Oireachtas Joint and Select Committees
Thursday, 7 December 2017
Public Accounts Committee
Comptroller and Auditor General 2016 Report
Chapter 16: Regularity of Social Welfare Payments
Chapter 17: Management of Social Welfare Overpayments
Chapter 18: Department Reviews of welfare Schemes, Social Welfare Appeals Process, Social Insurance Fund
9:00 am
Seán Fleming (Laois, Fianna Fail)
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Today's meeting deals with the Comptroller and Auditor General's Report 2016, chapter 16 regarding the regularity of social welfare payments, chapter 17 on the management of social welfare overpayments, chapter 18 the Department's review of welfare schemes and matters relating to social welfare appeals process and the social insurance fund, and the Vote insofar as it relates to these items.
We are joined by Mr. John McKeon, Secretary General, Ms Anne Vaughan, Deputy Secretary General, Ms Kathleen Stack, Ms Helen Faughnan, Mr. Jim McDonnell, and Ms Joan Gordon from the Department of Employment Affairs and Social Protection. We are also joined by Ms Gráinne McGuckin from the Department of Public Expenditure and Reform.
I remind members, witnesses and those in the Gallery to switch off their phones. They must go on airplane mode because if they are only put on silent they can still interfere with the recordings of proceedings.
I advise the witness that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the provisions of Standing Order No. 186 to the effect that the committee should refrain from inquiring into the merits of a policy or policies of Government or a Minister of the Government or the merits of the objectives of such policies.
I call on Mr. Andy Harkness to give the opening statement from the Comptroller and Auditor General's Office.
Mr. Andy Harkness:
Expenditure in 2016 on social welfare and labour activation schemes totalled €19.2 billion. Some 56% of that expenditure was charged to Vote 37 Social Protection. The remaining 44% was charged to the Social Insurance Fund, which is funded through social insurance contributions. The Comptroller and Auditor General gave a clear audit opinion on the accounts of both the Vote and the Social Insurance Fund for 2016, but drew attention to the issues reported on in the chapters before the committee this morning. These are interrelated matters, on which he has previously reported.
Chapter 16 deals with the regularity of social welfare payments. Irregular payments may arise where welfare recipients are paid amounts to which they are not entitled, or which exceed their entitlements. This may be as a result of deliberate fraud by claimants, or as a result of errors made by claimants or by staff of the Department. The results of fraud and error surveys of welfare schemes carried out by the Department over many years suggest that there is an underlying material level of payment in excess of entitlements in 2016 on both Vote and the Social Insurance Fund schemes.
Chapter 18 deals with Department reviews of welfare schemes. In addition to its fraud and error surveys, the Department carries out targeted reviews of claims in payment, referred to as "control reviews". These aim to ensure that current recipients of scheme payments continue to meet the relevant qualifying conditions. The need for control reviews is greater where schemes are means or income-based, and for medically-based schemes, as these are respectively more susceptible to fraud and error or non-conformity with eligibility criteria. Chapter 18 looks at the Department’s performance in implementing its planned control reviews.
Overall, the Department set a target to carry out one million control reviews in 2016. As figure 18.1 in the report indicates, it achieved almost 95% of this target. The examination noted that medical control reviews of medically-based claims are not being carried out as planned. When a claim is approved for payment, a medical review status should be assigned to it, indicating whether and when the claim should be reviewed in the future. Data relating to over 55,000 invalidity pension cases in payment at the end of December 2016 showed that over 4,000 claims, or 8% of the claim load, had no medical review status indicator assigned. Even when a review status had been assigned, it was evident that cases were not reviewed within the planned time. For example, over 4,000 cases had not been reviewed for three to five years despite having a review indicator of two years or less assigned to the claim. The report recommends an increase in the number of cases in payment being medically reviewed each year, and that a process be implemented to ensure all cases are risk categorised by having a medical review status indicator assigned including "do not refer again" where appropriate.
With regard to the family income supplement scheme, the report found that more than 10,000 claims had been automatically renewed by the Department in 2014-15, due to resourcing constraints, without being subject to the usual checking procedures. This created a risk that some claimants may have received payments to which they were no longer entitled. The report recommends that where normal controls are bypassed and claims are automatically renewed, additional steps be taken to reduce the risk of excess payments occurring.
There were more than 34,500 beneficiaries of the domiciliary care allowance scheme at the end of 2016. The report notes that no review of scheme claims had taken place since 2012. It also notes that although a 2013 working group recommended an appropriate control policy and procedures be developed for the schemes, this had not occurred.
On management of social welfare overpayments, where excess payments are identified through control activity, the Department stops or reduces the payment and may, depending on the circumstances of the case, record an overpayment debt for recovery. Chapter 17 examines the trends in recorded overpayments, as well as the level of legal action related to debt recovery.
The examination found that the introduction of a new debt recording and accounting system in 2014 has provided the Department with better information about overpayment debt, resulting in improved debt management.
Overpayment debt outstanding at the end of 2016 amounted to €482 million. New overpayments of €110 million were recorded during the year, and debts previously recorded totalling €11.5 million were cancelled.
The age of debts has a bearing on the likelihood of recovery. Overpayment recovery in the first year after identification is about 30%, and increases to between 50% and 60% after three to four years. At the end of 2016, almost half of the outstanding debt was over five years old, while almost a quarter was over ten years old.
The amounts due for recovery vary very significantly. Some 36,000 debts were less than €100 each. These were either small debts recorded in the first instance, or the residue of debts the bulk of which have been recovered. At the other end of the scale, over 1,100 debts each in excess of €50,000 accounted for a total of €90 million due. Those large cases are being managed by the Department's central debt unit. I understand that, as a result of additional resources being assigned, debts of €30,000 or more will in future be managed by the unit.
Whether an overpayments debtor remains in receipt of a welfare payment also has a bearing on the recoverability of a debt. About one third of debtors were in receipt of a welfare payment at the end of 2016. Half of these were actively repaying their debt in instalments, through deductions from their current welfare entitlements. The remaining two thirds of debtors were no longer in receipt of a welfare payment and just 8% of these were actively repaying their debt.
Seán Fleming (Laois, Fianna Fail)
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I thank Mr. Harkness. Mr. McKeon is very welcome.
Seán Fleming (Laois, Fianna Fail)
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It is Mr. McKeon's first meeting as new Secretary General and Accounting Officer of the Department. I now call on him to make his opening statement.
Mr. John McKeon:
I thank the Chairman and the committee for inviting me here today.
