Ms Josephine Feehily:

I appeared before another committee in January at which I said I was sorry for causing so much upset and confusion. I am happy to repeat that apology.

Many people have asked me if I would take the same action again. This is pertinent to the question of tax-gap analysis. It is a classic tax-gap analysis study. We had macro-data which showed that the Department of Social Protection was paying out X million. We knew from our files that we were getting tax on minus X million, something less than X million. We asked for the data and we received it in November. We did not have time to be as sophisticated with the information as we should have been but the money involved was so material in the context of the national budget arithmetic that we felt we needed to move quite quickly to secure those funds for 2012. We could have frightened every pensioner but instead we frightened a sub-set of pensioners, albeit a big sub-set. If we had gone public, every pensioner would have been frightened. That was our assessment but lessons have been learned, obviously.

For the information of the committee, we stated at the time that we estimated that in 2012 there would be €45 million extra and that the amount in a full year would be €50 million. We will not know for sure whether that has been achieved until the P35 data is submitted and we can compare two exact cohorts. However, I am absolutely confident it has been achieved. My confidence is based on the level of uplifts in PAYE payments from pension providers. We will be obliged to carry out an analysis in order to remove uplifts caused by USC, additional early retirements and so on. We have to do some work and we will not know for a time. However, I have no doubts about this.

We are now in the compliance phase. We indicated publicly last April that we would be beginning our compliance campaign with pensioners who have €50,000 or more in income in addition to their social protection pensions. We thought at the time that there were approximately 2,500 of these individuals but it emerged that there were 2,975. We have now closed 2,600 of those cases. Some 57% of them were yielding cases. In other words, we obtained money from them and the average yield per case was €4,177. I indicated that when we had looked at this cohort, we decided what to do thereafter. With that kind of yield, the decision was obvious and we moved on to the next cohort. Again, we achieved a yield of over 50% of cases and the average yield per case was €4,300. We are now examining the next tranche, which relates to people who have incomes of between €30,000 and €40,000 in addition to their social protection pensions. In all of the cases to which I refer, those involved had not reported their additional income. Our current operation is in the early stages but we have closed over 1,000 cases. We are finding that only a third of these cases are yielding, whereas in the higher cohorts over one half were doing so. The average yield per case from the current tranche is €2,300.

Chargeable persons, namely, the self-assessed, had the opportunity to make declarations up until it was necessary for them to make their tax returns in October or November. We alerted the tax agents and pre-populated the return with the social welfare information. In other words, the returns would have indicated that we know people have particular income. Despite the reminder, 6,600 individuals did not declare their social protection pensions for prior years. We have analysed these and some of them are fine. However, 14,700 individuals with earnings of over €30,000 - to be consistent with the PAYE group - did not report their social protection pensions in prior years. The compliance project in this regard will be starting next.

We are still working through this matter. The total yield, on top of the €45 million we included in the arithmetic, has been €11 million to date. That was recouped in just 12 months. That is sort of our biggest project. We have a high-level group which works closely with the Department of Social Protection. One of the things we have done is to carry out a REAP run for the Department in respect of social protection cases where there are indicators of economic activity on our files. REAP is our risk evaluation analysis and profiling system. I cannot discuss this matter in technical terms because I do not understand cloud computing but the Revenue and the Department have a cloud and we have placed the data to which I refer in this. Our respective officials are working collectively and collaboratively on cases by using the data collected by the Revenue and the Department. This data has been risk analysed and the officials are working together on it in the cloud.