COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 8 Mar 2007

Social Insurance Fund 2005.

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

Chairman

Witnesses should be aware that they do not enjoy absolute privilege. 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 and 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 or 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 before the committee are made aware of these rights and any person identified in the course of proceedings who is 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 it appropriate in the interests of justice.

Notwithstanding this provision in the 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. They are also reminded of the provisions within 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 welcome Mr. Hynes and invite him to introduce his officials.

Mr. John Hynes

I am accompanied by Ms Bernadette Lacey, director general, who is responsible for the delivery of social welfare services; Mr. Eoin Ó Broin, director with responsibility for the regions and the Department's control programme; Mr. Brian Ó Raghaillaigh, assistant secretary, social welfare services, who is responsible for the delivery of services to working-age customers; and Mr. John Doyle, acting principal officer, who is in charge of the Department's accounts branch.

Chairman

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

Mr. Dermot Quigley

I am from the Department's sectoral policy division and accompanied by Mr. Jim O'Farrell, a member of staff in the Department's organisation, management and training division.

Chairman

I invite the Comptroller and Auditor General, Mr. Purcell, to introduce Vote 38, chapters 12.1 and 12.2 and the social insurance fund 2005.

Chapters 12.1 and 12.2 of the annual report of the Comptroller and Auditor General read as follows:

Overpayments

The Department of Social and Family Affairs administers some 50 welfare schemes paid through Vote 38 and the Social Insurance Fund. Expenditure on assistance and insurance schemes was €6.30bn and €5.46bn respectively in 2005.

Table 37, Table 38, Table 39, and Table 40 outline overall expenditure on various schemes over the period 2001 to 2005, and for the same period, the amounts recorded as overpayments, the amounts of overpayments attributed to fraud or suspected fraud and the Department's cumulative record of recovery since 2001.

Table 37 — Scheme Expenditure

	2001	2002	2003	2004	2005
	€m	€m	€m	€m	€m
Social Insurance	3,517	4,198	4,649	5,081	5,460
Social Assistance	3,983	4,940	5,460	5,821	6,296
Total	7,500	9,138	10,109	10,902	11,756

Table 38 — Number and Amount of overpayments recorded for recovery (Numbers shown in brackets)

	2001	2002	2003	2004	2005
	€m	€m	€m	€m	€m
Social Insurance	6.79 (15,786)	9.72 (23,723)	10.60 (26,174)	12.12 (26,131)	11.02 (22,420)
Social Assistance	19.26 (14,274)	19.41 (15,084)	28.77 (17,459)	44.85 (20,000)	36.24 (17,126)
Total	26.05 (30,060)	29.13 (38,807)	39.37 (43,633)	56.97 (46,131)	47.26 (39,546)

Table 39 Number and Amount of overpayments attributed to fraud or suspected fraud (Numbers shown in brackets)

	2001	2002	2003	2004	2005
	€m	€m	€m	€m	€m
Social Insurance	3.27 (5,321)	4.59 (8,121)	5.07 (9,606)	6.24 (10,771)	5.53 (8,587)
Social Assistance	7.73 (5,350)	7.43 (5,728)	8.88 (7,148)	12.69 (8,483)	13.13 (7,758)
Total	11.00 (10,671)	12.02 (13,849)	13.95 (16,754)	18.93 (19,254)	18.66 (16,345)

The amount of overpayments attributed to fraud or suspected fraud compared to total overpayments since 2001 is summarised in Figure 4.

Figure 4

The Department's record of recovery of overpayments during the period 2001 — 2005 is shown in Table 40.

Table 40 — Departments record of recovery of overpayments 2001 to 2005

	2001	2002	2003	2004	2005
	€’000	€’000	€’000	€’000	€’000
Overpayments not disposed of at 1 January	64,374	65,452	70,621	85,953	115,993
Overpayments recorded for recovery	26,049	29,130	39,367	56,9671	47,261
less
overpayments recorded in prior years cancelled	(668)	(394)	(381)	(693)	(1,826)
sums recovered in cash	(9,873)	(8,892)	(10,397)	(11,506)	(11,246)
sums withheld from current entitlements	(5,185)	(6,734)	(6,521)	(8,332)	(8,715)
net amounts written off as irrecoverable	(9,245)	(7,941)	(6,736)	(6,396)	(10,217)
Overpayments not disposed of at 31 December	65,452	70,621	85,953	115,9931	131,250

1. Revised

Of the €131,250,158 overpayments outstanding at 31 December 2005 — €34,295,696 dates from 2005; €38,787,682 from 2004; €22,834,566 from 2003 and €35,332,214 from earlieryears.

The Accounting Officer attributed the fall in the number and value of overpayments in 2005 to initiatives taken by his Department to deal with overpayments and combat fraud.

Specific control initiatives undertaken by the Department in 2005, which led to the identification of significant levels of overpayment included

The Lower Back Pain Project

A Disability Allowance mail shot where payments are made using electronic funds transfer

Data-matching exercises involving

Special Investigations Unit in unemployment cases;

And in One -Parent Family (OPF) cases

student unemployment cases

Child Benefit in OPF cases

The General Register's Office data-matching (Marriages and Deaths)

Prosecutions

Cases involving abuse of the system are considered with a view to taking legal proceedings. Prosecutions are taken against employers who fail to carry out their statutory obligations and persons who defraud the social welfare payments system. Prosecutions can either be by summary or indictment proceedings. Civil proceedings are taken to facilitate the recovery of scheme overpayments or the collection of PRSI arrears. Such cases are only taken where it has been established that the debtor has sufficient means to discharge the debt.

During 2005, 412 criminal cases (2004 — 476 cases) were forwarded to the Chief State Solicitor's Office for prosecution as shown in Table 41.

Table 41 — Criminal cases forwarded to the Chief State Solicitor

	2005	2004
Unemployment Assistance	197	191
Unemployment Benefit	53	226
Disability Benefit	19	9
One Parent Family Payments	19	23
Other Schemes	10	10
Offences Committed by Employers	14	17
Total	412	476

A total of 256 criminal prosecutions (2004 – 259 prosecutions) involving social welfare recipients were finalised in court in 2005. The total amount of overpayments assessed in these cases of persons who attempted to or obtained benefits/assistance fraudulently was €1,346,770 (2004 — €1,116,492). The results of these 256 court cases and the penalties imposed are given in Table 42.