If I may, I would like to start by drawing the members' attention to the fact that 2017 marks the 75th anniversary of the publication of the seminal Beveridge report in the United Kingdom and the 70th anniversary of the establishment of the Department of Social Welfare in 1947. These developments marked a shift in the attitude to the provision of welfare – from seeing welfare as being restricted to the relief of extreme destitution to seeing it as an essential component needed to sustain modern society; a recognition that market economies only attribute value to those who can contribute to production and that a mechanism is required to share the gains from economic activity with those who cannot contribute, either due to infirmity or illness, because they do not have an opportunity to contribute due to the vagaries of the economic cycle and, as the welfare system developed, to recognise the value of non-market activity such as caring and home making.
In the years that followed, the remit of welfare was extended beyond the provision of limited pensions and what was then called "outdoor relief" to encompass invalidity and disability payments, payments to carers and lone parents, payments to new mothers on maternity leave, payments to people with families in low-wage occupations and payments to support people take up education, as well as payments to encourage employers to recruit disadvantaged jobseekers, including people with disabilities. In total, the Department now provides more than 70 separate schemes supporting over 2 million of our citizens. There is no one in the State who at some time or other will not be a recipient of the Department's services. The inherent linkage between the welfare system and the labour market is also reflected in the scope of the Department being widened, as in other countries, to encompass the provision of employment services and the development of employment legislation.
In addition, the real value of welfare payments has also increased dramatically over the years. It may interest members to note that in the late 1940s, unemployed male workers could receive 22s 6d per week, while the weekly rate of pension was 17s 6d. If these are adjusted for inflation, the equivalent rate of payment for unemployed males today would be about €40 and for pensioners about €33. Today's payment rates far exceed these values at €198 and €238, respectively, and the Irish welfare system, when called upon during the recession years, performed much better in reducing poverty and inequality than welfare systems in other countries. Arguably, although this will be a question for future generations of economists, the welfare system played the key role in not just stabilising the economy but in positioning it to recover more quickly than might otherwise have been expected.
Whatever about the macroeconomic impact of our welfare system, staff of the Department are acutely aware, through their everyday work, of the impact of welfare at the micro level – the level of individual citizen and families. They know that the services we provide enable our clients to sustain some level of dignity, often during very difficult periods in their lives. Therefore, while our staff are conscious that they are distributing funds provided by taxpayers and social insurance contributors and that they have a duty to protect these funds from fraud and error, they are equally, if not more, mindful of the vulnerability of the people who rely on our services. They strive, therefore, to deliver these services in a manner that removes any sense of stigma that may have been formerly associated with seeking welfare payments. No one should be embarrassed to enter any of our offices nor should they fear what they may find there or be concerned that they will be treated with undue suspicion. We work to treat every person with dignity and respect and to make our offices bright and welcoming. I am pleased to say that research into customer experience of our services indicates that while there will always be individual examples of failure, customers overall are highly satisfied with the service they receive – scoring our service at an average of over four on a scale of zero to five.
I mention all of this because in designing and managing large-scale service processes, a balance has to be struck between building a service that is reliable, efficient and effective for the overwhelming majority of our customers who are open and honest in their dealings with the Department and imposing controls and checks that are intended to reduce fraud and error when the evidence is that levels of fraud and error are relatively low. We cannot and will not pursue the elimination of error or fraud at the cost of denying entitlement to service or frustrating access to that entitlement. It is this balance that is at the heart of the three chapters selected for discussion today.
The first chapter, Chapter 16, summarises the results of 13 fraud and error surveys conducted by the Department over the past five years or so, covering approximately 70% of the Department's expenditure. These surveys are used to help identify the risk factors that give rise to fraud and error and to inform changes that help reduce the level of fraud and error into the future. The surveys also provide an indicative estimate of the level of fraud and error in the system. In general, for most schemes surveyed this ranges between 0.5% and 5%, with farm assist being a notable outlier at 10.4%. Across all 13 schemes, the net level of fraud and error averaged about 2%, a level that the Comptroller and Auditor General assesses to be material. However, I would draw attention to the fact that this rate stands comparison with equivalent rates in social welfare administrations in other states, for example, 1.9% in the United Kingdom, 5% in Israel and 3.5% in Canada, and indeed, to rates of bad debt, which are typically 2% to 5%, and shrinkage, typically 2%, in commercial industry.
The second chapter, Chapter 17, reports on the findings of an audit of overpayments conducted by the Comptroller and Auditor General and makes six recommendations as to how the Department can improve its performance. As Accounting Officer, I accept all six recommendations and have already initiated steps to give effect to them, including the assignment of additional staff to control activity in the pensions area and to the central debt recovery unit. Additional staff have also been assigned to our accounts division to implement a process of monthly reconciliations between our general ledger and debt recovery systems. Finally, a review of outstanding debt has been completed and I will shortly submit a proposal to the Department of Public Expenditure and Reform with respect to the prioritisation of our debt recovery activity, including a proposal for a structured write-off or write-down of a stock of very aged debt.
The third chapter, Chapter 18, examines the Department's performance in implementing control reviews. The Department undertakes approximately 950,000 reviews of claims each year to determine if the claim is still valid and if the payment amount is correct.
The Comptroller and Auditor General makes three recommendations as to how these reviews can be improved including increasing the number of medical reviews, ensuring that a review status is assigned to all medical claims, and taking steps to reduce the risk associated with automatic claim renewal.
As Accounting Officer, I agree with these recommendations and have taken steps to implement them. I have authorised the recruitment of additional medical assessors and the profiling of medical claims that do not have a review status has commenced. Automatic renewal of family income supplement claims was discontinued prior to the publication of the Comptroller and Auditor General’s report.
As regards appeals, as members are aware, all decisions taken by the Department’s deciding officers and designated persons are appealable to the chief appeals officer. In any year, approximately 85% of claims are awarded and just 1% of decisions are appealed, of which approximately 60% have a favourable outcome. In other words, 0.6% of all claim decisions are revised when appealed. It should also be noted that in 40% of claims that are revised, the decision is made prior to a formal appeal assessment, typically because additional information submitted by the appellant at the appeal stage is provided to the deciding officer who, taking that information into account, revises his or her original decision. The trend of additional information being provided at appeal stage is particularly prevalent in medical schemes.
I am aware that some members have concerns that the timeframe to finalise an appeal is inordinately long. However, it must be noted that the appeals process is a quasi-judicial process. Appeals officers are required to decide all appeals on a de novo basis having provided both the appellant and the Department with an opportunity to make submissions. Appeals decisions are subject to review by the higher courts and must be formally written to quasi-judicial standards, which is time-consuming. In order to mitigate time delays, appellants generally have access to welfare payments throughout the appeals process and any decisions made in their favour are backdated to the original claim date to ensure the claimant is not disadvantaged in monetary terms.
