I thank the Chairman and members of the joint committee for the opportunity to discuss the issues that I regard as current priorities for the Department of Social and Family Affairs. I will probably not speak for 20 minutes but I will, at the end of this presentation, address the pensions issue raised by Deputy Enright. I look forward to what I hope will be a constructive meeting and to the opportunity to share ideas with members.
As members may be aware, 2010 is the European year for combating poverty and social exclusion. The Government is determined to ensure that we do as much as we can to assist the wide range of people such as jobseekers, people with disabilities, carers and pensioners who depend on the welfare budget for vital support. We are doing our utmost, in the context of a very tough budgetary environment, to protect the most vulnerable people in society.
Some €21.1 billion will be spent on social welfare this year, which is €676 million or 3.3% more than the expected final expenditure figure of €20.4 billion for 2009. Given the breadth of the social welfare area, it is naturally very difficult to pick just a few priorities and I will be happy to respond to any issues that members raise after my opening address. In the interests of brevity I will focus now on five areas. These are: ensuring timely access to income supports for jobseekers in particular; measures to get people back into work; assistance with debt problems, including mortgage debt; pensions policy; and tackling fraud and payment errors.
My main priority in 2010 is to ensure that customers get paid on time. I fully appreciate that becoming unemployed and having to claim a jobseeker's payment is stressful enough in itself and that it is vital that people get access to financial supports as quickly as possible. As members will all be aware, the number of people on the live register grew by more than 34% in the 12 months to January 2010. The Department has sought to manage this increase as well as it possibly can and to keep delays to a minimum. Improved processes and procedures have helped to increase productivity among existing staff. More than 400 extra people have been assigned to claim processing since May 2008 and centralised units have been set up to relieve some of the pressure on the busiest offices. At the same time the Department has been examining all aspects of the work associated with the processing of claims and streamlining them wherever possible without compromising scheme controls.
The average processing times for claims decided in December were two weeks for jobseeker's benefit and just over six weeks for the jobseeker's allowance. This is the average nationally and there are fluctuations between offices. In December, four out of every five claims for jobseeker's benefit were processed within three weeks and two out of every three claims for the means tested payment, jobseeker's allowance, were processed within six weeks. This is the average nationally.
While processing times are still too long in some areas, the additional resources and process improvement measures that have been put in place are having an impact. For example, the number of jobseeker's claims awaiting a decision on 9 January last was 30% lower than in July. Processing times can vary depending on the complexity of the claim and the availability of the necessary documentation from the applicant and-or their employer. In the case of jobseeker's allowance claims, carrying out means assessments and determining whether a claimant satisfies the habitual residence condition can also take time. Processing times can also vary from office to office due to the extent of the increased claim load, the number of staff vacancies, the duration of such vacancies and the turnover of staff in the office.
A number of initiatives are planned for the coming year to reduce delays. Members will be aware that a new system was piloted in some local offices last year through which most jobseeker's benefit claims can be taken and decided upon during one personal pre-arranged appointment. This has now been rolled out to 33 local offices. We intend to extend it to a further four offices over the next month or so and more throughout the year. We have currently on trial a new arrangement for customers who are applying for jobseeker's allowance on the termination of their jobseeker's benefit entitlement. In such cases, where there are no elements of self employment or property involved in the means assessment, the person will self-certify the various components of his or her means and a decision will be made by the deciding officer without the need to refer the claim to an inspector. As a control measure, a certain proportion of these claims will be selected at random and will be referred to an inspector for verification of the declaration of means. It is expected that this initiative will be rolled out to the network of local offices in the coming months. These and other initiatives should help to reduce processing times for jobseekers' schemes in particular. Measures are also being put in place to try to minimise delays in processing other payments.
Apart from providing people with timely access to financial supports after they lose their jobs, the Government is determined to keep as many people as possible in work and to help people to move from welfare and back into employment. While the Department of Enterprise, Trade and Employment has primary responsibility for job creation and employment strategy, my Department has a specific role to play in welfare-to-work measures.
