asked the Minister for Social Welfare if he will give details of the latest revelations regarding the level of fraud in view of the assurances given to the Committee of Public Accounts from the Accounting Officer at his Department in relation to the level of social welfare overpayments being a very small proportion of overall expenditure and his Department having very extensive control mechanisms; if he has satisfied himself with the level of controls in his Department; and if he will make a statement on the matter. [16888/96]
Written Answers. - Social Welfare Fraud.
Joe Walsh
Ceist:63 Mr. J. Walsh asked the Minister for Social Welfare whether he has reviewed the estimate of expenditure by his Department in view of his recent statement that 20 to 25 per cent of claimants were defrauding the system. [18547/96]
Seán Power
Ceist:65 Mr. Power asked the Minister for Social Welfare the steps, if any, he will be taking to explain to the Comptroller and Auditor General the discrepancy between the £16.4 million which was reported by his Department to the Comptroller as an overpayment recorded for recovery and the significantly greater amount of overpayments revealed by the recent Central Statistics Office survey report. [18575/96]
Batt O'Keeffe
Ceist:82 Mr. B. O'Keeffe asked the Minister for Social Welfare the reason for the high level of fraud in his Department; and the reason no action has been taken during his two years in office to tackle the problem. [17349/96]
Kathleen Lynch
Ceist:94 Kathleen Lynch asked the Minister for Social Welfare the further proposals, if any, he has to combat social welfare fraud; and if he will make a statement on the matter. [18614/96]
Micheál Martin
Ceist:138 Mr. Martin asked the Minister for Social Welfare if he will estimate the loss to the Exchequer arising by way of unpaid PRSI contributions due to the 11 per cent of persons on the live register who are in full-time employment. [18573/96]
Ivor Callely
Ceist:142 Mr. Callely asked the Minister for Social Welfare his Department's actual financial underestimated amount of social welfare fraud in 1996; the way in which such an under-estimation was calculated; and if he will make a statement on the matter. [18702/96]
I propose to take Questions Nos. 49, 63, 65, 82, 94, 138 and 142 together.
Experience in Ireland and internationally shows that it is very difficult to estimate the level of fraud and abuse of the social welfare system. However, the levels of detected abuse, with their resultant overpayments of benefit or underpayments of PRSI, show that there is a continual level of abuse, perpetrated by a minority of claimants and employers. This abuse can range from minor short-term irregularities to serious deliberate fraud of the system.
The only study of the absolute level of fraud and abuse was undertaken in 1987 by my Department with the assistance of consultants. The study covered both disability benefit and unemployment payments. In relation to unemployment payments the findings indicated that in Dublin some 2 per cent of the number of unemployment payments were based on claims which contained some clear element of fraud. In monetary terms this figure represented some 1.6 per cent of unemployment payments.
In addition, the review showed that 7 per cent of the sample of cases gave rise to suspicion. Later investigation of these cases showed that two-thirds were found to be actually bona fide, a minimal number were clearly fraudulent and no definite conclusions could be drawn about the remainder. Based on this study it would appear a reasonable conclusion that at that time there was a baseline fraud level of around 5 per cent.
Control activity of the Department has been a continuing feature of its work and, by its nature it is targeted at categories of claimants who are considered to be at higher risk of fraudulently claiming payments and at employments where there is greatest scope for working and claiming fraudulently or greater likelihood of non-compliance by employers with statutory obligations. The estimated value of savings arising from these activities in 1995 is estimated at £124 million. Some £50 million or so of this relates to the unemployment payments and this represents some 5 per cent of total unemployment expenditure. Total overpayments established by my Department in 1995 amounted to £16.4 million of which £11.6 million has been attributed to fraud or suspected fraud.
The recent CSO survey was not undertaken directly to identify the level of fraud in the unemployment payments system. It was designed to elucidate the reasons for the divergence between the labour force survey and the live register. However the findings of the survey give rise to concern in relation to the possible extent of fraud in the unemployment payments system and for this reason I immediately introduced a programme of control measures designed to tackle the issues.
Under the programme:
— all new claims for social welfare are carefully scrutinised to ensure that claimants understand their obligations, that they provide full and accurate information on their circumstances and that they are aware of the support services available;
— a programme of six monthly interviews of unemployed persons will be put in place to review people's continued eligibility;
— persons who are considered to be at particular risk of fraudulent claims will be subject to special review and, where appropriate, more rigorous signing arrangements;
— new claimants will be expected to register with FÁS; those who refuse offers of appropriate training and development opportunities will have their entitlement reviewed;
— new arrangements for the transfer of information between FÁS and my Department are being put in place to facilitate access to appropriate training and employment opportunities by claimants and to ensure that my Department is fully informed of claimants' responses to offers from FÁS;
— social welfare local offices are currently launching a major campaign to verify recorded addresses of unemployed claimants which will include a programme of home visits and other spot checks.
In addition there is a programme of employer inspections which will result in some 9,000 employers being visited by the end of the year to ensure that they are meeting their PRSI obligations.
The remarks made by the Secretary of my Department to the Committee of Public Accounts related to the level of overpayments of benefit and assistance which were identified as being due to fraud. This relates to payments which were established as having being made to people engaged in fraudulent claiming. It cannot be taken as a measure of the overall level of fraud in the social welfare system.
In the light of the indications emerging from the CSO survey I am arranging for further work to be carried out to get more detailed information on the problem which will enable the Department to deal more effectively with the issues and concerns.
A number of developments in the computerisation of the Department's services also have a significant impact in the area of control. A new computerised system known as the integrated short-term schemes system (ISTS), has been implemented in local offices. This system has enabled a greater focus on control at claim registration, particularly with regard to establishing the identity of claimants and validating increases claimed for dependants. This system is also enabling the computerisation of the supplementary welfare allowance scheme for the first time.
As part of the development of this system a major review of data held on both the central records and short-term schemes databases was undertaken. This review has assisted in improving the integrity of the data base. In addition cross checks are carried with other databases to highlight any iregularities.
In relation to the estimates of expenditure these are reviewed on an ongoing basis in the light of trends in the numbers qualifying for payment and in the level of payments under the various schemes.
It is expected that the measures I have introduced will have an impact over time on the live register figures and consequently on expenditure on unemployment payments. It is not possible at this stage to assess the precise impact on the 1996 outturn of expenditure but this will be addressed as part of the review of expenditure for 1996 and the Estimates for 1997.
It is not possible to estimate with any degree of accuracy the loss of income from PRSI contributions from those who are concurrently working and claiming unemployment payments. This estimate would depend on the type of employment i.e. employment or self-employment, the level of earnings from the employment and the appropriate rate of PRSI contribution applicable to those earnings.
There is also an ongoing programme of employer inspections which will result in 9,000 employers being visited by the end of this year to ensure they are meeting their obligations under the PRSI scheme.
I am determined to stamp out fraud and abuse of the social welfare system and to apply the full rigour of the law to those employers and claimants who deliberately set out to defraud the system.