depending on the nature of employment or self-employment and the amount of reckonable earnings. The class of contribution determines the range of social insurance benefits towards which entitlement is built up. The principal class, class A, covers the full range of insurance benefits. In any case where there is a doubt as to the appropriate contribution class to be applied, the Department's scope section will make an appropriate determination having regard to circumstances.

The coverage of the social insurance system has widened progressively during the years in terms of the numbers covered and the range of benefits provided. The role of the fund will grow in importance as more people establish entitlement to social insurance payments. The 1998 Social Welfare Act provided for periodic actuarial reviews to be carried out of the financial condition of the fund for the purposes of determining the extent to which the fund may be expected to meet the demands placed on it in the longer term and the adequacy or otherwise of the contributions to support them. Such a report, which was made with reference to the position at the end of 2000 and covered the period to 2056, was published in 2002. Arrangements are being made for a further review to reflect the position at the end of 2005.

For employees generally, PRSI contributions are collected by the Revenue Commissioners along with PAYE income tax. Enforcement of employer obligations in that regard is a matter for the Revenue, but the Department's inspectorate also monitors compliance through inspecting employers' records. Those inspections are designed to ensure that appropriate records are maintained and contributions correctly paid and remitted, and to detect any fraud or abuse of the social welfare system. Employer inspections are carried out by the Department's general inspectorate and by the special investigative unit, which is engaged full-time in the investigation of fraud.

All aspects of the Department's relationship with the Revenue regarding PRSI determination and collection are covered by a service-level agreement between the two organisations. That agreement is currently being reviewed.

In 2004, the year we are examining, total income to the fund amounted to approximately €6.745 billion, while expenditure was €6.368 billion, leaving a surplus of €377 million. Some €800 million was paid to the Department of Health and Children in health contributions, and €273 million to the Department of Enterprise, Trade and Employment as the National Training Fund levy. Expenditure on social insurance and related payments alone amounted to €5.3 billion. Of that expenditure, €3 billion went towards old-age schemes for the elderly and survivors, more than €1 billion on schemes for incapacitated people, and approximately €500 million on the unemployed.

Achieving more efficient delivery of social insurance and other payments is a priority for the Department. Greater use of new technology is a key to progress in that context, and arrangements to extend the service delivery modernisation programme to retirement and old-age pensions commenced in 2004. The service delivery model is now live and operational for contributory and retirement pensions. The programme will incorporate all the main scheme areas when complete. A range of other process improvements was also introduced during 2004, enabling the Department to deliver better service to customers in an environment where their numbers were increasing while staff numbers were falling.

On the fraud and control front, the Department began to introduce a revised approach to control activity in the light of an evaluation completed by the Comptroller and Auditor General at the end of 2003. That approach included an ongoing programme of fraud and error surveys to establish baseline fraud and error levels for schemes. Surveys have now been completed for child benefit, family income supplement and disability allowance and the results compiled. The survey on supplementary welfare allowance was also completed fairly recently, and the data are currently being collated.

As discussed at a previous meeting with the committee, a survey on the PPS number allocation process commenced in February 2006, and it is hoped to complete it by the end of May. A survey on disability benefit is scheduled to begin in September 2006. Those surveys will enable us to assess the level of fraud and error occurring in the schemes, and the outcomes can be analysed to highlight high-risk claims. Customers will be the focus of more frequent and targeted review. A range of other control initiatives has also been implemented by the investigation staff based in the Department's regions as part of a more targeted and focused control approach overall.

The Department was responsible for overall expenditure amounting to some €11.3 billion in 2004, some €6 billion of which was funded by the Exchequer and €5.3 billion by the social insurance fund. Approximately 1 million people received weekly social welfare payments that year. The Department is conscious of its responsibility to ensure the effectiveness and efficiency with which that expenditure is delivered, and I welcome any comments the committee may have in that regard.

Chairman

May we publish the statement?

Mr. Hynes

Yes.

Chairman

We are putting our programme together for the period between now and the end of July. I understand that a value-for-money report completed by the Comptroller and Auditor General has been in the Department for some time. It is to do with the transfer of rent supplement to local authorities and the eight pilot programmes under way. Will we have that in time to schedule it for discussion in June or July?

Mr. Hynes

I will have to check. We have the report, which has been discussed in the Department. The Minister has seen it and must decide when to present it to the Houses. I understand he intends to have it discussed by the Government in advance. I will certainly convey the Chairman's wish that we make the report available for the programme he has mentioned.

Chairman

Thank you. Deputy Joe Higgins will ask questions first, followed by Deputy Curran.

Deputy J. Higgins

I hot-footed it from the Chamber and I apologise for not being here for the opening statement. However, I have seen it in written form.

In the chapter under discussion, it was stated that the Department's system of administrative and financial control was subject to ongoing review and enhancement. Input included the results of two self-assessment control questionnaires drawn up by the internal audit unit and completed by the principal officer with responsibility for the Department's schemes and administrative functions. What was the outcome?

Mr. Hynes

We have a very active internal audit unit in the Department. It has reviewed our administrative and financial controls and taken account of control questionnaires drawn up by the unit and completed by the principal officers responsible for the schemes across the Department. The practice is that, on the basis of the survey results, the unit draws up a list of issues that it considers need to be addressed in the various scheme areas. Those are promulgated around the Department. Activity is ongoing, and if it sees areas that need to be tightened up or improved, it brings that to the attention of those responsible for the scheme areas concerned.

Deputy J. Higgins

What areas caused special concern?

Mr. Hynes

The control of expenditure, level of checking and extent to which claims are subject to review and control over the course of payment are general issues for the Department. As a general rule, the survey was positive regarding the extent to which schemes are applying correct controls, but there would be areas in which the unit might recommend more extensive or higher-level review or investigation regarding individual claims and payments. What we can do depends on our resources in the investigation branch, and we try to ensure that the schemes with the highest level of difficulty or control issues are targeted for control activity.

