EXCESS and irregular social welfare payments are a “significant problem” for the Department of Social Protection and need to be urgently tackled, according to the C&AG report.
The department was accountable for spending €20.5bn last year, with the report noting that the fastest increase was on social welfare for increasing numbers unemployed, while the balance in the department’s Social Insurance Fund Investment Account at the end of last year stood at €871m – a fraction of the €3bn it stood at the year before.
In the chapter on the regularity of social welfare payments, the C&AG report also looks at the problem of excess welfare payments through fraud, claimant error and departmental or administrative error.
According o the C&AG, the department recorded overpayment debts of €67m, about €47m of which related to vote-funded payments and €20m to the Social Insurance Fund.
In addition, another chapter notes how the department recorded welfare overpayment debts of €66.8m last year, which together with previously recorded debts put the total amount recorded for recovery at €310m. Actual recoveries stood at €32.9m.
By the end of last year 46% of those found to have been overpaid were servicing the debt through withholding amounts from current welfare entitlements. Last year also saw the highest number of people fined as a result of court proceedings over welfare fraud – 225, with another 108 welfare recipients receiving sanctions ranging from prison sentences (11) to the Probation Act (48).
While the department said it saved €484m in 2009 through 750,000 control reviews, the report states: “It is not possible to report on the number of cases generating savings due to review proceedings and software limitations.”
A random sample of 1,035 cases where the state pension was paid returned 989 assessments which found 3.3% of claimants were receiving more money than they were entitled to, while 2.2% were receiving less than they were owed, with the variables considerably higher than the comparable figure in Britain.
Likewise, a random sample of those receiving Jobseekers’ Allowance found overpayment in 11% of cases and underpayment in 4.1% of cases. Fraud was responsible for 3% of the cases, with claimant error accounting for 8.6% and departmental error accounting for 4.1%.
The report states: “Major schemes not yet subjected to fraud and error surveys include Jobseekers’ Benefit, Contributory Widows’ Pension, Invalidity Pension and Maternity Benefit,” meaning the level of excess payment is “uncertain”.
It concludes: “The evidence from the fraud and error surveys that have been carried out by the department indicates that there is a significant problem of excess, and therefore irregular, payment in relation to many of the welfare payment schemes it operates.”
It said excess payment across non-surveyed areas is estimated to be 3.4%, while overpayments are not recorded in all cases, meaning there is not a “reliable measure of the financial impact of the irregular payments in a year”.
The department has said, however, that it intends with future fraud and error surveys to include an additional six-month follow-up check.
The C&AG said the department needed to draw up a medium term programme for reviews of all major welfare schemes and address the key areas of fraud, client error and departmental error.
© Irish Examiner Ltd. All rights reserved