Ms Niamh O'Donoghue:

I thank the Chairman for allowing me to make a brief opening statement. I understand that the committee wishes to examine the chapter on supplementary welfare allowance in the Comptroller and Auditor General's annual report for 2011. As requested, I provided the committee with an update on the conclusions contained in this chapter.

In 2013, the Department will spend €20.243 billion on a wide range of schemes, services and administration. It is estimated that almost €718 million will be spent on supplementary welfare allowance schemes this year. The committee will be aware that there have been significant changes in the management and administration of the supplementary welfare allowance scheme within the last two years with the transfer of the community welfare service and some 1,000 staff from the HSE to the Department on 1 October 2011.

As chapter 24 of the Comptroller's annual report confirms, the total scheme expenditure on supplementary welfare allowance in 2011 was €911 million. As the committee will see from the material I have provided, the provisional outturn figure for the scheme for 2012 is €787 million. I and my staff in the Department are very aware of the responsibility we carry in ensuring the proper disbursement of Government funding.

Supplementary welfare allowance, SWA, is an important "safety net" within the overall welfare system. It is aimed at persons whose means are insufficient to meet their needs and those of their dependants. The main purpose of the scheme is to provide immediate and flexible assistance to persons in need who do not qualify for welfare payments under any other State scheme. This can take the form of basic income support, supplementary payments or exceptional needs payments in respect of certain living expenses a person may not currently be able to meet. Given the nature of the payments and that the people seeking payment may be in difficult situations, the Department can operate discretion, as set out in the legislation, regarding these payments.

The chapter focused on control within the overall scheme and covered the three main areas of basic income support, rent supplement and mortgage interest supplement. I will provide an update to the committee on each of these three areas.

Basic SWA or BASI, as it is known, may be payable to customers awaiting the outcome of a claim or an appeal for a primary social welfare payment. In 2011, expenditure on this scheme was €174 million in respect of more than 34,000 customers. Expenditure increased marginally to €179 million in 2012 in respect of 32,000 customers. The Department has introduced a number of measures which, when combined, reduce the recourse to BASI. This can be evidenced by a drop of more than 2,200 in the numbers on the scheme in the 12 months ending December 2012. The numbers on the scheme have continued to drop by almost a further 4,600 to a total of 27,800 in 2013.

One of the key measures is the new Intreo service, which is currently being rolled out across the Department's local offices on a phased basis. This new service integrates employment and income supports and provides for a streamlined and personalised service to clients in accessing job opportunities and availing of supports to enable them to get back to work at the earliest possible opportunity. The Intreo centres also include a single integrated decision-making team that integrates and streamlines the processes formerly undertaken by the different agencies, including the community welfare service, which has been amalgamated into the Department. The benefits of the integrated decisions process are already visible in terms of shorter decision times and in the reduced recourse to supplementary payments in the 28 offices where integrated decisions are now in operation. It will be extended to the remaining offices as quickly as possible this year.

Rent supplement provides short-term income support to eligible tenants living in private rented accommodation whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. Expenditure on this scheme in 2011 was €503 million in respect of almost 97,000 customers. There was a significant reduction of €80 million in the scheme in 2012 over that in 2011 yielding significant savings to the Exchequer while maintaining the demanded levels of service. This reduction can be attributed to a number of factors including a reduction of more than 9,000 customers, saving €25 million, an increase in the customers' minimum contribution they are obliged to pay, saving €35 million, and a reduction in the maximum rent limits available under the scheme, saving €20 million.

As the Department currently funds almost 30% of the private rented sector, it is essential that State support for rents are continually kept under review and reflect current market conditions in a balanced way. A review process is undertaken every 18 months to ensure value for money is achieved while, at the same time, ensuring people on rent supplement are not priced out of the market for private rented accommodation. The Department has recently completed the 2013 review with revised limits being put in place from 17 June 2013 up to December 2014. The recent review broadly reflects the new market trends with rises in counties Dublin and Galway and the majority of rural counties falling. In terms of policy, the aim is to transfer responsibility for the provision of rental assistance to persons with a long-term housing need from this Department to housing authorities using a new housing assistance payment, HAP, and to return rent supplement to its original objective, which is the provision of short-term income support to those who have become temporarily unemployed. Officials in the Department are working closely with those in the Department of the Environment, Community and Local Government to give effect to this transfer.

Mortgage interest supplement provides short-term income support to eligible people who are unable to meet their mortgage interest repayments in respect of a house which is their sole place of residence. Expenditure on this scheme in 2011 was €68 million in respect of almost 19,000 customers. In 2012, expenditure on the scheme was reduced to €55 million which can be attributed to a number of factors, including an increase in the customers' minimum contribution and a reduction of more than 4,300 customers. The drop in customers can be attributed to a change in the eligibility criteria for the scheme. Budget 2012 provided for the curtailment of access to the mortgage interest supplement scheme for the first 12 months the person is involved in the mortgage arrears resolution process, MARP. This process acknowledges that it is in the interest of both the lender and the borrower to address financial difficulties as speedily and effectively as circumstances allow.

As a Department, we have restructured and transformed our organisation with colleagues from a number of different organisations, including the community welfare service, bringing their unique insights and experiences to the work of the new DSP organisation. Once again I would like to express my own gratitude to all the staff across the Department who work hard every day. These are changing and challenging times for us and, in particular, for our customers who depend on us. The role of the community welfare service and the objectives of the SWA scheme are compatible with the goals and objectives of the Department. My colleagues and I continue to strive to provide income support and employment and activation services support particularly to those most in need while continuing to ensure the controls in place minimise incidents of fraud and error.