asked the Minister for Social Welfare the total losses to the Exchequer resulting from social welfare fraud.
8.
Ceisteanna—Questions. Oral Answers. - Social Welfare Fraud.
3.
(Limerick East) asked the Minister for Social Welfare the plans he has to curb abuse of the social welfare system; his estimation of the amount of unlawful claims of unmarried mothers allowance, deserted wife's benefit, unemployment benefit or allowance and disability benefit; and if he will make a statement on the matter.
18.
asked the Minister for Social Welfare the prevalence of fraud in the social welfare area; and the measures he is taking to combat the abuses that are occurring.
It is proposed to take Questions Nos. 3, 8 and 18 together.
In 1985, the most recent year for which complete statistics are available, total fraud by social welfare recipients recorded in the Department was estimated to be in the region of £4 million compared to total expenditure in that year of £2.291 billion. Much publicity has been given from time to time in the media to the question of social welfare fraud and various figures have been quoted. They are, however, based on speculation and are not substantiated by hard evidence. In saying this I do not by any means wish to appear complacent in this matter.
It is quite clear that the vast majority of social welfare recipients are entitled to their payments and I intend to protect the dignity and integrity of these people by intensively pursuing the small number who abuse the system. In this regard, the Government have decided that an intensive and active campaign against abuse of the unemployment and disability payment schemes will be maintained and increased efforts to detect abuse of other social welfare schemes will also be made. Much of the groundwork for this has already been laid through the strengthening and improvement of the investigation, control, review and audit activities across the various services of my Department, including the provision of extra staff and use of sophisticated computer techniques. Further action will be taken where necessary in the light of the final reports of the consultants who are advising my Department on the most cost-effective measures necessary to eliminate abuse and to restore the confidence of the taxpayer in the social welfare system.
There is a clear need for effective control measures in the social welfare area because of the amount of State funds involved. At the same time it must equally be recognised that the dividing line between legitimate investigation of fraud and harassment of clients is thin. There are many hundreds of thousands of claimants who are in genuine need of the services provided by my Department and who have a statutory entitlement to those services. A balance must be kept between providing those families with a speedy accessible service and ensuring that the service is not easily open to abuse. That balance must be constantly adjusted in the light of changing needs.
In relation to the specific information relating to overpayments sought by Deputy Noonan the following represents the amount of fraudulent claims for 1985 which is the most recent year for which statistics are available: unmarried mother's allowance, £733,000; deserted wives' payments, £344,000; unemployment payments, £1,782,000; and disability benefit, £137,000.
Is the Minister aware of the widespread perception among PAYE workers that there is massive fraud, particularly in the area of signing on and working? Is the Minister also aware that that belief is shared by the investigation unit of his own Department? Can he give an indication to the House of when the findings of the consultants will be published?
Is the Deputy referring to the cross-Border investigation?
No. I am referring to the entire country. Is the Minister aware that his own investigation unit reject his figures?
I am not so aware. I am aware of the fact that there is a widespread perception of extensive fraud but the numerous investigations which have been carried out into these particular allegations have repeatedly shown figures of the order I have given. That is not to say, however, that we can be complacent in this area.
Would the Minister agree that instead of charging poor people £10 a day for a bed, economies and savings could be effected by closing the door on social welfare bandits?
Certainly, in so far as that is feasible.
Is the Minister aware that his two immediate predecessors asked Deputy McGahon on several occasions to provide information in regard to the allegations he makes and that not a shred of such information was received by either Deputy Hussey or me during the past four years?
That is why I asked Deputy McGahon if he was talking specifically about the Border area. An investigation was carried out but the outcome did not disclose a level of fraud anywhere near approaching that reported in the media. That was a very intensive investigation. It was carried out by the unit in Dundalk and involved over 250 cases.
Officers' lives were put at risk in the operation.
Does the Minister accept that the widespread perception of fraud in the social welfare system is bringing into disrepute the entire system, even those parts of it that are chronically needed to alleviate poverty? Secondly, would the Minister agree that many of the loopholes for fraud are created by organisational defects in the Department and that there is a very urgent need for a comprehensive increase in efficiency and in computerisation in his Department? Thirdly, would he accept that one area of fraud, the area of unmarried mother's and deserted wife's allowances, is notably hard to prove because of the difficulty in proving cohabitation?
The problem in regard to the widespread perception is often related to attitudes to fraud. As the Deputy will realise it is very hard to change attitudes no matter how much factual information you bring forward. To some extent, that is one of the problems we may have to live with. Nevertheless, there is fraud and it is identifiable. Through greater efficiency and appropriate remedies it can be isolated to a fairly good degree. In that respect, I would like to say that when I was Minister for Social Welfare previously I made contributions to improving the position consistently, particularly in regard to computerisation and in the checking and cross-checking of applications. The same can be said of my immediate predecessors.
Is the Minister aware that employers operating in the black economy pay low wages and pressure their employees to draw assistance at the same time? Is he also aware that when the employee is discovered he is penalised while there appears to be no penalty on the employer who puts the pressure on the employee to draw the dole illegally?
If the Deputy has any evidence of particular cases I will be glad to pursue them.
The Minister in his reply said that the figure for fraud was £4 million out of a total expenditure of £2.291 billion. Will the Minister publish a breakdown of this figure of £4 million in order to try to undo the stigma which is placed on social welfare recipients? Expenditure on unemployment related benefit last year was £700 million for which the Minister gave a figure for fraud of £1.782 million. He now proposes to spend £11.5 million on the job search programme, on going after that £1.5 million. Consequently, will he now reconsider the Jobsearch programme?
That is a separate question.
I take the Deputy's point in regard to the size of fraud but as Deputy Mitchell said, there is a perception of widespread fraud. Very often, when the Department investigate these allegations they discover some reason for people applying for social welfare. For example, they may be working part time. All I can do is assure the House that in so far as fraud exists, we will pursue it. It is very important that we do. I can also assure the House that it is a very small figure in relation to the total.
Can the Minister, in respect of the proposal to employ extra staff within his Department to pursue this perceived fraud, indicate to the House the numbers and the cost that this proposal would involve?
If the Deputy tables a question about that matter I will reply to it.
Will the Minister agree that the amount of under payment to social welfare recipients is greatly in excess of the amount of the alleged fraud he has spoken about? Will the Minister agree that the widespread and false impression about such fraud is created by the type of question tabled today? Will the Minister agree that that impression is causing upset to the many honest people who depend entirely on social welfare payments, that it is unnecessary to harass any recipients further and that such action is having a degrading effect on those people?
I agree that it is important to keep this in its proper perspective.
Will the Minister agree that the proper method of quantifying something which relates to fraud and which by its very nature poses difficulty in relation to quantification is to resort to the method proposed by the Commission on Taxation in their Fifth Report, to conduct surveys by independent agencies among vast sections of the population to ascertain whether there is a significant amount of welfare abuse rather than relying on the Minister's internal anti-fraud mechanisms? Will the Minister look to the Fifth Report which was concerned with income tax evasion and apply the same principles in an attempt to quantify the amount of social welfare fraud here?
(Interruptions.)
The prejudice has been created by Members of the House, not by the recipients of social welfare.