Table 42 — Results of Criminal Cases finalised in Court in 2005

	Unemployment Assistance	Unemployment Benefit	Disability Benefit	One Parent Family Payments	Other	Total
Fined	46	56	4	6	4	116
Community Service	3	3	0	0	0	6
Imprisoned	3	1	0	0	0	4
Probation Act	33	41	5	5	1	85
Suspended Sentence	17	5	1	1	0	24
Struck-out	4	2	1	0	1	8
Dismissed	2	0	0	0	0	2
Bound to the Peace	2	0	0	0	0	2
Liberty to re-enter	4	2	1	0	0	7
Decree Obtained	1	0	0	0	1	2
Total	115	110	12	12	7	256

Prosecutions of 15 cases involving employers (2004 – 16 employers) were also finalised with 14 being fined and 1 receiving a suspended sentence.

The number of prosecutions finalised inthe courts since 2001 is summarised inFigure 5.

Figure 5

Between 2001 and 2005, a total of 76 cases were sent to the Chief State Solicitor's Office (CSSO) for the pursuit of civil proceedings. In this period, 66 cases (including 49 pre-2001cases) have been finalised. The breakdown per year is set out in Table 43

Table 43

	2001	2002	2003	2004	2005	Total
Sent to CSSO in the year	14	11	21	17	13	76
Finalised in the year	8	11	14	12	21	66

Of the 66 finalised, settlement was reached in 8 cases without going to court (this involved recovery of €92,868), 2 were finalised in court (decrees awarded), 12 cases were not pursued due to the circumstances of the debtor, 10 cases were statute barred, 34 made arrangements to repay the debts in instalments. There are 78 cases that have yet to be finalised.

Mr. John Purcell

I will start with the Vote and the social insurance fund. Expenditure on social assistance schemes and child benefit is met from Vote 38 and amounted to €6.3 billion in 2005. Expenditure on social insurance schemes is met from the social insurance fund and amounted to €5.46 billion in the year under review. Fund income derives mainly from the PRSI contributions collected by the Revenue Commissioners from employers, employees and self-employed persons. Health contributions and national training fund levies are also collected by the Revenue Commissioners and channelled through the fund but do not form part of its accumulated income. The committee will note that the fund is in a very healthy state, with reserves at the end of 2005 totalling some €2.4 billion, which is an increase of half a billion or so on the position at the end of 2004.

The surplus moneys are paid over to an investment account managed by the Department of Finance. This account is part of the fund account papers before the committee today. Notes 8 and 9 to the account show the position on the redundancy and employers' insolvency schemes.

The administration costs of the Department came in at €294 million for the year, but the charge to the Vote is defrayed by €131 million recovery from the social insurance fund to cover those administration expenses of the fund which are met by the Vote.

Chapter 12.1 gives summary details of the number and amount of overpayments in social assistance and benefits over the five-year period from 2001 to 2005. Up to 2004, there was a general pattern of annual increases for some years in the number of overpayments and their monetary value. This was reversed in 2005 when there was a reduction in the number of people overpaid. The number was down 6,500 from the previous year's high of just over 46,000. The reduction was also reflected in the value of the overpayments recorded in the year. This was down nearly €10 million from €57 million in 2004. Similarly, there were reductions in the number and amount of overpayments attributed to fraud or suspected fraud in 2005.

If we look behind the figures, we find that the fall in the value of overpayments is mainly due to a €10 million drop in the one parent family payment category. The high level of overpayments recorded on this scheme in the previous year was the result of a major review carried out on the means of one parent families cases. Experience has shown that this is a high-risk area from an overpayment perspective. There were no dramatic variances on other assistance and benefits schemes.

Recovery of overpayments, be they due to fraud or other means, is still a problem, although €20 million or so was recovered by way of cash or withholding from current entitlements in the year. A total of €131 million in overpayments was still outstanding at the end of 2005 even after extensive write-offs of amounts due. Debts may be written off because they are deemed to be irrecoverable or for accounting purposes where there has been no activity on the overpayment for three years. Debts written off, particularly those written off for accounting purposes can be the subject of successful recovery in later years.

Chapter 12.2 records the prosecution action taken by the Department during the year against employers who failed to carry out their statutory obligations and persons who defrauded the social welfare system. Given the extent of fraud, which was outlined in chapter 12.1, the Department must be selective about the cases it sends to the Chief State Solicitor's office for prosecution. Most of the prosecutions are taken in respect of fraud on job seeker's assistance or benefit and generally involve working and claiming. The average value of overpayment in fraud cases taken to court was just over €5,000 in 2005. The committee can see from table 42 that the Department is successful in securing convictions in the vast majority of cases that come before the courts.

I note that the number of cases sent to the Chief State Solicitor's office for prosecution peaked in 2004 at 476. The number has continued to fall since then, with 412 cases in 2005 and, according to preliminary figures supplied to me by the Department, 348 cases in 2006. I do not know whether this is a temporary trend or whether the Department, in conjunction with the Chief State Solicitor's office, has decided that the lower figures represent a quantum of prosecutions that are sustainable.

Civil proceedings are also taken on behalf of the Department where it is deemed that there is a realistic prospect of recovery of significant amounts from recalcitrant social welfare debtors. Table 43 reflects the level of activity in this respect.

Chairman

Will Mr. Hynes make his opening statement?

Mr. Hynes

In his opening remarks, the Comptroller and Auditor General has given the broad outline of the figures relating to expenditure under the Vote and the fund so I will not go over this material again. The primary responsibility of the Department is to provide social welfare payments effectively and efficiently. The Department generally has a good reputation for the service it provides, although various factors can affect service quality from time to time. In recent times, for example, the arrival of large numbers of migrant workers from other EU states has resulted in a substantial increase in the number of claims for child benefit and because many of these claims require correspondence with the person's home country, they have resulted in additional work pressure in the child benefit office. Similarly, service from the pensions service office in Sligo has been affected by a combination of factors, including increased claim numbers, changes in schemes, very high levels of staff turnover and the implementation of a major programme of change in technology accompanied by new working arrangements. We are taking measures to deal with any backlogs of claims that have arisen as a result of these different circumstances.

As well as being responsible for making payments, the Department must try to ensure that only those who are entitled to payments receive them and that where people are overpaid for one reason or another, these overpayments are recovered. The Comptroller and Auditor General's report outlines the levels of overpayment and the Department's record of recovery of overpayment over the period from 2001, up to and including 2005.

The amount recorded as overpayment in 2005 was some €47 million, or 0.4% of total scheme expenditure that year. Of this amount, some €36 million arose on social assistance schemes and the remaining €11 million arose on social insurance schemes.

Overpayment attributed to fraud accounted for some 40% of recorded overpayment in 2005. Customer error accounted for about 43%, estate cases amounted to 14% and departmental error for around 3%. As table 40 of the Comptroller and Auditor General's report shows, there was an increase of more than €15 million to some €131 million in the outstanding balance of overpayment at the end of 2005. The value of new overpayment each year is greater than the total value of recoveries in the same year.