I wish to conclude by referring back to the challenge of achieving a balance between control and service in a large-scale operations environment. To give members a sense of scale, it is worthwhile noting that while we sit here this morning the 6,500 staff of the Department will host 430 one-to-one activation meetings with jobseekers, process 26,000 applications for welfare payments, make 118,000 payments to a value of some €28 million, answer 10,000 phone calls, finalise 1,600 control reviews, complete 1,200 standard authentication framework environment, SAFE, registrations and register 45 marriages, including two same-sex marriages. In addition, departmental staff will be working to progress three significant legislative items involving pension entitlements, employment rights and welfare payments.
Given the scale and scope of the Department’s operations, it is inevitable that there will be individual lapses by members of staff, that complex business processes will fail from time to time, that some processes will not keep pace with the level of change and, regrettably, that a very small minority of people will manage to defraud the system. I say that not in an attempt to diminish the issue of fraud and error but to highlight that the issue must be considered in the round. I believe and hope the members of the committee will agree that, when taken in the round, the staff of the Department do an extraordinarily good job of delivering a very broad and complex set of services in a manner that achieves an appropriate balance between the necessity to minimise loss to fraud and error while delivering on the even greater necessity to deliver an effective and responsive service to their clients. My colleagues and I will be pleased to take any questions members may have.
Seán Fleming (Laois, Fianna Fail)
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I thank Mr. McKeon for his opening statement. We will address various items mentioned in it during the meeting. It is very interesting to get a picture of what is happening in the Department and people will be interested to hear that during the hours that Mr. McKeon is before the committee, there will be 430 meetings with jobseekers, 26,000 applications will be processed, 118,000 payments to the value of €28 million will be made, 10,000 phone calls will be answered by the Department, 1,600 control reviews will be finalised, the SAFE registration of 1,200 people will be completed and 45 marriages will be registered. It is a very busy Department. Although the committee deals with macro-economic issues, that provides a micro-economic view of the work of the Department. Committee members will deal with such issues in our offices tomorrow morning.
Deputy Cassells is the first speaker and will have 20 minutes. Deputy Deering will be the second speaker and will have 15 minutes. Other Deputies have indicated in the following sequence: Deputies MacSharry, Cullinane, Catherine Murphy and Connolly.
Shane Cassells (Meath West, Fianna Fail)
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I offer a warm welcome to Mr. McKeon and all his team for this engagement. I note his opening remarks and the language he used in respect of a shift of attitude. I wonder whether the Taoiseach, when he was Minister for Social Protection, read the part of the mission statement that refers to a shift in terms of people seeing social protection as moving from destitution to an essential component of modern society when he embarked on the infamous Dublin Bus advertising campaign that targeted the most vulnerable in society. Mr. McKeon stated, as has the Taoiseach, how the Department affects so many lives and that no one will go untouched by interaction with the Department from birth to work to old age and death. Given the reach of the Department and the very significant spend and Vote appropriated to it, it is of great interest to the Committee of Public Accounts, no doubt heightened by public attention on campaigns encouraging people to report welfare fraud.
My examination of the figures will not focus on claimants but rather the Department's management of its very significant Vote and the effective control of approximately €8 billion. By its nature, the system is particularly vulnerable to abuse but the levels are of concern, as pointed out in the report.
I will start with the Office of the Comptroller and Auditor General although Mr. McCarthy is not present this morning. One could not accuse him of being a man who would be for fronting poster campaigns. Mr. Harkness in his opening statement clearly set out that the office has cause for concern in regard to the regularity of social welfare payments. I ask him to succinctly explain in layman's terms how the Office of the Comptroller and Auditor General came to that conclusion.
Mr. Andy Harkness:
The Department conducts fraud and error surveys which indicate an excess of payment in excess of entitlement. Where that occurs to a material or significant level, we apply a threshold of approximately 1% of expenditure, which is the same for all audits we conduct. If that is exceeded, there is an expectation that we would draw attention to that in our report.
Shane Cassells (Meath West, Fianna Fail)
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Does Mr. Harkness believe there is a significant amount of fraudulent behaviour in the system or is it more a case of lack of control by the Department in terms of medical control reviews leading to payments that should not happen?
Shane Cassells (Meath West, Fianna Fail)
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Mr. McKeon is very welcome. As regards the fraud and error survey, both gross and net figures have been set out and the gross terms shows excess payment of potentially €460 million or nearly half a billion euro. In his concluding remarks he mentioned that a small number of people defraud the system. However, in the context of the spend, that is a significant amount of money considering the strain many Departments are under, in particular his own, and that people are trying to access payments that would make their lives easier to live. I ask him to set out the reasons for the variations across the schemes mentioned this morning.
Shane Cassells (Meath West, Fianna Fail)
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I appreciate that but it is an underlying figure and can be taken as a starting point.
Mr. John McKeon:
We must be very careful in attributing and extrapolating even the net figure to be representative. The surveys are carried out at a particular point in time.
If one were to calculate a 95% confidence interval, which we have started doing in our fraud and error reports, as the Comptroller and Auditor General knows, the rate of fraud and error for invalidity pension, for example - Deputy Cassells also mentioned other schemes - would be somewhere between 0% and 3%. The average at that 95% is 1.5%. However, when one has that range, one cannot extrapolate that it is, even at the net level, that high, so I would be cautious about quoting large figures as being the real cost. When it comes down to it, if we were to review every single claim all of the time, my belief is we would be closer to the lower boundary of that 95% level, closer to 0% than to 3%, so we must be careful about that.
Having said that, Deputy Cassells asked a question about the variability in the fraud and error between the various schemes. There are two main things that contribute to the variability. One is whether the scheme is an assistance-based scheme or a contributions-based scheme. In assistance-based schemes the payments are contingent on and subject to the income a person might have, so there is an extra variable, whereas contributions-based schemes are based on the historical level of contributions. One can establish the historical level of contributions at the point of play very precisely. Therefore, the person qualifies and it is very unlikely that there will subsequently be a change in their entitlement. After having submitted a means assessment, a person's income may change during the course of his or her claim. If that income change is not notified to us, it will result in either a fraud or an error. In most cases we attribute this to error because there is no definitive evidence that the claimant deliberately withheld the information. The standard in section 302 of the Social Welfare Consolidation Act is very high in this regard. In order to attribute something to fraud, it has to be wilful, deliberate and knowingly withheld information, so it is in fact almost beyond a reasonable doubt. Therefore, in most cases we attribute it to customer negligence or customer error, and they are the main distinctions.