Deputy J. Higgins

One feature has been the development of a new overpayments and debt management system, which was expected to go live in 2006. Is that now in operation, and what are its main features?

Mr. Hynes

The main aspect is that we wish to develop a new system of recording and keeping track of overpayments. There is a range of different payment and computer systems in the Department, covering various schemes. One of the problems is that they are not linked all the time. We want to develop a central system, whereby when overpayments arise on any scheme they can be tracked. It is quite difficult to do because of the different systems we have. It is part of the service delivery modernisation programme we have been trying to develop. As I have said, that programme is now operational in the pensions area, generally, and we expect the debt management and overpayments module, which is part of that programme, will be operational by the end of this year. That is the programme. However, changing programmes, particularly when IT systems are involved, can often take longer than we think. Nonetheless, that is our schedule and that module should be operational by the end of this year.

Deputy J. Higgins

For reasons of time I will move quickly on to the question of the supplementary welfare allowance. The Department's expenditure in 2004 was €647 million. How much of that was rent supplement?

Mr. Hynes

I do not have the figure before me. Off the top of my head it was roughly €300 million, but I will have to check it. It is a high proportion of overall expenditure.

Deputy J. Higgins

Will Mr. Hynes say how many family units will account for that money in 2004? Has he a figure for 2006 as well?

Mr. Hynes

Rent supplement in 2004 was €325 million. I can check the number of families the figure refers to.

Mr. Purcell

I only have the Department's statistical information to hand on social welfare benefits. According to that, in 2004 there were 57,874 beneficiaries of rent supplements, 555 local authority mortgage supplements and 2,763 other mortgages.

Deputy J. Higgins

Is there any information as regards the number of landlords those moneys were paid to in 2004?

Mr. Purcell

I do not have that among the statistics, but I believe it is included in the report I completed last month on the rent supplements, as referred to earlier by the Chairman. It goes into that in some detail. This is somewhat like Hamlet without the prince.

Deputy J. Higgins

This report has not been published as yet.

Chairman

That was what I was requesting, earlier, from the Secretary General, so that the committee could discuss it before the summer recess.

Deputy J. Higgins

I put it to Mr. Hynes that people find it incredible that we shovelled a massive €325 million in 2004 — and I imagine the figure is even greater now — into the hands of the private landlord industry for people who were unfortunate enough not to be able to afford a home, instead of providing homes from those and other funds. Is there not an enormous failure of policy or systems here?

Mr. Hynes

We are responding to need as we find it. If people require assistance to meet their rent costs, the scheme is there to assist them. Whether the State should be involved more extensively in the provision of direct housing is a wider issue that I would not like to get into. Nonetheless, the scheme that has been given to us under legislation is the one we operate. The numbers of people qualifying for rent assistance, have been increasing, as the Deputy said. We respond as effectively as we can to the demands as they arise.

Deputy J. Higgins

Does Mr. Hynes have the figures for 2006?

Mr. Hynes

At the end of 2005 there were 60,000. The number went up from 57,000 at the end of 2004 to over 60,000 at the end of December 2005. Those are the latest figures available. Expenditure in 2005 amounted to €671 million.

Deputy J. Higgins

Was that for rent?

Mr. Hynes

That was the total figure. I will have to get the figure in respect of rent for the Deputy.

Deputy J. Higgins

I assume the figure will have gone up appreciably from €325 million in 2004. There are overarching responsibilities in terms of the Departments involved. However, the fact that the State has opted to finance the rents of 57,000 unfortunate people or families priced out of the housing market and plunged into the private rental market greatly increases demand and allows landlords to rack-rent even worse than previously, thus causing the taxpayer to provide more funding. Is a massive, radical and rapid change of direction not needed in favour of providing tens of thousands of homes, appropriately designed, for the people now at the mercy of private landlords, and for the future relief of the taxpayer who is also at their mercy?

Mr. Hynes

That is a bigger question than I am qualified to debate with the Deputy. It may well be that the provision of housing directly by the State would be more expensive than the policy of assisting people with private rented accommodation. I do not know. That must be looked at in a much more detailed manner. However, that is the approach we have. We try to develop a close working relationship with the Department of the Environment, Heritage and Local Government and the local authorities in the implementation of the rent supplement arrangements.

A scheme operates whereby anyone who has been on rent supplement payments for 18 months becomes the responsibility of the housing authority, which will make whatever arrangements are deemed appropriate. Basically, the rent supplement scheme should be, and is, dealing with short-term accommodation needs. Once the person develops a longer term housing need he or she becomes the responsibility of the housing authority — to provide whatever arrangements suit, whether public housing or some other form of assisted provision.

Deputy J. Higgins

That is simply a bureaucratic decision. This indicates for the future that the amount the Department of Social and Family Affairs pays in rent supplements will lessen. Consequently, the moneys paid by local authorities will increase dramatically, as responsibility is shifted. Is that not the position?

Mr. Hynes

That should be the net result of this approach. The argument is that the problems of people with long-term housing needs should be addressed by the housing authorities. That is the basis on which this new scheme has been introduced.

Deputy J. Higgins

It smacks of an exercise designed to take the bad look off the massively growing amounts that private landlords are getting and to disperse it among the local authorities makes it look somewhat better. Unfortunately, however, the net problem of tens of thousands of people without a home remains. It is being dealt with ineffectively. If I were the head of a Department responsible for this level of funding, I would have a hotline to the Department of Finance and the Department of the Environment, Heritage and Local Government to resolve this issue by constructing homes, rather than fattening up already bloated landlords.

Chairman

That is a policy issue. I am not disagreeing with the Deputy, but he is making a policy proposal which falls outside the remit of the committee.

Deputy J. Higgins

I will move on. The recorded redundancy and insolvency payments totalled €148 million. Did part of this cover a payment to Irish Ferries in 2004 for alleged redundancies to get rid of permanent trade union workers on the MV Normandy between Ireland and France?