In 2005, some €20 million was recovered in respect of overpayment recorded in 2005 or previous years. Of this, some €11.25 million was recovered in cash and €8.7 million was recovered by deduction from a subsequent social welfare payment. Of the recoveries in cash, some €5.5 million was recovered from the estates of deceased non-contributory pensioners and the remainder consisted of recovery from people no longer in receipt of a payment from the Department.

We have been reviewing the approach to overpayment recovery and debt management from the point of view of efficiency and value for money. There are several key requirements of an effective approach in this area, including the following: effective debt prevention by ensuring, in the context of our control programmes generally, that adequate risk-based controls are in place which minimise error, fraud and abuse and prevent overpayment occurring in the first place; timely identification and effective recording, reporting and monitoring of overpayment and its recovery; and active and effective pursuit of the recovery of debt.

We are taking a more risk-based approach to control activity generally in the light of the recommendations from the Comptroller and Auditor General's review of our control programme in 2003. An effective system for recording and reporting on overpayment and recovery is also essential. Our system of recording overpayment up to now has involved a great deal of manual reporting from scheme areas and there has not been an integrated view of overpayment across the range of schemes and services. The overpayment computer system, which dates back to 1987, has been purely a mechanism for recording overpayment information supplied manually by scheme areas and has had no automatic interface with the Department's payments systems and no debt management functionality. However, we have put in place a new computer system that will provide more up-to-date, more reliable and fully reconciled information on overpayment and recovery. The new system is being put in place as part of the Department's service delivery modernisation project which will gradually be extended across the full range of its services.

Regarding overpayment recovery, we have initiated a programme to ensure greater consistency in the approach to overpayments across various schemes and, in particular, to enable us to focus more effectively on pursuing recovery from off-book customers, namely, persons no longer in receipt of a payment from the Department. Overpayments range from small overpayments due to customer or departmental errors to large overpayments due to deliberate intent or fraud. While it has been the Department's policy to seek recovery of all overpayments, the main focus must be on large overpayments, particularly where there is deliberate intent. The intention is to ensure recovery of significant debt arising from customer error or fraud, to be pursued vigorously up to and including legal proceedings.

Another key aspect of implementing a new overpayments and debt management strategy will be a review of the backlog of overpayments in the system going back as far as 1987 to identify those off-book cases that should be pursued, taking into account the need for recovery activity to be cost effective. There is a large number of cases in the system, some 500,000 in total, many of which are low in value.

In migrating cases to the new computer system we have concentrated on certain categories of overpayments, mainly those where there has been recovery activity in the past three years, cases notified since 2000 where the outstanding debt exceeds €1,000 and large fraud cases where the value exceeds €5,000, regardless of the time period involved. Of the total number of cases, more than 120,000 have been migrated to the new system which is in use in the central overpayments and debt management section and will be in use in all relevant areas of the Department by mid-2007. We propose to consult the Comptroller and Auditor General and the Department of Finance about the appropriate way of dealing with those cases that have not yet been migrated to the new system and involve debt that is, for practical purposes, irrecoverable.

The Comptroller and Auditor General's report, at paragraph 12.2, addresses the issue of prosecution in cases of fraud and abuse of the social welfare system. Details are given of the number of cases sent forward for prosecution. The vast majority of such cases arise under the unemployment payment schemes and the main ground for prosecution is concurrent working and claiming. The decision to prosecute is based on the circumstances of the individual case and the nature of the alleged offence. Factors taken into account include the duration of the fraud or abuse, the amount earned by the offender during, for example, a period of working and claiming, mitigating or aggravating circumstances and the deterrent effect prosecution may have. The majority of cases are taken by way of summary proceedings. Civil proceedings may be taken to facilitate recovery of scheme overpayments, for the collection of arrears of PRSI contributions or the enforcement of maintenance recovery orders against liable relatives. In considering whether a case should be put forward for civil action, the Department takes account of the manner in which the overpayment arose, the amount involved, the customer's apparent ability to pay and the possible deterrent value.

Chairman

May we publish Mr. Hynes's statement?

Mr. Hynes

Yes.

Deputy Burton

Regarding the length of time it takes individuals to receive certain benefits, particularly persons entitled to retirement pension once they come of age, I understand the Department has a target of the pension being received within six or seven weeks. However, in many areas it takes much longer. I advise people to send in their material three or four months in advance of their 66th birthday. What is the performance target set by the Department? What is the average time taken? What is the longest time people must wait to receive their retirement pension, which used to be called the old age pension?

Mr. Hynes

The target we have set in respect of contributory old age pension is delivery within six weeks in 55% of cases. In recent months there have been issues concerning pensions because a number of factors have had an effect. For example, it is taking people time to become familiar with the new computer system we have introduced. There has also been an increase in the number of pension claims. The net result is a longer than desired delay. We are in discussions with staff unions in the Sligo office to deal with the backlog and I am hopeful the position will improve significantly during the next few weeks. For one reason or another, there has been a large turnover of staff in recent months, but I accept that the quality of the service has not been up to standard.

Deputy Burton

Would it help to make an application three or four months early? Recently, a lady I met had sent in her documents early, but she still faced a significant delay. Is it correct to say it can take more than five months to receive a retirement pension?

Mr. Hynes

Some cases have taken that long to process, but we would like people to apply three months or four months beforehand.

Deputy Burton

Would the Department advertise that preference in its offices and through active retirement groups, as people do not know about it? Ten years ago they were used to waiting less than four weeks for their pension or receiving it practically on the day they retired. That is the culture with which people in their 60s are familiar and they do not understand how it now takes a great amount of time to process. The Department should be more specific in its advice.

There are problems in Dublin 15. For example, it took more than six months to process a lone parent allowance claim last year, to which Mr. Hynes referred in his opening statement. Is the delay due to the number of international claims being made for lone-parent and child benefit payments?

Mr. Hynes

There was a problem last year, but we have taken specific measures and provided extra resources to deal with claims. As the Deputy is aware, we are devolving responsibility for the administration of lone parent schemes to local offices. Instead of being administered from the Sligo office, they will be dealt with at the person's local office. This has led to a considerable improvement in the time taken to handle claims.

Deputy Burton

What is the target period in respect of child benefit claims in the case of Irish families? There may be specific problems concerning children abroad, in respect of whom parents working in Ireland are claiming lone parent benefits, but in the case of an Irish-born child with an Irish parent resident in the country, what is the time period involved?