Deputy Cassells raised a question about the medical reviews. As outlined by the Comptroller and Auditor General, we have not conducted all the reviews at a time that the medical assessor, when he or she assesses a claim in the case, might be relevant. It is important to note two things in this regard. First, the indication that is given by a medical assessor at a point in time when a medical claim is submitted is one of the indicators that we take in order to review and select a claim for review. There are other indicators relating to the age of the person, the duration of the claim and the prior claim history, so there are a number of triggers which inform our decision to take a claim for review. One of them is the medical assessor's review. The fact that a medical assessor says he or she thinks a certain claim should be reviewed in one year, two years or three years does not necessarily mean that that claim will be prioritised for review above another claim, which might have another trigger, such as the age of the individual or his or her prior claim-----
Shane Cassells (Meath West, Fianna Fail)
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On that, does Mr. McKeon accept what the Comptroller and Auditor General says? It was very pointed. He stated:
The examination noted that medical control reviews of medically based claims are not being carried out as planned. When a claim is approved for payment, a medical review status should be assigned to it, indicating whether and when the claim should be reviewed in the future.
Mr. John McKeon:
I understand why it is done but it is probably taking it a step too far to say that the fact that a medical assessor believes a medical review should be done in, say, two years means that there is a plan to do it in two years. The plan is to select claims for review based on a number of risk factors, one of which is the medical assessor's review. It is not the determining factor. It is a very important determining factor but it is not the only one. Furthermore, regarding the medical reviews, we have come through a period in the Department when the rate of new claims for medical schemes has increased very dramatically year on year. This can be seen in our expenditure results. As I said in my opening statement, when we have a choice to make between allocating resources to control activity and serving the customer in trying to get his or her claim into payment as early as possible, we generally put the resources into serving the customer. This meant that we did not have all the resources that we could deploy to do reviews. Medical schemes are among the least risky when one looks at the figures, so I think this is the right thing to do.
Shane Cassells (Meath West, Fianna Fail)
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I am just pursuing this because Mr. McKeon has said that most of the overpayments are attributable to claimant errors rather than fraud.
Shane Cassells (Meath West, Fianna Fail)
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Then it is a matter of trying to extrapolate, first, what this is based on and, second, if there are no proper reviews in place, how the Department can make a determination that there is fraudulent behaviour. The Department is giving the benefit of the doubt to the applicant that there is not extensive fraudulent behaviour. I am just saying, regarding making sure there is-----
Shane Cassells (Meath West, Fianna Fail)
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Why would the Department embark on the campaign that the Taoiseach led if Mr. McKeon, as Secretary General of the Department, says there is not extensive fraud? He cannot blame this on the red top media, which, by the way, is not a correct term, and say the tabloid media is driving it if the very Minister heading up the Department embarked on a campaign as well.
Mr. John McKeon:
I will come back to that point, but on the specific issue of what the Deputy said about whether we give customers the benefit of the doubt, we operate within the law. The law is very clear that we must be absolutely certain before we pursue a case for fraud that the customer deliberately, knowingly and wilfully withheld the information. It is important also to understand from a customer perspective that the schemes are very complex. Many of our schemes have complex rules and conditions and many customers genuinely would not be aware, if their means change, what the extent of the change needs to be before they need to tell us. In the Department we have a job to do in informing and communicating to customers that if their means change they need to tell us.
I noted in my opening statement that there was a particularly high level of fraud and error in respect of farm assist. We are looking at a small number of farmers; I think 6,000 to 7,000 farmers, there or thereabouts, claim farm assist. They are small farmers. Their income is very variable. Because it is their net income, it depends on input prices and output prices. Their income varies a lot over the year. It is understandable that in that situation a farmer facing such variability in income would have difficulties in figuring out whether this means he or she needs to have a change in his or her payment or not, particularly during the years in question where there were significant changes to the single farm payment and where the Department's means rules were changed. Instead of 70% of farm income being assessable, it was changed during the period of this review to 100%. Unless farmers are reading the newspapers and watching the Dáil debates very carefully, they will not necessarily have copped that it is not 70% any more but 100%. These are the factors that have to be taken account and which we have to understand.
Shane Cassells (Meath West, Fianna Fail)
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Can Mr. McKeon explain the variation in the overpayments in respect of disability allowance?
Shane Cassells (Meath West, Fianna Fail)
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Yes.
Shane Cassells (Meath West, Fianna Fail)
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Yes.
Mr. John McKeon:
Of that growth, 15.3% of those claims were found to be ineligible on first review. When we did a fraud and error survey, all of those clients appealed to the appeals office that determination, and 15.3% succeeded at appeal. That is the figure before an appeal is taken into account, so that actually brought the net level down very significantly. I think the criteria for disability allowance is that a person must be substantially restricted in their ability to perform work which is suitable to their employment experience and education. That is a subjective assessment. We have very good medical assessors who are trained in occupational medicine. They reach a determination based on the evidence presented to them and the client is found to be ineligible. Often - and I referred to this in my opening statement - what then happens is that the client goes away to his or her consultant or doctor and gets additional evidence. If our medical assessor did not have that at the first review, it is reasonable then that when additional information becomes available, it would be reviewed either by the medical assessor or the appeals office and the decision should be reversed. That is a difficulty. We are working with various stakeholder groups in the illness and disability space to try to encourage them to get their clients to submit as much medical information at first claim. I do not want to give details on this, but, anecdotally, one or two of the stakeholder groups have made us aware that they almost advise their clients to hold back some information and keep it for the appeal. This just creates a situation whereby we are saying no at first appeal, and we need to fix that. That is fundamentally what is at issue.
Shane Cassells (Meath West, Fianna Fail)
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Will the Secretary General account for the variations on the gross figures for the State pensions, non-contributory, at a cost of €19 million, and State pension, contributory, at a cost of €93 million? If there are issues pertaining to people claiming pensions, and I acknowledge the Comptroller and Auditor General referred in his report to the people who have been jailed for fraudulent behaviour but if there are extensive examples of people who are claiming for the deceased, does the Department have a system for checking the death notices? I know every morning I check the status of my electorate on RIP.ieto see how they are. I wonder does the office of the Secretary General do the same. I do not think we have a case that those who have gone to their eternal reward are claiming an additional reward for the tuck shop in heaven. The report details the cases of prosecution. How extensive is the number who have been prosecuted and have gone to jail?
