System’s inefficiency highlighted as €45m paid out mistakenly
Almost 40,000 welfare recipients were overpaid an average of €1,137 each, with more than half of the overpayments due to mistakes rather than deliberate welfare fraud.
A little more than €12m was recovered in cash while a further €10.5m is being recovered by making deductions from recipients’ current entitlements, but that still leaves outstanding overpayments accumulated over recent years amounting to €149.5m.
The report of the Comptroller and Auditor General states that the Department of Finance is to be asked to write off €82m of this amount as permanently unrecoverable. It also says, however, that a new ODM (Overpayments and Debt Management) computer system currently being rolled out should help track overpayments and boost their recovery.
The report reveals the difficulties the Department of Social and Family Affairs has in pursuing people who have deliberately defrauded the welfare system. A mere 256 prosecutions were brought to court last year involving payments with a total value of €1.5m — a fraction of the overall amount.
Those cases resulted in 99 people being fined a total of €72,321, or an average of €730 — usually much less than the original fraud. Four people were imprisoned and the remainder were give probation, a suspended sentence, community service or had their case withdrawn or struck out.
The statistics gathered for the report show problems getting cases to court, however. There were 806 outstanding prosecutions on hand at the end of last year — more than three times the number that were actually dealt with.
The report examined the problems of fraud and erroneous overpayments more closely by looking particularly at the payment of child benefit, one of the largest social support schemes that is paid to 570,353 claimants.
He found that the fraud rate was 2.6% among Irish claimants and 14.4% among foreigners, with six to eight new cases involving foreigners being detected each week.
Total suspected overpayments as a result of fraudulent claims in an average year was estimated to be €31.6m and although this was small compared with the €2bn overall cost of the child benefit scheme, it was noted that there was no systematic review of claimants that might help spot fraud earlier.
Only one in 33 claimants had their case reviewed last year. The department’s attempts to update files and weed out fraudulent claims included sending out 888,000 letters seeking fresh information between 2001 and 2005.
Only 2,273 claims were terminated as a result, however and there were concerns that the cost of organising the mail shots meant they were not cost-effective.
The report also noted that there was greater fraud associated with the electronic payments of child benefit into bank accounts than with collection o by benefit book.