Last year, improvements were made to the back to education allowance and the back to work enterprise allowance. The work placement programme was also established, allowing people to gain nine months' work experience while continuing to receive their existing social welfare entitlements. The programme will ensure that the unemployed are job ready and are still attached to the labour market and will therefore be better positioned to avail of new job opportunities when they arise.
The programme was originally launched in May 2009 and it was reviewed in November with revised criteria coming into operation from 1 December 2009. The revised criteria considerably broaden the accessibility of participants and providers to the programme. The Department of Finance has confirmed that the work placement programme will continue to operate in the public service and is not affected by the moratorium on recruitment.
A number of other measures have been taken over the past year to help move people off welfare and into work, education or training. We have placed a particular focus on jobseekers aged under 25 by sending education information out to them and by changing the jobseeker's allowance to provide a significant financial incentive for them to take up education, training or employment. We have also ensured that apprentices who are being laid off from the construction industry are referred to FÁS as soon as they sign on and a network of 63 facilitators is now in place to provide information on progression options to people on social welfare.
I mention two developments planned for 2010 which we expect to be of particular benefit. The first is the new employer jobs (PRSI) incentive scheme, announced in the budget. Under this initiative, an employer who takes on a person who has been on the live register or work placement programme for six months or more will be fully exempted, subject to certain substitution conditions, from the liability to pay the employer's portion of PRSI for the first year of that employment. The legislative basis for this scheme will be provided in the spring social welfare Bill but it will apply to qualifying jobs created since January.
We also intend to implement revised activation arrangements in 2010 which will be grounded in a profiling system using the statistical model developed by the Department in conjunction with the ESRI. Profiling will facilitate early targeted intervention for those who need it most, resulting in better outcomes and potential programme savings. The profiling model uses a range of characteristics, and weighting applied to them, to predict who is likely to become long-term unemployed. The characteristics include education level, literacy or numeracy difficulties, age, gender, number of children, history of unemployment, etc. The accuracy, or predictive capacity of the model developed, is high by international standards. It is particularly accurate in predicting outcomes at 12 months. At the 80% cut off point — that is those estimated to have an 80% chance of remaining unemployed — the model is 83% accurate for males and 85% accurate for females. Essentially, when the profiling system is ready, we intend to move from the current arrangements, whereby everyone is referred to FÁS after three months on the live register to a system which refers those most at risk of long-term unemployment at a much earlier stage.
Apart from jobseekers in general, there are two other groups of people for whom the Government would like to see greater social inclusion through employment as appropriate. These are lone parents and people with disabilities. The current one-parent family payment provides long-term income support until children are 18, or 22 if in full-time education, to those parenting alone. This duration of payment is not in the best interests of the recipients, their children or society. Social welfare supports for lone parents should be designed to do the following: prevent long-term dependence on social welfare income support and facilitate financial independence; recognise parental choice with regard to care of young children, but with the expectation that parents will not remain outside of the labour force indefinitely; and include an expectation of participation in education, training and employment, with supports provided in this regard.
To meet these social policy objectives the Government is considering various options for limiting the length of time for which the one-parent family payment can be paid, including the age of the youngest child. Any such changes would be phased in over a period of years for existing recipients to enable lone parents to access education and training and to prepare for their return to the labour market. The proposal will bring Ireland's support for lone parents more into line with international provisions where there is a general movement away from long-term and passive income support. The EU countries achieving the best outcomes in terms of tackling child poverty are those that are combining strategies aimed at facilitating access to employment and enabling services, for example child care, with income support.