Mr. John McKeon:
We match the general registration office; I referred to the registration of marriages. We match the deaths register as well. We match and take note and automatically stop payment at the appropriate time when a death is registered. Most of the difficulty on the non-contributory pension scheme relates to two categories - means and when means change, and savings are part of the means. The savings ratio among pensions is very high. As they accumulate savings, according to the law they lose entitlement to some payments because their savings are assessed. Many pensioners neglect to tell us that. Many pensioners have earnings that they do not tell us about. In fact what happens is not so much that people are claiming for deceased members of the family, it is that when a person dies and we get details of their estate we find that while they were alive they had savings or means that they had not disclosed and it is a recovery from the estate of the deceased rather than a recovery from a person who is claiming. There are cases of impersonation on pensions and they tend to be slightly higher but that is generally in respect of people who are not living in the country. A family member claiming in respect of a person who has emigrated could be claiming in their name with their PPSN. There have been a number of notable examples that we have prosecuted through the courts. Regrettably many of our higher value cases are older people who are defrauding the pension system. I would be very careful about extrapolating from the figures. In my opening statement I stated that this was a very low number. We should not take a cause célèbreor an exception and assume they are the rule. In fact the exceptions prove the rule that most people are honest and open. We have to be careful not to tar everybody on the welfare system with the sins of a few.
Shane Cassells (Meath West, Fianna Fail)
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Mr. McKeon is reiterating as the Secretary General for the Department of Employment Affairs and Social Protection that there is not an extensive level of fraudulent level in the country.
Mr. John McKeon:
There are three chapters in the report and the figure for overpayments last year was €110 million. About 35% of that figure was fraud, about 54% was claimant error and about 13% was estate cases of the deceased, which I have been speaking about and about 2% or thereabouts is departmental error. The amount of money involved is still very significant so it is appropriate the Department take steps to try to manage it and minimise it. In my opening statement I said that I do not want to minimise the impact of fraud and error, and I do not want to suggest that it is something that we should not be on top of and working to further reduce. I do not think we should sensationalise it either.
Shane Cassells (Meath West, Fianna Fail)
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In fairness, it was the Department for Employment Affairs and Social Protection that effectively sensationalised it by the engagement process. Mr. McKeon is saying one thing on one hand and one on another.
Mr. John McKeon:
The Deputy may be talking about the campaign earlier on this year. The Department runs communication campaigns regularly. This year already we have done ten campaigns. We have done a campaign on invalidity pensions, treatment benefit, back to school clothing and footwear allowance, maternity, paternity, all of which would have been as extensive as the campaign on fraud. The only campaign that got a lot of attention was the fraud campaign. It goes back to the point I was making, taking something that the Department is correct in doing, but which can trigger a headline that sensationalises it. When one thinks about a communication campaign on the issue of fraud and control, there are three objectives and three audiences that one is targeting. The first objective is to notify and inform and that gets to the point of people being aware that when their circumstances change and their means increases or their savings increase, they should inform the Department. If one looks at the text of the campaigns, and most of the communication, that was the main point. The second audience is people who might be thinking of defrauding the system and the objective is to deter them. We are saying to people that the Department is on top of the fraud issue, that if people try to defraud the system we will catch them and there will be consequences. That is a good and wholesome thing to do. The third element to the campaign is to assure the public. A large part of our audience - and this is sometimes forgotten when we talk about welfare and I referred in my opening statement about staff being aware of their responsibility to contributors and taxpayers - are the people who fund the system and we need to give them an assurance that the Department is not ignoring fraud or that we are not soft on fraud. The three objectives of the Department's communications strategy are to inform, to deter and to assure the public. I take on board the Deputy's concerns
Shane Cassells (Meath West, Fianna Fail)
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There was a fourth element that was discussed in this committee, which is that it potentially leads to the stigmatisation of those in receipt of payments as well in terms of reinforcing a position in society. Mr. McKeon said in his opening statement the Department was trying to move from the stigmatisation of destitution to an essential component of welfare but in fact it had the converse effect of reinforcing that stigmatisation.
Mr. John McKeon:
We have taken feedback on that campaign and we have taken feedback on the particular messaging and certainly when we run similar campaigns in the future we will take that feedback on that type of messaging into account. That is not what it was intended to do, as I said it was intended to inform, deter and to assure people. In the Department we are very sensitive for the reasons I have already outlined in creating too much sensationalism about it. Nevertheless communications campaigns like this are run in all welfare administrations all over the world and they are important in that they create awareness. In the knowledge that they are short campaigns that create an awareness which has a residual and long-term impact. We know that the reported instances of fraud increased by more than 30% in the aftermath of the campaign. We know that the control savings we have got out of that amount to about €4 million. We know that at least €1 million of that increase in control savings is attributable to the increase in the number of reports. It was a short campaign, it did not cost a lot of money, it raised awareness.
Shane Cassells (Meath West, Fianna Fail)
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What was the total cost of it?
Mr. John McKeon:
The total cost was about €163,000. A spend of €163,000 on a communications campaign is actually very low by comparison with the communication campaigns of other Departments or other commercial organisations. It was a short and small campaign. It was very cost effective and it stimulated a saving which we can directly attribute of €1 million. It is not to be sniffed at.
I think everybody would take the point about the messaging and that is something we will review in the future.
Shane Cassells (Meath West, Fianna Fail)
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On the recovery of overpayments, and write offs, a total of almost €3 million was written off in 2016, which is a substantial sum. Will Mr. McKeon deal with the analysis by the Comptroller and Auditor General in terms of the processes for recovering overpayments? There were a number of significant amounts that have not been recovered. I note that Mr. McKeon says many were in the realm of the smaller amounts but there were a significant number, 162 cases where €150,000 was written off because the Department failed to act in a reasonable time. Why was the Department not acting in a reasonable time?
Shane Cassells (Meath West, Fianna Fail)
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In 162 cases, there were €149,000
Shane Cassells (Meath West, Fianna Fail)
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I regret that I do not have the page reference in front of me. Could Mr. McKeon touch on that point in terms of the amount of money that was written off in 2016 of nearly €3 million.
Mr. John McKeon:
In terms of the write-off in each of the last two years, 2015 and 2016, it was a relatively low amount that was written off compared to previous years.
We can see the trend with the figure of €17.5 million on page 231 of the Comptroller and Auditor General's report. Therefore, the amounts being written off have reduced. I mentioned in my opening statement that I currently have a proposal on my desk which I am examining. We had to get permission for write-offs from the Department of Public Expenditure and Reform and I will be bringing forward a proposal to increase the number of write-offs.
On the specific point regarding delays, if we are going to chase a client for repayment, we have to be clear that it will stand up in court. We have to be clear that it would stand up if the client appealed to the Ombudsman. It can arise that a client would walk into one of our Intreo centres and tell a member of staff that his or her means have changed, but the claim might refer to disability allowance which is dealt with in Longford. There can be delays in getting that information from an office in the country to Longford. Those delays should not happen. I acknowledge that they are process failure but, given the scale of our operations, they do happen. In those kinds of situations, even if there is an overpayment, it would be wrong of us to go after the client. I do not think the Ombudsman or the courts would support us if we did. We would be saying that we were told in week 10 about a change in means but that it took us until week 20 to do anything about it. Ergo, we cannot do anything about week 10 to week 20 because we knew it for ten weeks without doing anything. It is in those situations that we would write off the debt.