Mr. Hynes

Child benefit claims are normally straightforward and we aim to deal with 90% of them within one week. That is the target we aim for and we have been achieving a figure near that. It should not take a great deal of time to deal with a straightforward case.

Deputy Burton

How many PPS numbers were issued last year and this year to date? How many were issued to Irish people and how many to people from other countries?

Mr. Hynes

I have the number of PPS numbers issued to EU accession states from May 2004, when the states joined the EU, to date. The total number issued to those countries in 2006 was approximately 143,000. For January and February the figures are approximately 11,500 per month. I will check the records to provide figures for PPS numbers issued to Irish people.

Deputy Burton

There have been a number of widely reported fraud cases, concerning people from overseas continuing to receive payment after leaving the country. When a foreign national has an entitlement from the Department of Social and Family Affairs, the payment is sent by electronic funds transfer. In some cases recorded in the newspapers people running businesses from Nigeria to Albania to China were in receipt of payments from the Department by electronic funds transfer. Is there any checking of this system? Has it been upgraded to note when the destination is abroad and are there controls?

Mr. Hynes

In modernising the payment system we are moving towards making payments electronically rather than manually. We need suitable control systems when people are paid in this way. We have systems in place to check people are still entitled to claim and remain where they say they are. We can co-operate with other EU countries on this issue if necessary. We have new control systems in place. Many payments of child benefit are paid by electronic funds transfer. We send mailshots to people to ensure they are still entitled to claim and reside where they claim to be.

Deputy Burton

How much child benefit is paid abroad? What are the principal countries to which it is paid?

Mr. Hynes

We have many claims from people who work here and whose families are at home. We have not been able to pay many of them because of the process needed to verify with the country they came from that the children are there.

Deputy Burton

How many applications have been made?

Mr. Hynes

Claims from EU citizens working here and whose children reside at home amount to 15,000, of which 80% concern children of Polish nationals.

Deputy Burton

How many have been processed?

Mr. Hynes

Approximately 600 have been paid.

Deputy Burton

The problem with electronic funds transfer is that the perception of overpayment and fraud as a serious problem reduces people's confidence in the fairness of the system. How many of the cases highlighted deal with international fraud, where the Department is paying money electronically to people whose circumstances have changed? Perhaps they were also claiming in other European countries and are no longer entitled or were never entitled to payment.

Mr. Hynes

It is more difficult to operate checks when paying people in other countries. We have made arrangements with the social security authorities in these countries to check on the circumstances of people who are paid by the Department. We have not had a problem making contact with authorities in these countries.

Deputy Burton

Is the Secretary General saying that the stories that appeared in the media, where the Department was paying money to claimants in a number of countries who had businesses, are atypical?

Mr. Hynes

Yes, our information is that such cases are rare. It has not come to our attention as a major problem. People are entitled to child benefit payments whether they are working or not. It is not dependent on that.

Deputy Burton

On what does it depend?

Mr. Hynes

If the children are resident in Ireland they are entitled to child benefit in the same way as an Irish child. If the children are resident in the home country we must question if they are receiving child benefit in that country. In some cases the mother is at home and is entitled to payment of child benefit in the country of residence. In that case there is an adjustment to be made to the payment made here. Our payment is a universal payment and is due to the family once this adjustment is made.

Deputy Burton

The Department carries the budget for the payment of rent supplements by community welfare officers. Does the Department pay foreign landlords by electronic funds transfer? I represent Dublin 15, in which there is much rented property. In some difficult cases payments were made by electronic funds transfer to foreign landlords, who may have been registered here but had moved out of the country. Is there any check in respect of the PPS numbers of those foreign landlords? In some cases, money was paid in respect of Irish tenants by the community welfare officer to a bank account abroad or in Ireland. There seems to be no control of the landlord. Traditionally, community welfare officers gave tenants a cheque to give to the landlord. Must landlords provide a PPS number on registration? Is there a check on money paid to landlords abroad? Are landlords in some cases receiving other benefits from this country?

Mr. Hynes

In the normal course of events, the rent supplement is paid to the tenant if he or she is living here. I am not sure of the extent to which the HSE pays rent directly to landlords who live abroad but I would think it is a rare occurrence. In such cases, we would require a PPSN on behalf of both tenant and landlord.

Deputy Burton

If the landlord lives abroad while maintaining a bank account in Ireland, the funds are transmitted.

Mr. Hynes

If a tenant entitled to rent supplement rents a premise, the supplement is payable either to the tenant or directly to the landlord. While the HSE's payment arrangements depend on the circumstances, it needs to be satisfied a payment is bona fide before giving money to the landlord.

Deputy Burton

Does the Department have overall control of PPSNs? If an immigrant acquires a PPSN before returning home, does the number stay active? I understand that one of the problems in respect of the social security database in the United States is the movement of migrant workers to and from that country. Social security numbers are being corrupted by being passed to other people arriving in the United States. If, for example, a citizen of one of the accession states gets a PPSN before returning home, how does the Department become aware of that? Could the number be sold or given to someone else? Would that not ultimately build up entitlements to Irish benefits?

Mr. Hynes

The first point of contact with a person is when he or she is issued with a PPSN. A system is in place whereby photographic and other identification must be provided by applicants. Once the PPSN is issued, it remains in the system as a means of identifying people on an individual basis. The key to the matter is what happens to the PPSN afterwards. It is important that identity checks are also made when a person applies for a payment or a driving licence because the possession of a PPSN does not necessarily grant entitlement to payments. In the case of our Department, if people apply for payments based on a PPSN, we require them to identify themselves at the time of making the claim. The potential for people to give their PPSNs to others should not mean they can receive payments because an identity check would determine whether a claim is genuine.

Deputy Burton

Reference was made in the report to fraud and overpayments on lone parents' allowances. I understand that part of the problem in this regard results from claimants who have undeclared partners. How significant is that problem? The Minister announced on several occasions that he intended to drop the cohabiting rule. Has the rule been dropped? It is clearly a difficult area to address in practice. What is the level of fraud or overpayment in the area of lone parents benefits? Is it as high as the 40% suggested in departmental reviews? I presume that is one of the reasons the Minister said he wanted to abandon the cohabiting rule. I am unclear with regard to the changes, as, I think, are many others.

Mr. Hynes

The main reason for the high level of overpayments was because people were earning more than they were entitled to while receiving lone-parent allowances. A project has been operating over the past few years to identify cases of that kind and a high level of overpayments was found among people in that situation. The lone parents scheme is recognised as a high risk area for fraud in respect of earnings and cohabitation. However, cohabitation is difficult to establish or prove in practice.

The Minister has made clear his wish to alter the lone-parent scheme and a number of changes are planned which will make it easier for lone parents to take up employment by providing training and other supports. While the abolition of the cohabitation rule has not yet been implemented, it is part of the overall package of changes.