It will not be possible to progress some of the proposals as outlined in the Government discussion paper, including the removal of the cohabitation rule, due, in part, to current economic conditions. The question of the relative treatment of two-adult versus one-adult households in the social welfare system has been a source of some debate over the years and I understand the committee is currently examining this issue. I look forward to hearing the outcome of these deliberations. There are, clearly, some economies of scale arising in shared households, and it is reasonable that a means-tested scheme should take account of these. ESRI research concluded that, at income levels similar to social welfare rates, the income required by a couple to reach the same standard of living as a single adult was approximately 170% of the single adult rate, which is the rate currently used in the Department. To remove limitation, that is to pay two full adult rates to a couple, is very costly and not feasible in the current economic climate. The Government is also conscious that income supports are not sufficient in themselves to address issues of parenting alone. Issues including access to child care support, education, training and activation measures must also be addressed by the relevant Departments and agencies if lone parents are to be enabled to access employment.
In the area of disability policy, the Department is examining how to address a key limitation in the current system. As committee members will know, the structure of welfare provision in Ireland for people with illnesses or disabilities reflects a view that people could be simply categorised into those who were capable of full-time work and those who were not. In essence, this places the focus on incapacity rather than capacity. This is something I am keen to see addressed. The OECD, for instance, commented in a recent study on the barriers facing people with disabilities that the focus on incapacity rather than capacity carries negative consequences for people with disabilities and their families, who may be trapped in welfare dependency as well as having a negative impact on labour supply. The intention is to introduce enabling legislation in the forthcoming social welfare Bill to facilitate the introduction, on a pilot basis, of a partial capacity scheme. The timing of the introduction of this pilot scheme will depend on getting the necessary structures in place, for instance with regard to developing appropriate medical protocols to be used in determining the level of capacity which a claimant will have. I hope the scheme can be in place during this calendar year. The Department will also focus attention on the recommendations emerging from a review of the disability allowance scheme, which is currently being finalised. Among other things, the review has been examining the factors which have given rise to the substantial increase in the numbers availing of the scheme, the effectiveness of the arrangements in place to facilitate the taking up of employment and the approach of activation of people with disabilities.
The third key priority I would like to discuss is assistance for people with debt problems, including mortgage arrears. As members will be aware, the Money, Advice and Budgeting Service operates 65 offices around the country, where people can meet with advisers and get face-to-face help with debt problems. It also runs a national helpline and a website advising on general debt issues —www.mabs.ie. MABS advisers can negotiate with lenders, including mortgage lenders, on behalf of their clients. Under the Financial Regulator’s statutory code of conduct on mortgage arrears, published in February 2009, lenders must refer borrowers in difficulty to MABS so that they can have access to independent advice and assistance. A protocol has also been agreed between MABS and the Irish Banking Federation. Under this agreement, IBF members are committed to working with MABS and seeking to agree an affordable and sustainable repayment plan for people who cannot meet their current mortgage payments. IBF lenders have also committed that legal action will not commence as long as there is compliance with the repayment plan.
Some members raised with me on previous occasions the issue of waiting times for MABS appointments. All MABS offices operate an appointment system for clients. Clients with urgent difficulties are prioritised for attention and are dealt with promptly. Less urgent cases are referred to the MABS helpline and to the MABS website in the first instance. Over 90% of callers to the helpline find that their money management and budgeting issues can be resolved with the assistance of the helpline adviser. Some 10% of callers are referred to the local MABS for assistance. From first point of contact to first appointment with a money advisor, the average waiting time is currently 4.5 weeks. During the waiting period, clients are assessed and those in need of immediate assistance are given a priority appointment. Others are provided with assisted self-help to ensure that they have taken steps to assess their situation and, if appropriate, they are supported to take holding action with their creditors. In 2009, funding of almost €18 million was allocated to MABS. This included provision for 19 additional money advisers, bringing the total number of staff to 271. MABS funding for 2010 is included in the CIB allocation of almost €46 million.
