Dáil Éireann Debate, Wednesday - 7 October 2009
103 Deputy Róisín Shortall asked the Minister for Social and Family Affairs if she will respond to the criticisms in the Comptroller and Auditor General’s annual report that significant amounts of money are likely to have been paid out by her Department in excess of entitlement in recent years. [34914/09]
Amharc ar fhreagraThe prevention of fraud and errors in payments is an integral part of the day-to-day work of the Department of Social and Family Affairs. Through initial means testing of applicants, reviews of existing claims and targeted control activity in high risk schemes, we aim to ensure that the right person is paid the right amount of money at the right time.
Where people have been paid more than their entitlement, we seek to recover as much money as possible and have a policy of prosecuting those who have committed serious fraud.
On the Comptroller and Auditor General's report, while the Department of course shares his concern about ensuring that people only get what they are entitled to, we disagree with the methodology underpinning some of the analysis in the report. In particular, we believe that it is not appropriate to suggest that past overpayments should be in line with figures from the fraud and error surveys or that there would be such a similarity between figures for future savings and those for past overpayments.
When fraud or error is found in an individual claim, future savings will arise from the person having his or her payment reduced or stopped. However, it may not be possible for the Department to calculate or collect the value of any past overpayments to the individual concerned.
Often the effective date of a revised decision will be a current date, rather than a retrospective one, in which case no overpayment legally arises. For example, all medical reviews resulting in termination are made from a current date.
In other cases, the ability of the deciding officer to establish when exactly the claimant's entitlement ceased will depend on the circumstances of the individual claim. For example, if a person who has been claiming a jobseeker's payment is found, on review, to have been working and the Department can ascertain the period of that employment, then it should be possible to calculate the value of the overpayment involved. However, if a lone parent is caught cohabiting, the person's payment may be stopped, which would result in future savings, but it is difficult to ascertain when the cohabitation started and thereby compute the value of any past overpayment. Similarly, when a payment is terminated because the claimant has moved address and therefore failed to respond to letters sent to him or her, the deciding officer will not have the evidence to make a retrospective decision resulting in a recorded overpayment.
The Comptroller and Auditor General's analysis should be read with this caveat in mind. None the less, I assure the Deputy that both preventing and recovering overpayments is a major priority for the Department and that we are determined to ensure that every euro of taxpayers' money is spent appropriately. To that end, we are not only doing our best to prevent payment errors at the initial application stage, but also targeting high risk schemes for frequent control activity.
The bottom line is that the Office of the Comptroller and Auditor General, which is a most respected office, has found that significant amounts of money have been overpaid by the Department and a small proportion of that has been detected. By any standards, that is a fairly poor performance by the Department. For example, in one of the schemes that has the highest fraud and overpayment rate, the one parent family payment, surveys suggest that in 2007, €67 million was overpaid yet the Department detected only €5 million of that. That cannot be a good performance. There is a concern that the Minister is not targeting those schemes most prone to fraud. Would the Minister agree, given the vast amounts of money involved and given the pressures on the Department's budget, that it makes sense to bring a much sharper focus to the area of overpayment and fraud, and for that reason to have far more frequent fraud and error surveys in which she would target those schemes most prone to fraud because she does not seem to be taking that approach?
In fact, the Department is now working on the basis of not only fraud and error surveys but, as a result of those, of identifying the high-risk categories, and at the time of application even noting which are the ones that need to be constantly reviewed. For example, the Department is aware that within child benefit there are certain sectors that must be followed up frequently. In the case of the lone parent allowance, cohabitation is a problem but problems also arise where those lone parents are working — this is where they are more likely to exceed the qualification criteria for the particular scheme. Equally, with some areas of disability there are some who will undoubtedly be permanently on the payment and there are others who need to be constantly reviewed. The Department does do that, and has become expert at identifying high-risk groups.
