My Department recognises and accounts for contingent liabilities in accordance with generally accepted accounting standards. The international accounting standard (IAS.37) defines a contingent liability as:
(a) A possible obligation that arises as from past events and whose existence will be confirmed only by the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the entity; or
(b) A present obligation that arises from past events but is not recognised because:
(1) it is not probable that an outflow of resources embodying economic benefit will be required to settle the obligation; or
(2) the amount of the obligation cannot be measured with sufficient reliability.
In accordance with Government accounting rules and generally accepted accounting standards my Department does not make an accounting provision but discloses by way of note the detail of contingent liabilities in its annual statutory accounts. These accounts are the Vote 37 Appropriation Account and the Social Insurance Fund Financial Statements, both accounts are subject to audit by the Office of the Comptroller and Auditor General.
My Department does not carry out an actuarial analysis or a formal risk assessment in respect of contingent liabilities. My Department, however as part of its annual estimate process makes provision for all expenditure likely to materialise in each financial period.
My Department also in accordance with section 10 of the Social Welfare Consolidation Act 2005 carries out an actuarial review of the financial position of the Social Insurance Fund (SIF) every five years for the purpose of determining the extent to which the Fund may be expected, in the longer term, to meet the demands in respect of the payment of social welfare benefits. SIF related expenditure accounts on average for 46% of the Department’s annual expenditure. The last review was carried out in 2017 in respect of the period ending 31 December 2015. Upon the completion of each review the report is presented to both houses of the Oireachtas.
A copy of the 2015 Actuarial Report is available at: http://www.welfare.ie/en/Pages/Actuarial-Review-of-The-Social-Insurance-Fund-31-December-2015.aspx.