Deputy Burton

In practice, is the Department enforcing the cohabitation rule, given that its abandonment has been announced several times?

Mr. Hynes

It has not been changed as yet, so it remains part of the legislation. The rule is being applied in the same way as in the past. Where we find instances of cohabitation, the payment is withdrawn if it is identified as a problem.

Mr. Purcell

I share Deputy Burton's concerns about the control risks that are brought into the equation when a system of electronic funds transfers is introduced. There are clear benefits from such a system in terms of administrative efficiency and better services to clients but that must be balanced against an increased control risk.

The Deputy referred in particular to child benefits. Once a parent is awarded child benefits, he or she will continue to be paid over a minimum of 16 years unless an unfortunate event transpires, such as the death of a child, or the recipient relocates to another country. As the Accounting Officer noted, the EU ruling that the residence of the primary bread winner is a determining factor in qualifying for child benefit and the increasing number of immigrant workers in Ireland add to the control risk because of the greater danger that immigrant workers will move to their home country or elsewhere. Clearly, new control measures have to be introduced to counteract that risk.

With electronic funds transfer one can now pay money into an Irish bank account and have access to that account from an ATM in most, if not all, countries. We have been mindful of that in drawing up our audit programme for this year and have carried out some exploratory work in the area. This week I have given the go-ahead for substantial work to be carried out to see how the Department is responding to the new control risks, particularly in the area of child benefit.

Deputy McGuinness

With regard to the controls, how many times does the Department visit a file to review children's allowance or other ongoing benefits? At present, when is a file checked again after a claim has been made and payments issued? What happens in the Department when a benefit of any kind begins to be paid? Is there a control mechanism?

Mr. Hynes

In the case of child benefit, we have a programme of mailshots to verify whether a person is still entitled to the payment. We issue the mailshot periodically and, if we receive no reply, send inspectors out to verify that the person lives where they say they live and are entitled to the payment. We have a regular programme of checking payments, though it varies according to the benefit concerned. The approach I described is for child benefit but a different approach is used for unemployment payments. People are interviewed at local offices on a continuing basis to verify that they are entitled to the payment. We have a programme of inspections by our investigators around the country, covering pension schemes, lone parent schemes etc. We try to identify cases where there are most likely to be problems and target investigative activity on those.

Deputy McGuinness

The Department is spending over €14 billion. Does Mr. Hynes not accept that some of those controls are dated? I understand the Department is considering a new computer system. It states in the documentation that the computer system dates from 1987, yet the Department is only now beginning to update it. As the budget increased to €14 billion, should the Department not have steadily introduced more direct controls? For example, overpayments from 2001 to 2005 increased from €7.5 million to €11.7 million and continue to grow.

Deputy Burton referred to reports in the newspapers and it is obvious in business that where a body is engaged in transferring moneys it is open to fraud of one kind or another. In the frauds reported in the newspapers the perpetrators had been deleted from the system but the Department continued to pay them, over what appeared to be a long period of time, without carrying out checks. I understand the Department has liaised with the Comptroller and Auditor General and new systems will be introduced but why has it taken so long to respond to changes in Irish society in recent years, particularly relating to people coming into the country? Overpayments were made and levels of fraud are increasing.

Mr. Hynes

The overpayments computer system has been in place since 1987 but it is a small system to record the overpayments which arise under the different schemes. There has been considerable modernisation of the scheme payment systems in that period and a huge control programme is in operation. For example, 335,000 reviews were carried out in 2006 by our investigators. One will always come across cases where there has been blatant and extensive fraud but we have put in place a programme of fraud and error surveys to establish where our schemes are open to fraud. We have carried out a number of those since the Comptroller and Auditor General's report of 2003 and try to target our activity where there is a likelihood of fraud and error.

I do not accept that fraud and error are as extensive as the Deputy seems to imply. Serious and blatant cases of fraud come to light but we have a good control programme for the majority of cases across the range of schemes. Special measures are to be put in place for electronic payment systems so that we do not leave ourselves open to fraud and abuse at that level.

Deputy McGuinness

Overpayments for more than three years represent 27% of €35 million of outstanding moneys. How does the Department go about collecting that? I understand it takes the money from benefits currently being paid and other people repay the money but what amounts will the Department write off in the new system? Will it examine every case or simply not transfer amounts below a certain amount to the new system?

Mr. Hynes

At present there is an arrangement whereby if there has been no activity in respect of an overpayment in the past three years, it is written off for accounting purposes. However, the overpayment remains on the system and there are many of them at the moment. They go back as far as 1987 and the majority are of very small value. Realistically, there is little likelihood of recovering many of them. We are studying the issue with a view to establishing on what to concentrate. We want to concentrate on the large overpayments where there has been fraud and deliberate intent. To do that we want to remove from the system those overpayments where there is no real prospect of recovery.

Deputy McGuinness

The Department will take a more realistic view when the new system is up and running.

Mr. Hynes

That is right.

Deputy McGuinness

Is Mr. Hynes happy with the number of cases being taken for prosecution?

Mr. Hynes

We have, in the past few years, tried to increase the number of prosecutions we take. Up to 2001 there had been a decline in the number of prosecutions taken by the Department. In 2004 we increased the number referred to the Chief State Solicitor's office for prosecution to 476 but where there is an increase in the number of cases being dealt with by the Chief State Solicitor's office there are issues for us in terms of time and the requirements for our inspectors to attend court. There is a time element involved so we must be more selective in the cases we refer to prosecution. We are trying to ensure we focus on the really serious cases.

Having considered the matter, we believe a figure of approximately 400 a year would be reasonable and we aim for that number on an ongoing basis. This means there has been a decline over the past year or two. We can cope with the figure of 400.

Deputy McGuinness

When cases go to court, is the Department successful? Are people settling before the court stage? At such a time do those involved in fraud cases give up and pay up, or is it always the case that they hold out and go to court?

Mr. Hynes

The repayment of the overpayment is a separate issue to the prosecution.

Deputy McGuinness

The case would go to prosecution.

Mr. Hynes

It is a criminal prosecution of a criminal offence. We take the view that the issue is separate to the recovery of the overpayment. Sometimes the courts will take a different view to that and once a person is making repayments it will clearly affect the outcome of the court case. In our view it should be dealt with as a separate issue.

Of the 266 cases finalised in 2006, prison sentences were applied in four. Some 105 cases resulted in fines ranging from €1 to €6,000 in individual cases and the Probation of Offenders Act was applied in 52 cases. There were a number of other possible outcomes as well, but generally we get a successful outcome in that where we take cases to court, we are pretty sure of the evidence, which is normally clear-cut. We are confident that when we take cases, we get a positive result.