The Deputy mentioned in particular the example of the lone parent. It is worth reiterating that if overpayments have been made to a cohabiting parent, and the parent says the cohabitation only started last week, there is no evidence that would show that it has in fact been going on for two or three years and allow the Department to claim overpayment for that period. However, the Comptroller and Auditor General has said that is where we should be able to make savings. If a pensioner dies, in contrast, the Department can check exactly when that happened — we have a system of cross-references now anyway — and know when the overpayment started, so it can claim the money back. Thus, there is variation among the different schemes.
If any amount of money is given incorrectly, every effort should be made to try to retrieve it for the State. However, it was established that overpayments amounted to an equivalent of 0.32% of the total social welfare expenditure. This must be viewed in the context of the number of payments being made every week, which is 1.25 million. I accept it is important to identify high-risk groups, and that is what we do. It is important to conduct regular reviews on as many recipients as possible and retrieve money that has been overpaid.
We can all quote figures. The Comptroller and Auditor General found that of the five schemes surveyed, overpayments were recorded in a quarter of cases. That is a high number.
The Minister diverted staff away from fraud and into processing, which was perhaps justified on a short-term basis. Is there now a full complement of staff dealing with fraud? Does the Minister accept the conclusion of the Comptroller and Auditor General that the Department was far overstating the amount of savings in terms of money actually retrieved?
The Comptroller and Auditor General is using a fraud and error survey to determine that overpayments were made, although the survey was done to identify the high-risk groups in order to make savings in the future. I am not saying no overpayments were made; of course they were, and we always try to get them back. However, the Comptroller and Auditor General was using a survey that was designed for a completely different purpose to extrapolate figures. It is not true that he said overpayments were made in a quarter of cases. That only referred to a particular table in the report, which does not show the proportion of overpayments in all welfare claims reviewed.
It showed that €255 million euro was saved on those schemes.
There are currently 398 inspector posts occupied in the Department, and an additional 40 inspector posts were approved this year, of which 21 have already been filled. The remaining 19 will be assigned over the coming weeks.
104 Deputy Olwyn Enright asked the Minister for Social and Family Affairs the amount of money saved in her Department through fraud prevention measures to date in 2009; and if she will make a statement on the matter. [34865/09]
Amharc ar fhreagraThe amount of money recorded as control savings by the Department by the end of August 2009 was €312 million, which represented an increase of €5.5 million on the same period last year. It should be noted the Department only records as control savings moneys which are saved as a result of reviews of existing claims. However, particular focus is currently being placed on prevention of fraud and error at the claim application stage. This is the most cost-effective mechanism of reducing losses through fraud and error in social welfare schemes, but savings achieved in this way are not included in the published figures for control savings.
The Department has introduced a number of new measures to target control activity at high risk categories of claimants. For example, the special investigation unit is undertaking more regular interviews of high-risk recipients of jobseeker's payments, and those in the Border regions have put an increased emphasis on control of claims from applicants with a previous address in Northern Ireland. In addition, the option to receive payments by electronic fund transfer has been removed for new claimants for jobseeker's payments, who must now attend in person at the post office each week, thus confirming their continued residency in the country. Their claim is automatically suspended where two consecutive payments are not collected.
One-parent family payment recipients with earnings are being targeted for ongoing review, as this scheme has been identified as high risk in the Department's fraud and error surveys. We have also stepped up measures to prevent people fraudulently claiming child benefit while no longer living in Ireland. To that end, the frequency of mail shots to validate continued entitlement to child benefit has been increased to three months for EU workers and resident non-Irish national customers. New data matches with other public bodies have also been initiated to effectively target reviews and generate savings.
Overall, the Department is moving to a risk-based system of claim review, which it is hoped will achieve better value for money by focusing scarce resources on the most appropriate cases. A new control review policy for the disability allowance scheme was introduced in January 2009, which involves assigning and recording a risk rating at the award and review stage of all claims in the medical and means categories. A similar risk-based control review policy is being piloted for carer's allowance, with the same approach planned for invalidity pensions.
It is worth pointing out that the number of anonymous reports from members of the public has increased dramatically in the past year, with more than 4,600 reports made at the end of September 2009 compared to approximately 1,000 in 2008. Each report is followed up. I am determined to ensure that abuse of the social welfare system is prevented and is dealt with effectively when detected. In this regard, the control programme of the Department is carefully monitored and the various measures are continually refined to ensure they remain effective.
