Department denies responsibility for checking if people are self-employed

Department denies responsibility for checking if people are self-employed

John McKeon, secretary-general of the  Department of Social Protection. Picture: Gareth Chaney/Collins

The head of the Department of Social Protection has denied that his body has responsibility for determining whether someone is self-employed or not.

In his addresses to the Public Accounts Committee on Thursday on the subject of bogus self-employment, secretary-general John McKeon said there are three bodies that determine employment status — the Department, the Revenue Commissioners, and the Workplace Relations Commission — and that his Department is responsible “for determinations in terms of social insurance”.

“We can’t do it alone, that can lead to confusion,” Mr McKeon said.

This would appear to contradict the testimony of Revenue chair Niall Cody in the previous week to the committee, who said that his agency’s job is “to ensure that the tax is collected, we are not the deciding agent”.

Test cases

Under questioning from Sinn Féin’s Imelda Munster, Mr McKeon said that neither Social Protection nor Revenue had classed couriers as being self-employed using a single test case in the late 1990s.

“I can’t speak for Revenue,” he said repeatedly. When asked whether his own Department uses test cases, Mr McKeon’s response was “no”.

It was then pointed out to him that multiple statements have been made on the record by Social Protection officials indicating that test cases are indeed used. Mr Cody had previously told the committee that such a case was used to deem all couriers as being self-employed “in the interests of uniformity”.

“You have to define what a test case is,” Mr McKeon said, adding that the actions taken by his Department were “long before my time”.

He said his Department had looked at a number of cases in order to match with the criteria applied by Irish courts as to who is self-employed and who isn’t. 

“They came up with five tests. Those tests apply to every case individually. If you want to call that a test case, then yes we did,” he said.

Mr McKeon described it as “just nonsense” the suggestion that all couriers are deemed to be self-employed. When it was suggested to him that Revenue had confirmed that to be the case, he replied “if Revenue use that criteria then I suspect that is the case.”

Mr McKeon acknowledged that a previous recommendation of the Social Protection committee, that all employment determinations should be centralised within the WRC, is “not a bad one”. He said that he doesn’t agree that an entire sector is being misclassified as regards their employment status.

“People say it but I’ve yet to see the evidence,” he said.

Upon a query from Ms Munster as to whether or not he would support an independent investigation into bogus self-employment, a request already denied by Revenue, Mr McKeon said he does not think one is “necessary”.

“I don’t agree with your proposition, but if the committee wants to recommend one that is entirely within its gift,” he said.

Public Services Card

Separately, Mr McKeon said that an additional €30m in costs attributable to the controversial Public Services Card project as at end of 2019, outlined in a recent report produced by Social Protection, related mostly to the inclusion of VAT in that report.

He said the previous figure of €68m, which he himself had provided to PAC in October 2019, had not included VAT as it is “not actually a cost” because “the Government pays VAT to itself”.

He said it had been included in the recent analysis in order to take a “conservative approach”.

Meanwhile, the committee heard that €31.4m paid by the Department to local employment services and Jobs Clubs in 2020 has been deemed as being in contravention of public spending laws.

The committee heard that the arrangements with those employment services “extend back over 20 years with no formal procurement taking place in this period”, something the Attorney General has advised to be “in contravention of good governance and public procurement practice”.

Mr McKeon told the committee the advice is “not advice we would have welcomed”, but it is “my statutory function to make sure procurement is legal”.

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