Deputy McGuinness

On a separate issue related to the appeals procedure for the payment of any benefit, is the current system cost-effective? The client would lodge the appeal and officers from the Department would interview those people in different counties or centres. There would be consultant reports and the appeal might not be allowed or might be further pursued. Is the system satisfactory?

I appreciate officers must carry out interviews but in some of the cases we come across in the course of our work, or certainly my work, there is almost outstanding evidence on the side of the client, relevant to condition of health and which could be borne out by consultant reports. A person could actually be going for an operation and yet the appeals system would go through all this procedure. In cases like I have outlined, is it really cost-effective to go through the motions where there is outstanding evidence that a case should not even have gone to the appeals system?

I have heard constant complaints about the operation of the appeals system. From a cost perspective, where is the line drawn?

Mr. Hynes

I would not accept that the appeal system is not working properly. It is important that there is a mechanism for people turned down at the initial stages to be able to appeal their case. Some 46% of appeals had a favourable outcome for the applicant in 2005, indicating it is a good system.

Where there is a dispute about a medical case we have medical referees in the Department who are expert in determining the extent to which people are unable to work, which is the criterion for entitlement to disability payments. Where there is a disagreement it is ultimately up to the deciding or appeals officer to make a decision. We give every opportunity for evidence from specialists and others to be submitted with a case and if it takes that bit longer to do so we are prepared to wait that long for evidence to be made available to the appeals officer.

The emphasis is on being fair to both sides and if there is an opportunity for medical referral to a specialist etc., we would provide enough time for that to be done and we take it into account.

Deputy J. Higgins

Will Mr. Hynes briefly outline the picture for rent supplement in 2005?

Mr. Hynes

Is the Deputy seeking figures?

Deputy J. Higgins

Numbers and cost, etc.

Mr. Hynes

The total cost of rent supplements in 2005 was €369 million approximately. This was payable to approximately 58,000 recipients at the beginning of the year, rising to 60,000 at the end of 2005.

Deputy J. Higgins

That would indicate a figure of 60,000 landlords, presumably?

Mr. Hynes

I would think a smaller number of landlords would be involved, as some landlords would have more than one rent supplement recipient.

Deputy J. Higgins

Does Mr. Hynes have any information on how many tenants depending on rent supplement the biggest single landlord would have?

Mr. Hynes

I do not have that information but most landlords would have one premises. The landlord may have a number of rent supplement clients in that premises but I am not certain about the extent to which landlords would have multiple tenants. The overall number of landlords we are making payments in respect of is approximately 20,000. On average, that would indicate three recipients per landlord.

Deputy J. Higgins

The average would seem to indicate there must be some landlords with an enormous amount of tenants.

Mr. Hynes

I presume that would be the case.

Deputy J. Higgins

Would it be easy to get that information off the system?

Mr. Hynes

It should be.

Deputy J. Higgins

Perhaps Mr. Hynes will communicate with us, for example, the top ten landlords, the number of units they have and the amount of supplement paid to them?

Is there any contact or cross-reference in communication between the Department and the Revenue Commissioners? Is there any communication with Private Residential Tenancies Board? The board came before this committee and we learned that many landlords are not complying with the legal requirement to register. Are there procedures in the Department ensuring that every landlord receiving State funds is registered with the Private Residential Tenancies Board and that they are tax compliant?

Mr. Hynes

There is contact with both Revenue and the PRTB in this regard and Mr. Ó Raghallaigh can further explain what happens in practice.

Mr. Brian Ó Raghallaigh

Regarding the registration, we have give our entire file of data to the PRTB, so they have all the information we have. We do something similar with Revenue by giving it details of all payments made and landlord details, including personal public service numbers if possible, telephone numbers, addresses and so on. There is full transparency.

Deputy J. Higgins

Both Revenue and the PRTB have all of the information. Could we ask the Department of Finance what is done with information on landlords?

Mr. Quigley

I cannot give the Deputy those details at the moment because that would be an operational matter for the Office of the Revenue Commissioners. I can see that information be provided on the use the Revenue make of such information; in other words, Revenue's procedures.

Deputy J. Higgins

We would be justified in taking for granted that such information, particularly relating to bigger landlords, would be checked in detail to see if they are tax compliant so we would appreciate access to the information.

This is an enormous subsidy to private landlords. Unfortunate people who are priced out of the housing market are dependent on the landlord class and in a four year period these landlords received around €1.5 billion from the State. It is an enormous amount of money; have cost benefit studies been done in this regard? Could that money be put towards social and affordable housing for people dependent on the supplement? Does the Department think in those terms?

Mr. Hynes

As the Deputy will know, a decision was made that responsibility for people receiving rent supplements for 18 months or more will be transferred to local authorities under the rental accommodation scheme. The supplementary welfare allowance scheme will become the rent supplement scheme which is what it was originally intended to be — a subsidy for short-term issues people have relating to accommodation. The long-term housing needs of people will be dealt with by local authorities.

Deputy J. Higgins

Does the Secretary General have an estimate of what will be paid out in 2007 and a figure for what was paid out in 2006, notwithstanding the rental accommodation scheme? If the figure was €369 million in 2005, what was the figure in 2006 and what is the estimate for 2007?

Mr. Hynes

The figure for 2006 is €390 million and the estimate for this year is €403 million.

Deputy J. Higgins

How many people have been transferred from the responsibility of the Department to that of local authorities in 2005 and 2006?

Mr. Hynes

The total number of people transferred, to this point, from the rent supplement scheme to the rental accommodation scheme is 5,000.

Deputy J. Higgins

In view of that the increases in rent supplements seem substantial. There is a €21 million increase from 2005 to 2006 and a projected €13 million increase form 2006 to 2007. How does Mr. Hynes account for the fact that 5,000 people have been transferred yet the amount of money going to landlords is increasing so much?

Mr. Hynes

The number of people claiming rent supplements is staying more or less the same each year, even though people are being transferred to the local authority scheme. If the rental accommodation scheme did not exist the number of people on rent supplements would be far higher.

Deputy J. Higgins

Does the Secretary General liaise with local authorities with regard to what happens to people who have transferred?

Mr. Hynes

It is, more or less, the job of local authorities to make appropriate arrangements for people who have transferred.

Deputy J. Higgins

Given that this is the committee of public accounts can we get a figure for what the Department spends plus what local authorities spend on supplements to give us the full, national picture of what landlords receive?