The other issue concerns estate cases. Most of the write-offs in the year related to estate cases. Even though there was a write-off against the estate, in reality the estate did not have the funds to repay the amount.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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I welcome Mr. McKeon and his team. I would like to focus on the appeals process. I was very taken by his answer to my colleague that a number of clients will hold back information for the appeal. That statement sounds very unusual. I would be of the opinion that someone who is applying for a particular scheme - whether a disability or an invalidity scheme - would want to get it over the line as quickly as possible rather than hold back information that would be beneficial to his or her application and it taking at least six months to complete the process. That does not make sense.
Mr. John McKeon:
It does not make sense to me either but I can speculate as to why it might be the case. However, there is a trend and I can speculate as to two potential reasons. First, if I look for a payment for disability allowance and the payment is denied, I will have access to a supplementary welfare allowance during the appeals process. I will, therefore, have a payment throughout the appeals process. Therefore, there is no loss to me.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Yes, but generally speaking the supplementary welfare payment can be smaller than the payment sought.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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It can be more in some cases.
Mr. John McKeon:
It is a relatively small difference. Therefore, the delay due to the appeal does not impact on me. That is the first point in that the negative reason I might not go down that route is taken away in view of the fact that I will have money in my hands in any event. In terms of why someone might think it worthwhile, this goes back to a point raised by the Comptroller and Auditor General. It is pure speculation, however, and we have not carried out research into it. We were reviewing domiciliary care allowance cases up to 2011 to 2012 and we stopped doing the reviews at that stage because, on review, approximately 40% of clients were found to be ineligible. Subsequently, they would appeal and it somehow got into the ether that an appeal decision is better than a first decision. I think that people in some areas are focusing on the appeal as the real decision point. This does not make sense and we are doing our best with stakeholder groups to get out the message that if they give us the same information at the first play as they do at appeal they will get the same decision. There might be a misconception that an appeal decision is a better than the first decision. It is not. It is a different decision with different information.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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My experience, and I am sure that of many of my colleagues who would deal with similar cases, would be totally different to what Mr. McKeon is outlining. The appeal process has become an industry within the Department in recent times. Correct me if I am wrong but, in the event that an application for a scheme is refused, there is a potential review within a shorter period. Is that correct?
Mr. John McKeon:
I might ask the chief appeals officer to comment in a moment but, in the first instance, when an appeal comes in, the appeals office will examine the information that has come in and send it back to the deciding officer asking, on the basis of the information that has now been submitted, if he or she upholds the original decision. We call that a review. The deciding officer examines the additional information and decides whether it changes the decision. The deciding officer will apply the rules set down in legislation when doing that. In many cases it will lead to a different decision. Approximately 40% of cases that are appealed result in a different decision.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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What percentage of-----
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Do the witnesses have a breakdown of the percentages as they relate to appeals of different schemes? Is there a trend in terms of applications for disability allowance, invalidity pension, carer's allowance, etc.?
Ms Joan Gordon:
Overall, a small number of schemes account for the majority of the appeals. The disability allowance scheme has the highest rate, with approximately 26% of all appeals relating to it. The next highest is carer's allowance. As the Secretary General just mentioned, the domiciliary care allowance rate is quite low. I think it is approximately 5% of our total receipts. In terms of the review process, the legislation requires that we ask the deciding officer for a submission on any appeal made. Sometimes additional medical evidence is available even at that point which allows the deciding officer to review and revise the decision.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Is there a timescale within which the review is be completed?
Ms Joan Gordon:
The legislation does not provide for one but we work closely with the Department. We have turnaround times. It is roughly half and half. In the current processing times of 26 weeks, as mentioned, approximately half is attributable to the file being back in the Department and half being attributed to the appeals office.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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What is the cost of the review and the whole appeals process? As I said, in my opinion it is an industry. If that percentage of applications goes to appeal, the amount of time, energy and finances involved must be extraordinary.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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If the process was more streamlined and applicants did not have to, as the witness said, hold back information and the information was requested in a more detailed way at the outset, it would eliminate a huge percentage of potential appeals.
Mr. John McKeon:
Absolutely. We are working with stakeholder groups such as the National Disability Authority to improve the quality of our application forms and communications so that we do not end up having to request that additional medical information is provided. If the Deputy has a concern about particular cases, he should contact the Department or me at any stage. We will examine them. We try to provide the best possible information to clients and encourage them and support them through the claims system. As mentioned by Ms Gordon, one of the reasons the number of domiciliary care allowance appeals has fallen so significantly is that together with stakeholder groups we have reviewed the application forms. We have made them easier for people to use and they not account for fewer appeals. We want to do the same with carer's allowance. That will happen from January. We did that in association with Family Carers Ireland, which is a stakeholder group. We are doing those things and working with stakeholder groups to try to ensure that the application process works first time . The majority of appeals arise because we did not get the necessary information and not because the client did not deserve the payment. We are trying to deal with that issue.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Approximately how much is spent every year in the Department on the appeals process?
Ms Joan Gordon:
During 2016, for the full year, the total cost of running the appeals services amounted to €4.2 million.
That figure includes salaries, employer PRSI, travel and subsistence, room hire, publications, stationery, postage, and website maintenance.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Ms Gordon referred to room hire. I assume that is for the purpose of oral hearings?
Pat Deering (Carlow-Kilkenny, Fine Gael)
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How does an appellant get to be among the chosen few who qualify for an oral hearing?
Ms Joan Gordon:
The regulations favour a summary decision in that they stipulate that an appeals officer may decide an appeal on a summary basis unless he or she considers an oral hearing to be necessary. I have a preference for summary hearings because they are more efficient, but when a person asks for an oral hearing, he or she will usually get it. Sometimes, for example, people who have received a summary decision will come back and request an oral hearing because they have more evidence. In such cases, the request is inevitably allowed. The only circumstances in which I would not support the granting of an oral hearing is where there is nothing to be gained from having it. The legislation refers to legal provisions, qualifying contributions, means testing and so on. Sometimes there is nothing to be gained from an oral hearing because there is no possibility of further evidence being adduced. On the other hand, in the case of the medical-based schemes, for instance, as we have discussed, an appellant may well have additional evidence or may want to bring evidence verbally to an oral hearing.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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What percentage of appeals are decided by way of oral hearing?
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Where a person submits an application for domiciliary care allowance, disability benefit or another of the medical schemes, who carries out the medical assessment to determine whether the applicant is eligible?
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Are they doctors?