Mr. Hynes

Payments under that scheme are the responsibility of the Department of Enterprise, Trade and Employment and I do not have details of them. Our only function is to be responsible for the financing of the scheme from the social insurance fund.

Deputy J. Higgins

When a company releases hundreds of workers and alleges they are redundant, this indicates to most that the operation is finished. However, in this case the operation has continued, funded by the State and with severely exploited migrant workers. Is that not a matter for the Department of Social and Family Affairs?

Mr. Hynes

There is legislation in place dealing with redundancy payments which is operated by the Department of Enterprise, Trade and Employment. The only responsibility of the Department of Social and Family Affairs lies in the collection of contributions and the funding of the scheme. We have no responsibility in the implementation of the legislation.

Deputy J. Higgins

If some unfortunate social welfare recipient was to spin the same yarn as Irish Ferries and received €1 million, I am sure the Department would be in hot pursuit for fraud.

The pensions system is the subject of considerable discussion. Is the policy with which the Department is obliged to work one that places all of the responsibility on individual workers to make private pension arrangements? Was that the exclusive policy given to the Department in view of the pensions crisis for older people?

Mr. Hynes

The main responsibility of the Department lies in the payment of old-age contributory and retirement pensions which are funded from the social insurance fund. We carry out periodic actuarial reviews of the fund, making whatever decisions need to be made on the viability of the fund in the long term. The age profile of the population will change in the coming years and the pressure exerted on the pensions system will be greater. The Department is also responsible for the Pensions Board which reports to the Minister. The board was set up to report on and regulate the provision of private pension schemes in addition to social welfare pensions. There is a debate taking place on future private pension provision, the level of support to be given by the State and the pension provided by the social welfare system.

Deputy J. Higgins

Is it not highly unsatisfactory that a solution to a perceived problem is to force workers to pay into funds from which highly profitable insurance companies will take a significant slice each year? An overall public insurance scheme would be better, under which every worker would be entitled to their dignity and comfort at a certain age. I am extremely concerned about the current propaganda campaign that undermines the idea that workers should feel justified in expecting to be able to retire at a reasonable age and in reasonable comfort. They should be allowed to retire in dignity by benefiting from a public pension arrangement, rather than feeling uncertain about their future.

Mr. Hynes

There have been substantial increases in social insurance pensions in recent years. There is an issue about the funding of such pensions in the future. The actuarial reviews being carried out are designed to enable the Government to make whatever decisions need to be made for their future funding. The ratio of the numbers at work to the numbers over pensionable age, which currently stands at 4.3:1, will be 2.7:1 by 2026. It is estimated that it will be 1.4:1 by 2056. Therefore, the funding of social insurance pensions will present a major challenge. Whether additional pension provision is to be made through the State or the private sector is a wider policy issue. For the Department, the main concern is the future funding of the social insurance system. If the ratios change in the manner outlined, the consequences for the level of social insurance contributions will be severe. This issue will face future Governments.

Deputy Curran

I welcome Mr. Hynes. He was here in March and is back today because at the time the accounts for the social insurance fund were not available to the committee. They play a key role as significant figures are contained therein. While there is nothing wrong with them and they stand up perfectly, interesting questions arise. When I considered this issue, I was conscious that 15 months after year end, when Mr. Hynes appeared before the committee in March, we did not have the accounts. One of the first notes in them states it is not possible to provide an accurate breakdown of PRSI contributions until data for the year have been fully analysed and that the full data for 2004 will not become available for analysis until the middle of this year. Why is there such complexity? Why is it taking so long to produce the accounts and, subsequently, an analysis of PRSI contributions? Eighteen months seems a long time.

Mr. Hynes

We had an issue with the non-availability of the accounts at the last meeting. They are normally produced during the following year. For example, the 2004 accounts were produced in 2005 and audited during that year. The reason the accounts were not available was that we had not made the appropriate arrangements in time. That was an issue for the Department which I hope will not arise in the future.

The collection of contributions is carried out by the Revenue Commissioners on our behalf. Eleven rates of social insurance contributions are payable. There are also different earnings limits and thresholds for the payment of different types of contributions. Reconciliation by Revenue and the Department takes some time after the end of the year. Bearing in mind that contributions for the self-employed are only submitted during the course of the following year and may not be finalised until close to year end, it takes——

Deputy Curran

Mr. Hynes indicated a period of 18 months. Is he satisfied with this period or is an effort being made to reduce it?

Mr. Hynes

It is not something we have considered. There is a regular transfer of funds from the Revenue Commissioners and the social insurance fund continues on that basis. The reconciliation of figures is a separate exercise. It is not an issue we have taken up with Revenue at this point. At the end of the day, the reconciliation takes place and the correct figures are calculated.

Deputy Curran

I have no doubt that is the case. However, I would like to have it done closer to the relevant period. I take the point on self-assessment contributions being made at different times but 18 months seems a long time.

Before I move to more general issues, I wish to refer to the issues of redundancy and insolvency. The balance in the accounts on 1 January 2004 was €60 million. I was interested to note that for the past two years no amounts were written off and that there was no bad debt provision. Is that a policy of the Department? Some companies have been liquidated. It should be known through court records that there may be no chance of recovering funds. Is anybody investigating these cases? My concern is that this figure will grow over a number of years and that in five years there will be a general policy to write off X millions of euro. Should this be analysed on an annual basis?

Mr. Hynes

I will ask Mr. Doyle to address that issue.

Mr. John Doyle

The Department of Enterprise, Trade and Employment has responsibility for this aspect of expenditure from the social insurance fund. The Secretary General of that Department completes a financial statement on the account for that aspect of the fund and presents it to the Department. The operation of the fund is entirely a matter for that Department.