Mr. Hynes

Some of the people who transfer to the rental accommodation scheme would be accommodated in social housing and some in local authority housing so I do not have a break down of the different arrangements that apply to those 5,000 people. I am sure we can get this information for the Deputy.

Deputy J. Higgins

I seek to have an accurate picture of the subsidies landlords receive on an annual basis from the State to meet the shortfall in social and affordable accommodation. There is something badly wrong with a system that gives €400 million to subsidise speculators in making further fortunes from providing shelter for unfortunate people who have been priced out of a basic human right. This is an issue for the political establishment and the officers of the various Departments and a way urgently needs to be found for those funds to be spent on providing permanent social and affordable homes to remove the landlord class from the scene completely.

Chairman

We are awaiting correspondence from the Department of the Environment, Heritage and Local Government, which has promised to forward us figures on the number of people who have moved from the rent supplement scheme to the rental accommodation scheme. There was a debate on the figures when the Department of the Environment, Heritage and Local Government came before this committee and it has committed to providing us with accurate figures. The Deputy might be able to raise the matter again.

The cost of the rent supplement scheme is in the Vote of the Department of Social and Family Affairs but the Department of Health and Children runs the scheme. Which Department decides on eligibility?

Mr. Hynes

At present the community welfare officers working for the Health Service Executive decide on eligibility.

Chairman

Some are being transferred to local authorities where the Department of the Environment, Heritage and Local Government holds responsibility for the rental accommodation scheme.

Mr. Hynes

There is a Government decision that in future the supplementary welfare allowance scheme, including rent supplements, will be administered by the Department rather than by the Health Service Executive.

Chairman

By which Department?

Mr. Hynes

The Department of Social and Family Affairs, which would have direct responsibility for that.

Chairman

Will that include eligibility assessment?

Mr. Hynes

Absolutely, yes.

Chairman

Who will do that?

Mr. Hynes

The proposal is that community welfare officers who now work for the HSE——

Chairman

They will become employees of the Department of Social and Family Affairs.

Mr. Hynes

Yes.

Chairman

With the policy indicating that a significant proportion of people on rent supplement will transfer to rent accommodation schemes run by the local authorities, why is the Vote not being transferred to the Department of the Environment, Heritage and Local Government?

Mr. Hynes

I suppose that is a decision the Government has made. The short-term rent supplement provision would continue to be operated by the Department whereas the long-term housing needs of people would be dealt with by local authorities under the rental accommodation scheme.

Chairman

Is the amount of money being spent on rent accommodation in the Department's Vote or in the Vote of the Department of the Environment, Heritage and Local Government?

Mr. Hynes

It is in the Vote of the Department of the Environment, Heritage and Local Government.

Chairman

Is there a figure of approximately €20 million in the 2007 Estimate?

Mr. Ó Raghallaigh

There was a €24 million adjustment between our Vote and the environment Vote in 2007 for the rental accommodation scheme. It got €19 million last year and €19 million the year before.

Chairman

If we added on to the figures you have given Deputy Higgins another €24 million, we would have the figure for both schemes.

Mr. Ó Raghallaigh

You would have the allocation but not the expenditure.

Chairman

Not the outturn.

Mr. Ó Raghallaigh

Not the outturn, exactly.

Chairman

In the Finance Bill going through the Dáil last week further measures were included to crack down on tax evasion, an annual feature of a Finance Bill, but this one was to do directly with what Deputy Higgins asked about. Apparently, the Department was making returns to Revenue but it was not including the PPS number of landlords. As a consequence, Revenue was not in a position to cross-check. Why was the Department making returns without the number or was it the case that it did not have the right to return the number?

Mr. Ó Raghallaigh

We did not have the PPS number for landlords as a matter of course. We do have it for the tenant but not necessarily for the landlord. Where we did have it for the landlord my understanding is that we provided it but sometimes we are dealing with a company and at other times with an individual. There might not be a PPS per se that our tenant, who is the person we deal with, would have knowledge of to tell us so that we can tell the Revenue.

Chairman

To take up Deputy Higgins's point, in the absence of a PPS number, attempts to obviate tax evasion by landlords was a fairly week effort without the PPS numbers.

Mr. Ó Raghallaigh

We provided all the information we had. Revenue got as much as we had and it did not complain to us that we should be doing more for it in that regard.

Chairman

I understand that as a result of the amendment to the Finance Bill, public bodies such as your Department, the Department of Health and Children, the HSE and local authorities will now be required to provide PPSN numbers. If the Department does not have them how can it provide them?

Mr. Ó Raghallaigh

We seek from our tenants the landlord's PPS number and, bearing in mind what Deputy Higgins said about registration with the Private Residential Tenancies Board, PRTB, there is a requirement on the part of the landlord to provide that data to it also. The extent to which we do not have them is not that enormous, I would have thought. We are happy to pursue it on Revenue's behalf if it asks us.

Chairman

It is a major enough issue for the Minister to go into the House and table an amendment to the Finance Bill.

Mr. Ó Raghallaigh

I do not think he was motivated particularly by rent supplement in doing that. I do not believe so.

Chairman

I am quoting from a report on the proceedings so it is second hand but the report on the proceedings suggested that this was the reason. Whether that was because of something the Minister said or somebody else said in the course of the debate I cannot say. Can the Department of Finance officials throw any light on this matter? What was the motivation and how will it work in practice?

Mr. Quigley

I do not know what was the motivation. I do not have that information neatly to hand.

Chairman

Could you write to the committee with an explanation?

Mr. Quigley

Certainly.

Chairman

I have a number of other minor questions. How sophisticated is the Department's system of estimating future liability? For example, if there were a downturn in the building industry in the autumn, does it have a system that would pick that up in advance or is it purely demand-led and it will provide money by Supplementary Estimate if there is a greater demand?

Mr. Hynes

We have a good system of making Estimates on an annual basis. We work with the Department of Finance in relation to, say, projections of unemployment figures for the coming year. Obviously, an unexpected event such as you mention might throw the Estimates out. It is a demand-led situation. Our schemes are demand-led and people have to be paid where they have an entitlement to it but generally we find that our Estimates are fairly good on an ongoing basis. The unemployment area would be one which is more difficult to predict than, say, pensions or other scheme areas.

Chairman

What is the range of benefits and allowances? Are there significant regional differences in the incidence of claims? Can you highlight them if there are?

Mr. Hynes

Not such that we would be concerned about particular areas being more liable to have claims than others, but that is an issue on which we could come back to the committee.

Deputy Burton

Going back to the issue of rent allowance, if the landlord's affairs are handled by an agent, as is frequently the case in my constituency where there is a good deal of rented property in parts of Dublin west and places like Mulhuddart, Castleknock and Blanchardstown, I am not aware that the community welfare officers look for the actual name of the landlord. I understand that if the name of the agent is given, the cheque is made payable to the agent.