Mr. John McKeon:
Yes. They review the information provided and apply their skills and knowledge to determine whether an applicant meets the eligibility criteria. It is important to note that our medical assessors do not dispute a diagnosis of a particular illness or ailment. Rather, they assess, as they are trained and qualified to do, the impact of that diagnosis on the person's ability to work. As I said in my opening statement, we are about to recruit additional medical assessors to enable us to complete additional medical reviews. That is being done in accordance with a request by the Comptroller and Auditor General.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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How long does a medical assessment usually take?
Pat Deering (Carlow-Kilkenny, Fine Gael)
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The Secretary General mentioned that the Department is looking to streamline the application process. My experience is that it is often a very stressful process for applicants. Mr. McKeon indicated that the Department is engaging with the various stakeholders. Is there a timeline for completing that process?
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Mr. McKeon concluded his opening statement by summing up the very good work done by the Department. He mentioned that during the course of this meeting, staff will conduct 430 one-to-one activation meetings with jobseekers. I assume that the purpose of those meetings is to assist people with moving into employment?
Mr. John McKeon:
Yes. Our experienced employment services staff sit down with jobseekers and advise them on the various scheme and services available to them, including training programmes, community employment schemes, jobs club and so on. In addition, they work with jobseekers to review CVs and job applications and support and advise them in developing a personal progression plan, which sets out the steps a jobseeker might need to take to move from unemployment into work.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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What is the difference between that process and the support provided under the JobPath scheme?
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Why are two processes needed to do the same thing?
Mr. John McKeon:
JobPath providers do things slightly differently from how we do them. At its core, however, it is essentially the same process and JobPath is an extra resource capacity for the Department. It should be borne in mind that when the scheme was introduced, there were 455,000 people on the live register. Between the Department and local employment services, we had some 600 case workers working to assist people. In many areas, the ratio of unemployed jobseekers to case workers was 2,000:1, compared with an international norm of 200:1 or fewer. JobPath was a way of brining in additional resource capacity and, as a result, we are now at a ratio of approximately 200:1 across our Intreo service, the contracted local employment services and JobPath. The fundamental role of all those services is to provide a personal advisory service to jobseekers.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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How much money was spent on JobPath in the past year?
Pat Deering (Carlow-Kilkenny, Fine Gael)
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What is the breakdown in funding between the two contracting companies, Turas Nua and Seetec Ireland?
Mr. John McKeon:
The contracts were awarded on the basis of an open procurement and tendering process. Each provider is covering approximately one half of the country but, for reasons of commercial confidentiality, I do not wish to get into a breakdown of funding. I do not want to help either provider to figure out what the other is charging.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Does the Secretary General know how many employment placements the two providers have facilitated?
Mr. John McKeon:
I do not have the exact figure with me but we do produce performance reports and publish them on our website. An important factor for us is that payments are made on the basis of outcomes. In other words, when a provider succeeds in getting a jobseeker into sustained employment, we will give a quarterly payment for up to a year. The performance data indicate that when a person who participates in JobPath is compared like for like with a person who is not on the scheme, the former has a 34% improved possibility of being in employment on a sustained basis.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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These are supposed to be job activation measures, but the information I have suggests they are, in fact, job-blocking measures. I read an interesting article in recent days which outlined how JobPath is preventing people from getting jobs. That is something which resonates throughout the country.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Once somebody goes into the process of JobPath, whether under Turas Nua or Seetec Ireland, he or she is prevented from accessing other services. For example, the article to which I referred mentions a person who was deemed ineligible to do a Safe Pass course because he was in JobPath. We also have cases where older JobPath participants, of 60 years old or thereabouts, cannot avail of a community employment scheme which might continue for three or four years . The only way they can get out of the scheme is, as Deputy Cassells mentioned, if they are on RIP.ie.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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It is a fact.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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It is one of many cases.
Mr. John McKeon:
I am referring to the Safe Pass case in particular.
The provider should provide the funding for the Safe Pass course to the jobseeker. If it does not, I want to know so that we can deal with it.
There is something important to understand about the CE case. Approximately 180,000 people are either long-term unemployed, in a CE scheme or on a training programme for the long-term unemployed. At any point in time, some 60,000 people are on JobPath and some 20,000 are in a CE scheme. Doing the sums, there are roughly 40,000 long-term unemployed people who are not on JobPath, in a CE scheme or on a training programme. They are not getting a service.
We must prioritise and allocate our resources. People who are on JobPath do not have access to a CE scheme because they would effectively be taking up two places. We are trying to ration our resources and ensure that, rather than someone who is on JobPath being in a CE scheme as well, thereby denying one of the-----
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Would the Department not be better off-----
Pat Deering (Carlow-Kilkenny, Fine Gael)
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These people want to work. They do not want to have to go into an office-----
Pat Deering (Carlow-Kilkenny, Fine Gael)
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-----and be interrogated. To cite the article again, "intensive" meant that she had to go to three sessions over six weeks. People were asked the sorts of question a probation officer would ask about addiction, deaths and family dynamics. These people want to go to work.
Mr. John McKeon:
Certainly, and they would be asked similar questions if they were in our service or a local employment service. When a case worker is providing a service to a client, it is important that the case worker understands the personal circumstances of that client. If the client has addiction issues, the case worker will refer him or her to the relevant addiction services. These are perfectly reasonable and relevant questions and I would defend the right of someone to ask them. They are confidential.
In my experience, everyone who is unemployed would like to work if given the right opportunity and support. Some people have been unemployed for a long time, and they are the ones we are discussing. In many cases, they have been unemployed for a very long time. People in that situation lose their confidence and faith in their ability to get a job. Sometimes, they settle for things for which they should not settle. The purpose of the activation process is to try to give them the support to get out of that, move on and start being confident about going for employment. The-----
Pat Deering (Carlow-Kilkenny, Fine Gael)
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Being locked into JobPath for 12 months is a major disincentive.
Mr. John McKeon:
We have to be frank about some of this conversation. What I would say to those people is that community employment has always been an option for them. We have approximately 1,400 vacancies in CE schemes. When referred to JobPath, a small number of people suddenly discover an interest in community employment that they did not have before.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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That is a bit unfair, with the greatest respect.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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For individuals in the latter stages of their working careers at 60 years of age, for example, community employment may be their only option.
Mr. John McKeon:
I would have to ask that individual why he or she had not sought to be on a CE scheme the previous year. I am being serious. There is an issue to be discussed. Of the approximately 100,000 long-term unemployed people, 60,000 are on JobPath. This means that there are 40,000 people who are not on JobPath or in CE schemes. The purpose of community employment is to provide a service to long-term unemployed people that will give them occupational activity and help to prepare them to return to the paid workforce. Community employment is a State employment scheme. It is not a job. Its purpose is to help people who are long-term unemployed to take their first steps back into employment. I have 40,000 people whom I would like to see move on to other things. If I take a person off JobPath and put him or her into a CE scheme, someone among the 40,000 is not getting access to that scheme. CE providers need to understand that their job is to help the long-term unemployed and that people other than those who are on JobPath are available to them. They should be working with those people.
