€12.2m welfare overpayment blamed on 'official error'

There was a huge spike in welfare overpayments attributed to "official error" last year.

There was a huge spike in welfare overpayments attributed to "official error" last year, led by a €12.2m overpayment related to the implementation of a new illness benefit IT system.  

According to the latest annual report from the Comptroller & Auditor General, overpayments resulting from official error "spiked significantly" in 2019, mainly due to issues related to the implementation of the new illness benefit IT system, while the amount of money incorrectly paid out by the Department of Employment Affairs and Social Protection (DEASP) due to suspected welfare fraud continues to trend downwards.

The report also shows how in addition to the €12.2m overpayments, there were also illness benefit overpayments to a value of €2.5m in respect of 11,000 claimants due to payments being issued twice because of duplication in the scheduling of one weekly Electronic Funds Transfer (EFT) payment run last December.

It also found that while the rate of overpayment due to claimant error has also fallen, overpayments by the department due to "Estate cases"  — where a deceased individual is found to have had greater assets than had been declared during the most recent means assessment — also increased.

The report shows that of the 514,000 control reviews conducted between April and December last year, just 10% involved a face-to-face meeting with the payment recipient and another 2% involved a medical assessment or review.

The department has placed much emphasis on suspected welfare fraud in recent years, but last year it was utterly outstripped by claimant error, estate cases and in particular, official error, when it came to the cost of overpayments to the department.

According to the report: "Overpayments in 2019 of €12.2m in illness benefit claims arose on the transition to a new illness benefit claim processing system.

"In August 2018, the department transferred the operation of the illness benefit (IB) scheme from a legacy IT system to its core IT system. Problems arising from this transfer led to difficulties in processing illness benefit claims which had a negative impact on claimants. At the time, there were also issues with GPs in the ongoing delivery of the scheme resulting in the receipt of various types of certificates, many of which were not capable of being ‘scanned’ or input into the new system in a way that would facilitate its smooth operation.

"A decision was made to implement an auto-certification process to ensure claims could be processed in a timely manner and allow time to resolve issues with the GPs.

"The department stated that while it recognised that some overpayments would occur, it was a necessary and proportionate change to ensure that vulnerable or sick claimants were not deprived of financial supports. At the time, there was no estimate of the level of overpayments that might occur."

The C&AG recommends that the DEASP should ensure that new systems are fully tested and relevant stakeholders have agreed to operate the new system, in advance of material changes to a process. 

Another issue detected by the C&AG was "a high review intensity of claimants of the working family payment and the one-parent family payment — but the average overpayment detected is low relative to some other schemes."

It said that some schemes with relatively low levels of review,  such as pension and illness/disability payments, result in the identification of a proportionally high level of overpayment.