To follow up on what the Chairman asked about, in cases I am aware of the CWOs pay the cheque to the agent. I do not know if the officials have an estimate of the number of cheques for landlords that are paid to agents. Agents can be companies or individuals but what happens if a problem arises with tenants behaving badly and the person living beside them is trying to establish the identity of the landlord? Residents who are buying their homes and are living in the area long term may have a rented property next door to them. The tenants from hell might be living next door, with all sorts of carry-on happening, and that can be very difficult for people. Those residents frequently come to people like myself or Deputy Higgins to try to get some redress in terms of reasonable behaviour from the tenants but if we contact the community welfare officer, the CWO will not tell the neighbours on the road who have a difficulty with the tenants the name of the landlord. The tenants themselves, if they are willing to co-operate, often do not know the name of the landlord; they only know the name of the agent.

The Private Residential Tenancies Board, whose phone line is only in operation for about three hours a day, will simply say that is the end of the matter. In west Dublin the use of agents is significant so how can Mr. Ó Raghallaigh say he has the PPS numbers of most landlords when the use of agents — I can only speak about Dublin west — is so significant?

Mr. Ó Raghallaigh

In everything I said earlier about landlords I intended to encompass agents and landlords. Everything the Deputy said about where the agent comes into it is true. If the information the tenant has is solely in regard to the agent, the local real estate person or whoever it is, that is the only information we will have and is the only information we will pass on to Revenue.

Deputy Burton

So there is no PPS number in that case.

Mr. Ó Raghallaigh

There would be some kind of registration number that the agent would have for dealing with Revenue. We do not go unravelling it back to find out who is the original owner of the property. That is not our function.

Deputy Burton

Is the Department resisting, as it were, knowing the owner of the property in a formal sense to avoid liability ultimately? Let us take the example of an estate of 100 houses, of which 30% are rented by landlords or agents. If only three or four of the tenants behave badly, it is utterly destructive for the rest of the people living in the estate. Some landlords churn tenants and do not allow them to stay for more than 12 months. The Department paid €440 million in rent allowances last year, between rent supplement and the RAS. The new phrase is "going on the RAS". Is Mr. Ó Raghallaigh saying that the Department keeps a conscious distance from the issues that arise sometimes for tenants, but even more frequently for neighbours, who cannot get a landlord to respond? Under the private residential tenancies legislation, a landlord has a legal obligation to ensure that their tenants behave reasonably and with consideration. Is the Department keeping a distance from that?

Mr. Ó Raghallaigh

We are not keeping a conscious distance from those issues. Our relationship is with the tenant and it is an income maintenance relationship. The information we get on landlords, agents and so forth is, in a sense, incidental to that primary relationship. Our policy is to co-operate closely with the PRTB, the local authorities, the Revenue Commissioners and any other agencies that have responsibilities in this area. We are not deliberately putting ourselves in a position where we do not have information for fear that we might have to do something with it.

Deputy Burton

However, the Department does not require the landlords to whom it is paying the money to be registered with the PRTB. The levels of registration in the Dublin area at present are not more than 20%.

Mr. Ó Raghallaigh

It is correct that we do not require that.

Deputy Burton

Why not? The Department is paying €1,268 per month through the community welfare officer for two adults and two children to rent a three bedroomed property in Dublin west. The sum is from €968 to €1,100 for a lone parent with two children. The Department is paying a great deal of money. I am still shocked at the case I encountered where the rent was being paid by electronic funds transmission to a landlord who was obviously long gone to a distant part of the world. He was getting the money but it was not possible to get a response from him.

Mr. Ó Raghallaigh

We do not require the tenancy to be registered primarily as a practical matter. The tenancy must exist for it to be registered but quite often the payment of rent supplement is necessary for the tenancy to be created. It would simply not be possible for people to take out a tenancy if they were required to have that tenancy registered with the PRTB before they got rent supplement. However, we provide all the data we have to the PRTB. It has the information about tenancies that we have, which puts it in a position to take whatever action it must to boost registration. I am satisfied that no information gaps arise from our position on that.

Deputy Burton

Chairman, I believe that the provision of the name, address and PPS number of the landlord, not the agent, would constitute a huge step forward in terms of the tenant knowing the landlord from whom they are renting if there are problems, and also for situations where there are many rented houses in traditional housing estates and there is a problem with people coming and going. It would assist good social harmony and order. In addition, from a tax accountability perspective, if the community welfare officers required this information it would enable the circle to be closed. One could be satisfied that the landlord was paying their fair share of tax.

Chairman

I understand from a newspaper report on the debate on the Finance Bill last week that what the Deputy suggests will be implemented. However, the Department of Finance might clarify that and give the committee a detailed account of the amendment, the motivation for the amendment and how the system will work in practice when the amendment becomes law.

Mr. Purcell

We produced a value for money report on the rent supplement scheme not long ago. I believe we referred to the point about PPS numbers and so forth. It was certainly in an early draft of the report and I hope it survived into the final report. I can check that.

To respond to Deputy Higgins, there are approximately 60,000 people in receipt of rent supplement. Approximately 32,000 of those are eligible for assistance under the rental accommodation scheme or through social housing. At a previous meeting with the Accounting Officer of the Department of the Environment, Heritage and Local Government it was clear that the scheme was not moving as fast as that Department wished or had originally intended. The overall target was that more than 30,000 tenants who had been in receipt of rent supplement for more than 18 months would have been accommodated by the local authorities either through the rental accommodation scheme or by social or voluntary housing by the end of 2008. That might be an ambitious target but clearly the scheme is taking some time to build up. There are difficulties. There were some practical difficulties in getting some landlords to sign up to the rental accommodation scheme, so people will continue on rent supplement in such situations.

With regard to what might happen if there was a downturn in the construction industry, the social insurance fund had a surplus at the end of 2005 of €2.4 billion. That war chest is now probably more than €3 billion. In the short term, therefore, it would be able to meet the unemployment payments that would have to be made. Most of those payments would be job seekers benefit rather than job seekers assistance. Of course, if there was a serious downturn, it would affect the income of the fund as well. However, there is a war chest available that does not have to be provided for through the Estimates every year.

Chairman

Is it agreed that we note Vote 38 on the social insurance fund 2005 and dispose of chapters 12.1 and 12.2? Agreed. There is no other business. Our next meeting is on Thursday, 22 March 2007, at which we will consider the minutes of the Minister for Finance.

The witnesses withdrew.

The committee adjourned at 1.20 p.m. until 11 a.m. on Thursday, 22 March 2007.