Only 2% of welfare fraudsters prosecuted

ONLY a third of the €139 million in overpayments made to welfare recipients between 1998 and 2002 were recovered by the State.

An evaluation carried out by the office of Comptroller and Auditor General John Purcell also found only 2% of social welfare fraud cases resulted in prosecution.

Moreover, 88% of cases where the overpayment was in excess of €5,000 were not prosecuted.

The C&AG looked at the effectiveness of control activity in place in the Department of Social and Family Affairs to clamp down on overpayments.

In its review, it established that of the 39,000 cases detected in 2002 (with a total value of €29 million), over half arose as a result of fraudulent claiming.

The C&AG found that while the Department has focused its investigations on schemes which it considered to pose the highest risk of fraud and error, no formal assessments had been carried out. Nor did Social and Family Affairs analyse the lessons to be learned from review of overpayments that it had detected.

In terms of deterring fraud, the C&AG recognised there were practical considerations that may militate against taking prosecutions in all cases.

It found that while a high proportion (87%) of prosecutions had resulted in some form of penalty being imposed, the average fine imposed in 2002 was only €455.

"In view of the practicalities of increasing prosecution activity, it may be worth considering a greater array of sanctions such as administrative penalties and formal cautions," the report recommends.

The investigation focused on the year 2002, where the estimated cost of carrying out the dedicated control and detection activity was €18.1 million.

It carried out a survey of payments in two areas for that year unemployment and one-parent families.

While sounding a note of caution, the survey made a preliminary finding that 28% of one-parent family cases required a change to the payment amount. The comparable figure for unemployment benefit cases was only 2%.

It also emerged that about a fifth of overpayment cases are discovered when the Department looks at the assets of claimants that have died. About three in 10 cases are detected because of errors made by recipients or by the Department itself.