I am interested in the Minister's last point about anonymous reports because it was stated at a meeting of the Joint Committee on Social and Family Affairs — I do not know whether it was the Minister herself or an official who said it — that despite the large number of anonymous reports, when they are actually investigated the percentage that turn out to be correct is quite small. I do not know why the Minister threw that in at the end of her reply.
The Minister had a target of more than €600 million in savings in this area for this year. Will she meet this by the end of the year, bearing in mind that savings were at €256 million up to the beginning of September? How will she make up the difference?
An example from the report of the Comptroller and Auditor General was that of welfare officers in County Longford, where the number of checks on whether claimants were genuinely seeking work was reduced by three quarters in the middle of last year, and checks ceased altogether by December of last year. That is an example of one office.
I am amazed by stories of new claimants who have not previously been part of the social welfare system going into social welfare offices, in places where they are definitely not known, and not being asked for any form of identification. Many people have said this to me. They have a card but there is no photograph on the card. What is the Minister's response to this? There is a basic level at which every single member of staff who deals with the public can contribute to preventing fraud, rather than just the specialists.
It was worth mentioning in my reply that people are making reports of possible fraud to the Department because it shows the value people are placing on money. Even if many of those who are the subjects of such reports are not fraudulently claiming, the State saves money from the ones who are, so it is still valuable. What people generally do not realise is that there can be quite a high disregard of earnings in some schemes; thus, a lone parent can earn up to €146 per week and still claim the full allowance, but the person complaining may not realise this.
With regard to the target, we had achieved €312 million in savings through fraud prevention measures by the end of August. It is difficult to say what our control savings will be by the end of the year, but the target is high, at €616.5 million. To be honest, I cannot see us reaching that target. The number of reviews has gone up, but the savings from those reviews have not been as great as expected. We have saved more on child benefit, carer's allowance, family income supplement and illness benefit than we had expected, but we have not quite reached the target for unemployment benefits. Perhaps people are not able to get work. In addition, it has been indicated to me that people are now working from within their own homes. One can be a professional person working on a computer while claiming benefits, but an inspector has no right to go into one's home and check, although he or she could go into a building site, for example.
I am anxious to progress with the PPS card, about which I am currently in negotiation with the Department of Finance, because it would be a wise way to cut expenditure. The new PPS card will have detail in it which is personal to the recipient.
How many spot checks are being carried out at this point? We are all hearing about businesses that cannot compete in the private sector because when they give quotes they are competing against people who are on social welfare.
Why did the Minister set a target of €616.5 million given the smaller target set last year was not reached and what advice did she receive in setting that target? Does the Minister have a breakdown of what it is she hopes to achieve in terms of savings from fraud versus error, namely, people who are collecting benefits to which they are not entitled versus mistakes made within the Department?
All of that to which the Deputy refers comes in under the heading of control. We have an amount we expect to achieve in respect of each of the different schemes.
The Minister must have a breakdown of what constitutes fraud as compared with error.
Please allow the Minister to respond with interruption.
It is only when one identifies a case that one can determine what is fraud and what is error.
Does the Minister not break down the information?
We have identified how many reviews we will make within each scheme and how much we hope to gain from those reviews. We have over-achieved in respect of the number of reviews in some areas and have under-achieved in terms of the amount of money saved. As I stated earlier, we recouped more than we expected in respect of carers and less than we thought under other schemes. The number of reviews has increased. Spot-checks are being carried out across all the schemes.
There is a large black economy of people who are working and claiming benefits. Not alone are there people working and claiming social welfare, there are people who are working, not claiming social welfare but are demanding cash payment for work done. Many people are willing to pay them cash. People resent that their incomes have been reduced, they have had to pay levies and so on and they want to obtain better value for money. However, in paying cash to a tradesman or person providing a service, they are denying to the State the taxation in that regard, which money could be reinvested in the economy.
How will the Minister address the problem?