Deputy Curran

It may well be but it appears in the accounts for which the Department of Social and Family Affairs has responsibility. The amount is growing year on year because there has been no bad debts provision and no amounts have been written off. Will this continue forever and will the amount grow and grow? Is the Department dealing with the Department of Enterprise, Trade and Employment to ascertain what companies have been liquidated in the courts leaving no remaining assets? There must be a practical way of doing this. It does not seem a good way of running an account.

Chairman

I call Mr. Purcell.

Mr. Purcell

I have sympathy for the Accounting Officer of the Department because it is not a matter within the Department's remit. As the Accounting Officer stated, the Department funds the scheme and accounts for the payments. We audit a separate account which is now encapsulated by the social insurance fund. At one stage it was a separate account presented to the Houses of the Oireachtas but is now amalgamated under law with the social insurance fund.

I can identify with the Deputy's view. We raised this issue with the Department of Enterprise, Trade and Employment. It is more or less an accounting matter but the Department stated — I hope I quote it correctly — that it was too busy dealing with the volume of claims to examine particular debts which dated back a number of years where employers had defaulted on making their contributions. In many cases, as the Deputy noted, the firms in question were liquidated and there would be no earthly possibility of the money being paid.

Deputy Curran

My concern is that there is a large number of cases, some historical, but nobody takes on the challenge of trying to deal with those where moneys may be recoverable. I realise the fund comes under a different Department.

Mr. Purcell

What I did not say is that the Department did not go after the recoveries. Note 8 refers to recoveries of €4.5 million under the redundancy scheme and €6 million under the employers insolvency schemes. The Department does go after employers but does not do the tidying up in accounting terms. That is often a feature in dealing with clients because the Department does not see this aspect as important. When one sees it in black and white in the accounts, it looks very stark but that is misleading because the Department will not collect anything like €62 million. I would not like to hazard a guess as to what the final figure might be. However, it does not impact on the social insurance fund because companies are not shown as debtors in the balance sheet. Perhaps that is why so little priority or attention is given to the issue.

Deputy Curran

The Comptroller and Auditor General can foresee the headlines when that sum is written off in five or ten years.

I was interested in a comment made by Mr. Hynes in his opening statement that employer inspections were carried out by the Department. Will he explain this? He went on to state that the Department had a general inspectorate and a special investigative unit. How big are they and how many investigations do they carry out? What have been the findings of their investigations? Have employers in general been compliant or is there a particular weakness?

Mr. Hynes

As the Deputy stated, we have two inspection units. One is the general inspectorate which carries out general inspection functions such as means-testing. It is also responsible for ensuring fraud is highlighted. As part of its work, it visits employers from time to time to examine their records; to ensure the correct rate of PRSI contribution is being paid, and to ensure end-of-year data are being returned to Revenue and, in that context, to detect fraud or whatever other issues arise. In addition to the role of the general inspectorate, in which approximately 370 people work, we have a special investigation unit of 45 people, which focuses entirely on the control and investigation of fraud. As part of their work, they also carry out inspections of employers.

Deputy Curran

By inspection of employers, does Mr. Hynes mean that such officials physically visit premises?

Mr. Hynes

Yes.

Deputy Curran

How many such inspections are carried out each year?

Mr. Hynes

Approximately 7,000.

Deputy Curran

Very well. I have questions in respect of two further general areas. Earlier, Mr. Hynes referred to the complexities of increased computerisation in light of the existence of various different schemes that were not linked up. Did he suggest that a person could be in receipt of payments to which he or she is not entitled?

Mr. Hynes

I did not suggest that. In many cases, we are obliged to operate manual systems because the entire system is not fully computerised in a unified manner. However, I did not try to suggest that anyone would receive double payments.

Deputy Curran

However, because of the manual system, it might be slower and——

Mr. Hynes

Yes. It is also more difficult and time-consuming. The issue of overpayments was under discussion. It would be much more efficient to gather all overpayments together. Consequently, if people had received overpayments under a number of different schemes, the Department could make appropriate arrangements to control and recover them.

Deputy Curran

As for the roll out of the new scheme, when does Mr. Hynes envisage a complete end to the manual system?

Mr. Hynes

A new service delivery and modernisation programme is being rolled out. As already stated, it has recently been extended to the contributory pensions area. Previously, it was introduced in respect of child benefits. It is difficult to set an exact finishing date for the programme because such matters always take longer than one anticipates. One problem is that the social welfare system is extremely complex. The rules and regulations of schemes are quite complex and difficult to computerise. Hence, we wish to have in place a common system for all schemes within the next few years in order that people may approach the Department in a consistent manner and be dealt with in a common fashion. In that context, the overpayments and debt management system will permit a unified examination of people's situations with regard to overpayments.

Deputy Curran

On the previous occasion on which Mr. Hynes appeared before the committee, the issue of the family income supplement was discussed. He indicated, and all members concur, that a significant number of people who are probably entitled to the supplement do not appear to claim it for one reason or another. I have two specific questions. Does the Department have any estimates as to the numbers of people who may be entitled to the supplement but who do not claim it? Second, on the previous occasion on which he appeared, Mr. Hynes stated the Department would try to promote the supplement and make people aware of their entitlements. Will he comment on these two points?

Mr. Hynes

If memory serves, approximately 17,000 people are in receipt of family income supplement. Various estimates have been carried out on the potential number——

Deputy Curran

In the Department.

Mr. Hynes

And outside it. However, it is difficult.

Deputy Curran

What do such estimates show?

Mr. Hynes

From memory, the most recent figures I have seen suggest that some 30,000 families that may be entitled to family income supplement do not claim it.

Deputy Curran

They do not claim.

Mr. Hynes

Apparently not. However, any such estimates are always difficult. In fact, the most recent estimate was for 35,000 families.

Deputy Curran

In other words, for every family that manages to receive family income supplement, potentially there are two other families that are entitled to it but that do not receive it.

