Ending of lottery compensation scheme at heart of dispute

Q. What is Rehab?

A. An international group of charities and commercial companies with over 3,800 staff supplying health and social care, as well as training, education, and rehabilitation, services in Ireland, Britain, the Netherlands, and Poland.

Its services are aimed at people with physical, sensory and intellectual disabilities, mental health issues, and people with autism and acquired brain injuries.

Rehab says it will train 5,000 people in Ireland this year, and placed more than 450 people in jobs during 2012.

In total, Rehab says it helps 80,000 people and their families a year in 250 locations.

Among its core “values” it lists “achieving growth, sustainability, and value for money in partnership with its customers”.

Q. Is it a state agency?

A. No, but the HSE and Fás paid about €75m for its services in 2012. It also receives millions of euro a year from the Charitable Lotteries Fund.

Q. What is the Charitable Lotteries Scheme?

A. This was set up in 1997 after charities complained there funding had been badly hit by the introduction of the national lottery a decade earlier, and because their weekly prizes are capped at €20,000.

Under the scheme charities with products similar to the National Lotteries receive taxpayer funds allocated in the annual budget. This peaked at €8.6m in 2010, and dropped to its lowest point of €4m last year.

Charities are awarded funding in ratio to the gambling products they sell, and all State donations must go on charitable purposes.

However, the scheme does not oblige charities to operate their products to achieve a profit in themselves.

Justice Minister Alan Shatter told the Dáil: “The scheme incentivises charities to leverage public funds by maximising their gross ticket sales with no regard to either operating costs or how much of the money raised by ticket sales is used fro charitable purposes.”

The scheme has paid out €120m to charities since 1997, the bulk going to Rehab. Mr Shatter has decided to phase out the scheme. Rehab is engaged in legal action against the State regarding its lottery activities.

Q. Why is Shatter concerned?

A. The minister told the Dáil that Rehab scratch card sales of €3,969,000 in 2010/11 generated profits of just €9,452, while bingo sales of €3,190,000 yielded profits of €548,000.

Q. What does Rehab say?

A. The charity branded Mr Shatter’s remarks, delivered under Dáil privilege, as “irresponsible” and “improper” in light of ongoing court cases. They also called the minister’s statement “misleading”.

Q. Why has the controversy arisen now?

A. Fianna Fáil public expenditure spokesman Sean Fleming claims the row is linked to the Government’s bid to privatise the National Lottery.

Mr Fleming said it as part on an agenda to kill off competition for the National Lottery.

Mr Shatter says he has been concerned about the low profits from gambling products for some time.

Q. How much of taxpayers’ money goes to organisations like Rehab?

A. The State provided €3.46bn in 2012 to so-called section 38 and section 39 voluntary organisations, ranging from big hospitals to small local groups. Rehab received €41m.

Q. What’s Rehab’s link to the crisis-hit Central Remedial Clinic?

A. The two organisations operate shared lotteries which generate receipts of €3.8m a year, with profits of €249,000 split evenly between the charities and the Mater Hospital.

Q. Is Rehab embroiled in any other controversies?

A. Social Protection Minister Joan Burton yesterday became the latest senior political figure to call on Rehab chief executive Angela Kerins to reveal her current salary.

Q. Will the row hit ticket sales?

A. Sinn Féin’s justice spokesman Pádraig Mac Lochlainn said that for every €4 in Rehab lottery ticket sales, just 1c was returned to the charity.

“Whenever somebody buys a ticket from anybody, you presume the vast majority of that profit is going to those who need it.

“You don’t presume it’s going to others. Rehab may have a very good explanation for it but we need to hear it and we need to hear it as soon as possible,” he told RTÉ.

Q. What happens next?

A. The Dáil’s Public Accounts Committee is to probe the charities sector.


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