Aside from assisting people to agree new repayment plans with lenders, the Department also funds the mortgage interest supplement scheme to provide financial support to people who are unable to meet their mortgage repayments as a result of a change in their circumstances, such as loss of employment. At the end of December 2009, there were 15,100 people in receipt of mortgage interest supplement. Recipient numbers have increased almost fourfold since the end of 2007. The mortgage interest supplement provides an invaluable support to people all over the country who have lost their jobs. The scheme is being kept under review to ensure that it remains effective in the context of the current economic environment.
The issue of the most appropriate comprehensive response to mortgage arrears crosses a number of Departments and for that reason the Government established an interdepartmental group under the chairmanship of the Department of Finance. The Department of Social and Family Affairs is represented on this group. The broader issues of personal debt, including debt enforcement, are also being considered by the Government, under the leadership of the Department of Justice, Equality and Law Reform.
Before I leave the area of housing supports, I would like to mention our priorities for the rent supplement scheme. In order to ensure that taxpayers' money is not being used to pay inflated rents to private landlords, and to reflect the downward trend in rental prices in recent times, the maximum rent limits which apply to the rent supplement scheme are being reviewed again and new limits will be put in place. We will also work closely with the Department of the Environment, Heritage and Local Government to ensure that more people are moved onto the rental accommodation scheme. Our overriding objective with regard to mortgage interest and rent supplements is to help people cope with long-term difficulties with paying their mortgage interest or rent costs, while avoiding long-term dependency on these supports.
Our priority with regard to the national pensions framework is to ensure it is published as soon as possible. The Taoiseach and Minister for Finance have indicated we hope to be in a position to publish it shortly.
The final priority area I would like to discuss is the measures the Department is taking to tackle fraud and payment errors. I assure members that the Department continues to prioritise control, using every available means to crack down on welfare fraud. Over 750,000 individual social welfare cases were reviewed in 2009, resulting in €484 million savings through fraud and control measures, compared with €476 million saved in 2008. Savings on one-parent family payments realised over €117 million, followed by illness schemes with savings of almost €90 million. There were child benefit payment savings of just over €89 million, savings across pension schemes of €84 million and savings in jobseekers' payments of €60 million. In addition, some 1,560 employers underwent PRSI compliance inspections, which secured €5.6 million in savings. The Department constantly refines the systems it uses to reduce fraud and error in the context of emerging risks. For example, we have ensured that new recipients of jobseeker's payment must collect their money in person, we are targeting anti-fraud activity in the Border areas at applicants with a previous address in Northern Ireland and we are issuing more frequent mail shots to non-Irish nationals in receipt of child benefit requiring them to certify their continuing entitlement to the payment. Last year, new data matches were put in place with bodies such as the Personal Injuries Assessment Board, the Criminal Injuries Compensation Tribunal, the UK Department for Work and Pensions and local authorities to identify undisclosed income.
I recently announced a new on-line facility for members of the public to report their suspicions of social welfare fraud. With the new service, members of the public are asked to provide as much detail as possible about the case they are reporting, and with the on-line facility they can do so completely anonymously.
This past year members of the public have shown a distinct lack of tolerance for abuse of the welfare system and are increasingly reporting alleged cases of fraud. In the past 12 months, our central control section had more than 6,400 reports from members of the public compared to just over 1,000 in 2008. Members of the public can phone, write or e-mail in their suspicions, and the new on-line facility means that this can be done directly and anonymously from the Department's website. Each of these reports is followed up to see if action is necessary, and very good intelligence information is being provided for our inspectors to follow up.
The Department has also ensured that the risk of overpayment has been reduced through the development of more integrated IT systems. As members will be aware, we also included extra powers in the recent Social Welfare Bill in regard to bulk exchange of information with other countries, vehicle checkpoints and receiving information from financial institutions.
The 2010 target for control savings is €533 million and we intend to achieve this through effective controls at the applications stage and through reviews of claims already in payment. The first public service cards are expected to be issued in the second half of 2010. This new card will include a photograph and a signature. One of the anticipated advantages of the new card is that it will help to reduce fraud and error which result from the incorrect identification of benefit claimants.