Mr. Hynes

Yes. That figure is derived from an examination of income levels across the economy and is a possibility. However, the Department has mounted a major publicity campaign in recent months to try to increase the numbers or to ensure that people are aware of the possibility of claiming family income supplement. Moreover, when Revenue contacts people regarding their tax situation, it brings the existence of family income supplement to their notice. Hence, we have tried, in so far as is possible, to ensure that people are aware of the scheme's existence. However, the lack of take-up has always been an issue with regard to family income supplement. On the basis of the overall data on income and earnings levels across the economy, there appears to be a problem as regards people not taking up their entitlement. However, we are uncertain as to whether this is the case.

Chairman

Does Mr. Hynes recall the furore that arose regarding the fact that citizens of European Union accession countries were entitled to claim child benefit for children who remained in their countries of origin? At that point, it appeared that exaggerated positions were adopted. Can Mr. Hynes provide the committee with an update in this regard?

Mr. Hynes

As the Chairman is aware, under EU regulations in respect of social security for migrant workers, any person from an EU country who works here, whether it be an accession country or otherwise, is entitled to child benefit regardless of whether their children are here or remain in the home country. The numbers of people from the accession countries who claim child benefit has increased recently. I ask the director general, Ms Bernadette Lacey, to comment further.

Ms Bernadette Lacey

At the end of last year, the numbers claiming amounted to approximately 80 per week. At present, the figures are in excess of 300 per week. The numbers appear to have risen due to the publicity that was generated earlier this year, as well as to some public information announcements relating to entitlements in countries such as Poland. These people who now claim their entitlements were unaware——

Chairman

Are there 300 claimants or 300 children?

Ms Lacey

There are 300 claimants in respect of family benefit.

Chairman

How many children are involved?

Ms Lacey

While the average approximates to two children per family, I must check the figure.

Deputy Burton

I will begin with a general question. The fund now stands at €1.9 billion. Has the Department carried out any risk assessment in respect of it?

Following on from the Chairman's question, on the previous occasion on which Mr. Hynes came before the committee, he provided figures for the number of PPS numbers issued to workers from other countries who have come to Ireland. Will he indicate the current figure? What are the principal countries from which foreign workers come to work in Ireland? Such foreign nationals have been paying contributions for a year or so. Hence, I assume they have begun to build up entitlements in the social welfare system. Can Mr. Hynes provide the committee, if the relevant statistics are available, with a profile of the claims, if any, made by foreign nationals working in Ireland?

Mr. Hynes

As for workers from the accession countries, the European Union was extended in May 2004. A total of 210,000 PPS numbers have been issued since then to people from the accession countries. People from the accession countries are not claiming on the basis of social insurance contributions to a significant degree because they would not, as yet, have established an entitlement.

People are also coming to Ireland from countries outside the EU. The only figure I possess is that relating to the total number of PPS numbers issued in 2005, which was 271,000.

Deputy Burton

So 271,000 PPS numbers were issued to non-Irish nationals.

Mr. Hynes

This figure includes 80,000 PPS numbers issued to Irish people. In 2005, the overall figure for foreign workers would have been approximately 200,000.

Deputy Burton

It will presumably take three to five years of contributions for a foreign national who comes to Ireland to work and pays into our system to build up a right to claim, should he or she become unemployed or fall ill. Is it not the norm that in order to be fully part of the system, a person would need 18 months contributions and that the period in respect of some benefits is even longer?

Mr. Hynes

That is correct. However, there are arrangements under EU regulations which might enable a person who has paid insurance contributions in his or her country of origin before he or she came to Ireland to use these contributions to qualify for benefits here. The person's insurance contributions in his or her country of origin can be combined with the insurance contributions he or she has paid in this country.

Deputy Burton

Has the Department carried out a risk assessment? For example, if an economic downturn took place in this country and, God forbid, we experienced some level of unemployment, how many unemployment claims would it take to tilt the system back into deficit? We are currently paying €500 million in unemployment benefit and €1 billion between invalidity benefit and disability benefit. What would it take in terms of numbers or an increase in unemployment, disability or invalidity benefit to push the system from surplus into deficit? Has the Department carried out such a risk assessment?

Mr. Hynes

The short answer is no. We arrange for actuarial assessments of the social insurance fund every few years but we have not carried out the type of analysis to which the Deputy refers. The main focus in the actuarial review would be on the long-term payments and pensions and the capacity of the system to deliver those payments in the long term.

Many of the people who come to Ireland and apply for PPS numbers are working and building up entitlements under the system. Obviously, a number of them stay here for a short period and return to their home countries. People are undoubtedly building up entitlements under the system. It is difficult to predict the extent to which they will use these contributions to claim benefits in the future.

Deputy Burton

My next point relates to liable relatives and payments to lone parents. If someone is raising a child on their own and the other parent and former partner has means but, possibly due to conflict in the relationship, the lone parent does not wish to pursue the other parent — typically the father — for payment, it is possible for the lone parent to sign a waiver of sorts, called a liable relative agreement, with the Department. Under this scheme, the Department acquires the right to pursue the parent who is earning but who is not contributing financially to the child's care. I am aware that this is a delicate and difficult area but can Mr. Hynes tell us more about the Department's success in pursuing parents who are not responsible for looking after children but who are morally responsible for financially contributing to their upkeep? Has the Department made any progress in this area and what steps does it take to ensure that, for example, an absent father contributes to the upkeep of his children if he has means?

Mr. Hynes

As the Deputy stated, there is a liable relative provision in the legislation. When people claim one-parent family payment, they are required to make efforts to obtain maintenance from their spouse or partner before they can qualify for payment.

Deputy Burton

Is this arrangement not time-based?

Mr. Hynes

Yes.

Deputy Burton

So a person is not required to show that he or she has tried to obtain maintenance; it is simply a matter of a certain period elapsing.

Mr. Hynes

A lone parent is required to make efforts to seek maintenance and the Department will only intervene and guarantee payment of income to him or her if he or she does not succeed in obtaining maintenance. The Department effectively takes on the risk of getting maintenance from the other parent. We have guidelines concerning the amount that is appropriate for people to contribute where a lone parent is receiving one-parent family payment and another parent is involved. We have power to seek that amount from the absent parent.

In 2005, determination orders were issued in approximately 2,500 cases. In some cases, no contribution is due from the other parent because he or she is receiving a social welfare payment. The direct contributions we received from absent parents in 2005 amounted to approximately €2 million and €1.8 million in 2004, which is the year under discussion.

Deputy Burton

How many absent or separated parents make no contribution to their children's upkeep? Many people receive different types of one-parent family payments. How many parents make a monetary contribution to their children's upkeep?

Mr. Hynes

The majority of absent parents do not contribute to their children's upkeep. In terms of those we are able to assess regarding maintenance contributions and the total number of lone parent payments we make, 2,000 contribute on an ongoing basis to their children's upkeep.

Deputy Burton

How many people receive the various kinds of one-parent family payment?

Mr. Hynes

Approximately 80,000 people receive one-parent family payments.

Deputy Burton

So 2,000 out of 80,000 people contribute to their children's upkeep?

Mr. Hynes

One must take account of the extent to which absent parents may be in receipt of social welfare payments and their inability to make a financial contribution to their children's upkeep.

Deputy Burton

I seek the Chairman's guidance. I understand that if one has a local authority house and is in receipt of a social welfare payment, the local authority sets a rent of at least €23 per week. That is the figure in my area. Is the lack of a contribution from an absent parent on a social welfare payment a policy decision? I do not want to stray into the area of policy, but it is important that both parents have stakes represented by contributions, particularly if they are on low incomes, as would be the case were they in receipt of social welfare payments. We accept that such people pay rent and bills in respect of electricity, gas, TV licences and TV services. Is this a policy decision taken by the Government or is it an administrative decision due to difficulties? Does the Department require additional legislation to empower it? Local authorities can charge for rent and utility providers can charge for utilities.

Mr. Hynes

If an absent parent is in the social welfare system, he or she is receiving a single person's payment. The extent to which such a person could contribute to the other lone parent in question is an issue. There is a limit to how much money we can take from that person.

As far as liable relatives are concerned, our main focus is on people who are in employment and in a better position to contribute toward the payment. We ensure that the lone parent with the child receives his or her payment. We try to seek out the other parent as much as possible.

Deputy Burton

Regarding fraud in the building industry and the use of sub-contractors' certificates, the Department has a service level agreement with the Revenue Commissioners. How does the Department ensure that employees are registered as such rather than as sub-contractors and that they pay the appropriate level of social insurance? There must be tens of thousands of young workers in the building industry operating on sub-contractor certificates. If they are injured or enter a period of unemployment, they have no entitlements because they have made no significant or proper PRSI contributions. Is this a concern in respect of the fund and claiming social welfare assistance?

Mr. Hynes

That has always been an issue, particularly in the building industry where the distinction between being an employee, self-employed or a contractor is often marginal. I referred to the Department's scope section in my opening remarks. It is responsible for determining whether a contract of service is in operation in an individual case. If people have issues, they can apply to the Department for a determination that is legally binding on the employer.

We work closely with the Revenue Commissioners in this regard, as they encounter similar issues in respect of employment and self-employment. However, it is a difficult matter. It is often an advantage to an employer to use self-employed people instead of paying the full social insurance contribution in respect of employees. Various arrangements are made to ensure that people are one thing rather than another. The Department tries to ensure that where there is a genuine employment relationship, the correct contribution is made.

Chairman

I understand that the Revenue Commissioners are targeting the building industry and these issues in their systematic examination of sectors of the economy this year. Is the Department of Social and Family Affairs providing additional resources to ensure compliance?

Mr. Hynes

We work with Revenue in this regard. Our investigators ensure that a proportion of their work is focused on the construction industry. Of the 7,000 investigations carried out this year, 20% are in the construction sector. The answer to the Chairman's question is yes.

Chairman

What percentage of the social insurance fund is dedicated to the payment of contributory old age pensions, retirement pensions and the free schemes automatically run for persons on pensions?

Mr. Hynes

In 2004, €2 billion of the social insurance fund's overall expenditure was spent on pension provision and associated services, such as the free schemes.

Chairman

What percentage of the total does that represent?

Mr. Hynes

Of the total €5.3 billion spent by the fund, some 40% was spent on pensions.

Chairman

Mr. Hynes signalled that the Department is concerned about the sustainability of the pay-out as the number of people eligible for pensions increases as a proportion. He referred to periodic actuarial studies. What do the most recent studies reveal?

Mr. Hynes

The most recent study was published in 2002 and made predictions in respect of the period ending 2056. Working on a number of assumptions, the people involved tried to forecast how the fund will perform in that period. Assuming that pensions increase in line with inflation, the projection was of a sustainable fund. If, however, one assumes that pensions increase in line with earnings, the situation changes and the fund goes into a deficit. Assuming that there are no changes in contribution rates, the study was able to predict when the fund would go into deficit.

Chairman

Does Mr. Hynes have those figures with him? When would the deficit occur?

Mr. Hynes

From memory, the prediction in 2002 was for 2015. Factors have changed in the interim and a new projection must be made. We will shortly go to the market for a new actuarial review in light of the current position, that is, increases in pension rates and the ongoing changing profile of the population.

Chairman

Birth rates are increasing.

Mr. Hynes

Yes. The number of pensioners will also increase.

Chairman

The number of young immigrants is increasing significantly.

Mr. Hynes

That is another factor.

Chairman

The Department is not sure where it stands in terms of the dependency ratio.

Mr. Hynes

No. We need advice on what will be the likely position.

Chairman

Mr. Hynes said that the Department will go to the market. What are the general terms of reference of the consultancy study to be commissioned?

Mr. Hynes

We must decide on the assumptions to be made in examining the future prospects of the social insurance fund.

Chairman

Is the Department considering child benefit, as well as pensions?

Mr. Hynes

We are considering the social insurance fund, including pensions and other payments made from it.

Chairman

The surplus of €2.8 million is invested with the authority of the Minister for Finance. Is the NTMA dealing with this?

Mr. Hynes

Yes.

Chairman

Is it investing in cash products or products that can be translated quickly into cash? Is it investing in a manner similar to the pension fund where payments are made every year?

Mr. Hynes

We have not had a surplus for many years. In the initial years a conservative approach was taken towards investment. Discussions have taken place between the Department of Finance and the NTMA on appropriate investment strategies, depending on the extent of the surplus. It is possible there will be a wider range of investments, including more long-term investment strategies.

Chairman

Does the Department of Social and Family Affairs have an input into these discussions?

Mr. Hynes

We are consulted by the Department of Finance but the decision to be made is a matter for the Minister for Finance.

Chairman

Is the Department given returns on an ongoing basis?

Mr. Hynes

They are available. The Department of Finance receives returns on a regular basis.

Chairman

Briefly, what is the view of the Department of Finance?

Mr. Quigley

Consideration is being given to changing the arrangements. This matter is still being discussed by the Department and the NTMA. We are conscious of the fact that surpluses are much greater than before and that there is a need to have a certain portion of the money available immediately. We are considering long-term strategies which were not a prospect up until a few years ago. The discussions have not yet been completed. We seek to give the NTMA as much flexibility as possible on condition that, if certain changes take place, sufficient funds will be available to meet the immediate needs of the fund.

Chairman

Does the Department of Finance rely solely on the actuarial assessments of the Department of Social and Family Affairs or does it undertake independent studies of the sustainability of the fund?

Mr. Quigley

We rely on the actuarial reviews, in respect of which there is a statutory requirement that they be completed within a certain period. We will be going to the market relatively shortly and the idea is to have a review prepared and published next year. The matter must be kept under review because demographic forecasts have changed considerably in the past few years. Actuaries now forecast much longer life expectancy, a factor that must be taken into account.

Chairman

Is an increase in the age at which one becomes eligible for a pension being considered?

Mr. Quigley

Yes, increasing the age is one of the ideas being considered for Government policy on pensions.

Chairman

Did the Department have an input into the recent census to collect information on this issue?

Mr. Quigley

I am not aware of any input by the Department. The details of the census would have been approved at Government level. The CSO would have asked Departments if they wanted to raise any questions. I am not aware of any details proposed by the Department of Finance. None was suggested with regard to pensions.

Chairman

Other Deputies and I have occasionally come across overpayments by the Department of Social and Family Affairs. The sums involved are significant. I am aware of one case where the overpayment was €30,000. Other instances involving payments in excess of €10,000 have been brought to my attention. Arrangements are made to repay the money in modest instalments, although these may be onerous in terms of the amount drawn down by individuals. Why is a red flag not raised by the Revenue Commissioners when someone is working and claiming social welfare benefits? How can overpayments continue for ten years without anyone noticing? When the Department discovers an overpayment, it is benign. It does not seek to take people to court or to have them jailed. It is a difficult matter with which to deal because when poor people have a liability of €30,000, they are not capable of paying it back, regardless of the circumstances that led to the overpayment. I cannot understand why an overpayment is not flagged in the early months rather than years later.

Mr. Hynes

This issue has been raised a number of times at this committee.

Chairman

Assurances were given, especially by the Revenue Commissioners, that matters would improve.

Mr. Hynes

We receive information from the Revenue Commissioners on a regular basis. Overpayments on unemployment schemes are unlikely to continue at the level to which the Chairman referred because the Department is notified by the Revenue Commissioners when someone commences employment. We can then investigate the matter promptly, preventing people from working and claiming benefits. The large overpayments tend to occur on long-term schemes, particularly the lone parent allowance scheme. Some years ago we examined information received from the Revenue Commissioners to assess our ability to process the issue quickly. Although a number of years had passed, we could determine where people had been overpaid and the amount involved. If we could operate more quickly, overpayments would not occur to the same extent. We are working towards achieving this. Those in receipt of social welfare payments have an obligation to inform the Department if their circumstances change such as commencing employment or an increase in earnings. The Department can then take action immediately and prevent the payment from being made.

Chairman

The Department becomes aware of this when people commence employment. If they move from receiving benefits to self-employment, it does not notice as quickly.

Mr. Hynes

We should also receive information from the Revenue Commissioners in those cases, although not as quickly as when people move from receiving benefits to employment.

Deputy Boyle

I have a few questions on the social insurance fund. Has an historical record been taken on whether the amount of Exchequer contributions to the fund made during the history of the State is in deficit or surplus, given the size of the surplus? Traditionally, the fund has been in deficit.

Mr. Hynes

As the Deputy stated, the fund has only been in surplus since 1996. Before that date, from 1952, it was always in deficit. When the scheme started, the traditional position was that employers, employees and the Exchequer each funded one third of the benefits payable. I do not have the figure for the total amount of the Exchequer contribution to the fund since 1952. We are a long way from having an overall surplus. If one examines the deficits during those years against the surpluses we now have and takes inflation into account, one will find that the contribution made by the Exchequer is substantial.

Deputy Boyle

I asked out of curiosity as much as anything else.

Mr. Hynes

I can get the information.

Deputy Boyle

That is appreciated. The 2004 accounts for the fund were not completed the last time departmental officials appeared before the committee. Is there an approximate date by which the 2005 accounts will be prepared?

Mr. Hynes

I hope the information will be available to the committee much sooner next year than this year. We will complete our work on the 2005 accounts towards the middle of the year. The accounts must then be audited by the Comptroller and Auditor General. Once that is done, we will have them translated and presented. All going well, they will be available well before the end of the year.

Deputy Boyle

I have a couple of brief questions on the draw-downs from the social insurance fund. The cost of the free schemes for 2003 and 2004 amounted to approximately €172 million. Of this amount, €90 million was the cost of the schemes related to electricity and fuel use. Until this year's budget, when there was an increase, those schemes did not keep pace with fuel inflation. If the 2004 figure for the free schemes relating to fuel and electricity was approximately €90 million, what are the figures for 2005 and 2006?

Mr. Hynes

I do not have those figures immediately available. Perhaps Mr. Doyle has them.

Mr. Doyle

A provisional figure is available when we have prepared the accounts. As the Secretary General stated, we will finish drafting the accounts in approximately two weeks. We will have the figure at that stage.

Deputy Boyle

I ask on the basis that the figures will increase in the coming years if the Department proposes to keep pace with inflation. The redundancy and employers insolvency schemes are administered by the Department of Enterprise, Trade and Employment but the payments come from the social insurance fund and I do not know whether questions can be answered on the matter. The spending figure for 2004 was €147 million but employers were able to claim back a further €62 million. However, on the next page the cost of administrating the schemes, on which approximately €210 million was paid out, is stated as €191 million. It seems an extraordinarily high administration cost. Is Mr. Purcell in a position to answer that question?

Mr. Purcell

The total administration cost for the social insurance fund is €191 million.

Deputy Boyle

They are the two sections.

Mr. Purcell

The element in respect of the the redundancy and employers insolvency schemes is €2.5 million.

Deputy Boyle

That is not how it is presented. It has sections 8 and 9 and then 10. It seems to follow through from the other section.

Mr. Purcell

Perhaps it is an issue with presentation. It is Note 10 in the account and referenced as such.

Deputy Boyle

As Secretary General and Accounting Officer, is Mr. Hynes satisfied with the €191 million cost of administering the social insurance fund?

Mr. Hynes

We are always conscious of the responsibility to keep administration costs as low as possible. Salary costs for the staff of the Department who administer the social insurance schemes account for the bulk of the expenditure. Payments are due to An Post which make payments for us and to Revenue for the collection of contributions. Postage, telecommunications and accommodation costs are the other main elements. We try to keep a close watch on our administration costs and I am satisfied we do not over-spend under that subhead. We are subject to Government limits on staffing requirements. We operate as efficiently as we possibly can within those constraints.

Deputy Boyle

My final question is on current expenditure in the overall accounts of the Department. Recent press reports stated that on foot of recent publicity, the numbers of foreign nationals applying for child support payments had increased from 80 to 350 a week. Will such requests level out at this figure, or does Mr. Hynes anticipate a further increase?

Mr. Hynes

It is difficult to predict what will happen. We felt that following the publicity earlier this year, there would be an increase in the number of claims and that is what happened. However, there is no reason to think claim numbers will increase substantially beyond this.

Deputy Boyle

Does it amount to €15,000 or €17,500 a year?

Mr. Hynes

Based on 300 claims a week, the figure for the year will be €15,000. A great number of checks must be made in cases where families have returned to the country of origin. We must establish entitlement on the basis that the facts as presented to us are correct. This can take a number of months, particularly where we deal with other EU countries, depending on how quickly they can process requests for information. It is difficult to predict what the net outcome in terms of valid claims will be. That is the current position.

Mr. Purcell

I will tidy up a few matters. Of the €191 million in administration expenses, approximately €140 million is attributable to the Department, €21 million is payable to An Post, while approximately €30 million is payable to the Revenue Commissioners to cover their expenses in collecting PRSI. Historically, a formula was applied to the overall expenditure of the Department but, although occasional reviews are conducted, the figure is not particularly precise in that not every job is costed to determine whether it involves a fund or Vote matter.

On the timeliness of the account and the presentation of the 2004 accounts to the committee in 2006, I appended my audit certificate just before year-end. That represents a significant improvement over the situation which obtained a few years ago. With the co-operation of the Department, we have brought the accounts more or less up to date. The audit is completed within one year after year-end and that period of time could be further reduced with the help of the Department. We have received a lot of co-operation in addressing arrears.

While the insurance fund had a legal identity in the past, surpluses were regarded for all intents and purposes as support for the Exchequer. In the 1990s, the investment account was used to deal with temporary surpluses on a day-to-day basis. Typically, surpluses would be transferred for a day or two to the Department of Finance and used as ways and means and as a form of borrowing for the Exchequer. At one stage, no interest was paid on that money. A more recent manifestation of this was in 2002, when the Minister for Finance appropriated a few hundred million euro for the Exchequer because it was available and he was entitled to do so. It seems that the view now being taken of the social insurance fund is that it should meet the purpose for which it was originally designed but was never operated in that way in practice.

Deputy Burton referred to maintenance payments. In my report of three or four years ago, I included a chapter on this issue because the position then was very unsatisfactory. While there has since been a marginal improvement, a strong public campaign followed by real action would be needed to rectify the problem. Even allowing for the Accounting Officer's claims about absent parents who are not good marks for maintenance contributions because they are on social welfare benefits, if I understand the figures correctly a comparison between the 80,000 who do not contribute and the 2,000 who do, indicates that meaningful improvement will not be made without a concerted campaign. Such has been the experience in neighbouring jurisdictions. It is not a uniquely Irish problem.

Chairman

I thank Mr. Purcell. I propose that the committee should note Vote 38 and dispose of the social insurance fund for 2004. Is that agreed? Agreed.

I propose that the agenda for our next meeting on Thursday, 25 May 2006 will be as follows: 2004 annual report of the Comptroller and Auditor General and Appropriation Accounts; Vote 35 — Department of Arts, Sport and Tourism; and chapter 9.1, Irish genealogical project. Is that agreed? Agreed.

The witnesses withdrew.

The committee adjourned at 1.45 p.m. until 11 a.m. on Thursday, 25 May 2006.