Pat Deering (Carlow-Kilkenny, Fine Gael)
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I take Mr. McKeon's point about CE schemes being State employment, but would we not be better off with people in CE schemes working in the community and providing a valuable service instead of going into an office to be interrogated in a probation officer-type inquiry? Given that they must go through a 12-month process at some cost, would that money not be better spent in the community?
Mr. John McKeon:
That is not the evidence. We have more people in community employment than we had in 2012 before JobPath started. Analyses of the employment impacts of various programmes have been undertaken. The figures are the same across the world. The most effective employment intervention to help someone back into work is the one-to-one case management activation service. The least effective is a State employment scheme like community employment. The ESRI has published evidence that reflects this. The most effective euro for euro expenditure is on case management activation. In terms of permanent employment outcomes, the least effective are State employment schemes. This is not to say that there is no place for our State employment schemes. They are in the hierarchy, but one cannot say that community employment is a better place for someone to be. The experience will vary by individual-----
Pat Deering (Carlow-Kilkenny, Fine Gael)
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I am comparing it with the JobPath process.
Seán Fleming (Laois, Fianna Fail)
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To clarify, what is the transition rate from community employment to employment?
Seán Fleming (Laois, Fianna Fail)
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A ballpark figure.
Seán Fleming (Laois, Fianna Fail)
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Before I call Deputy MacSharry, Mr. McKeon stated that people in JobPath companies had a chance of approximately 34%-----
Seán Fleming (Laois, Fianna Fail)
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-----higher of progressing into employment than had they not gone through that system. He said that system had better outcomes than community employment. When I asked him for the relative CE figure, he first told me that he did not know, but now he is saying that, according to the sector, it is approximately 40%.
Seán Fleming (Laois, Fianna Fail)
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Mr. McKeon has not shown us a material improvement. If there is a progression rate from community employment of nearly 40% whereas the other route's rate is 34%-----
Seán Fleming (Laois, Fianna Fail)
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Does Mr. McKeon understand the question?
Seán Fleming (Laois, Fianna Fail)
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May not-----
Mr. John McKeon:
-----which are produced by the sector are on progression into training, Tús and other CE schemes. It is not progression into paid employment. There are data. I just do not have them with me. The ESRI conducted a study of community employment outcomes a number of years ago. We have econometric studies of the impact of other schemes.
The figures are the same around the world. They are not unique to Ireland. State employment schemes tend to suffer from what are called lock-in effects. The general finding is valid. All over the world, employment advisory, case management and job search assistance services are more effective at moving someone into employment than schemes that effectively lock someone out of the labour market for at least a year.
Seán Fleming (Laois, Fianna Fail)
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Out of the open labour market.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I welcome the witnesses and congratulate Mr. McKeon on his appointment. I wish the Department a happy birthday, as it is 70 years old. Sometimes, our discussions are robust and abrupt, so I will cut in if I get an answer and move on to something else.
I looked through the appeals office's annual report for 2016. Of 13,754 appeals, 7,871 were fully allowed. That is 57%. Does that not suggest that our original assessments are not up to standard?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I have the precise figures here. They are in the report.
Mr. John McKeon:
No. Those are the successful outcomes. I am drawing a distinction. There are two phases to an appeal, as has been described. The first phase is a review by the deciding officer and the second is an appeal. The 57% successful outcome rate covers both of those phases. Ms Gordon will comment on this, but the other point-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does this mean that some of the Department's deciding officers are not interpreting legislation correctly?
Are they making incorrect decisions or does it mean that appeals officers are using discretionary powers?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, but-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I know that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am sorry for cutting Mr. McKeon short. It is not the case that we are not patting the Department on the back for all the stuff it does correctly. Our job here is to focus on what is not done correctly-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----and that is the €4.2 million it costs for the appeals office and the 13,754 appeals that had to be taken, 57% of which have been taken correctly. We know about all the good work that is going on. We are here to focus on what might be improved or is not going well.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay, and Mr. McKeon mentioned earlier-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. McKeon said that stakeholder groups hold back information for the appeal. What stakeholder groups?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am sorry but I wrote down specifically what Mr. McKeon said, which was that stakeholder groups advise their clients to hold back information for the appeal.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Can Mr. McKeon give me one example of a stakeholder-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----because it is important that we can identify those so that we can use our good offices to ensure that they do not do that. I assume that, as Deputies, we are all stakeholders. I can tell Mr. McKeon that I have not said to anybody that they should not send in the consultant's letter and to keep that for the appeal. I have never done that, and I would be very interested to know the stakeholders who are doing that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was Mr. McKeon wrong?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Then tell us.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We are all here in the public interest.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Give me an-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No. Mr. McKeon is going down a different path.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Sometimes it is adversarial in this committee but it is nothing personal. Mr. McKeon does not want to identify the stakeholders. He made a very important claim here. We are the only constitutional committee of the State that tries to save taxpayers' money so it is not credible for Mr. McKeon to come in here and say that stakeholders are advising their clients to hold back information for the appeal. It is not credible for him to say that is true but he cannot identify them. I ask Mr. McKeon to reconsider that and if he is not prepared to answer that question, give us a list of the stakeholders. We know Deputies are stakeholders because clients come to us. Who are the others? We might ask a group of them to come in here to allow us ask them if they hold back information or advise their clients to subvert the process and cost the taxpayer €4.2 million so that they can make 57% of the right answers because they did not have enough information. That is what Mr. McKeon is saying is the reason, and we want to get to the bottom of it.
Mr. John McKeon:
Let me deal with it. We deal with a variety of stakeholder groups, which would include representative bodies and advocacy groups. In those dealings we have formal and informal contacts. In informal contacts we have raised the issue of why we are seeing an increasing number of cases where additional medical information is being provided. It has been said informally to us, "We know that clients are holding back the information and, to be honest, we told them that is not a bad thing to do". They are informal contacts. I do not want to breach that informal confidentiality.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. McKeon told them it was not a bad thing to do or-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I ask Mr. McKeon for an example of two stakeholders.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. McKeon is not being fair to me. I am not in here to make up the numbers. I have a constitutional role here, just like Mr. McKeon.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not asking Mr. McKeon to give me an example of the guilty parties who said to him that they think it is a good idea to hold back information. I am asking him to pick two stakeholders who did not say that. I just want an example because I do not know the stakeholders. I thought people come to us because our clinics are so busy. I did not know there were others. Will Mr. McKeon give me an example of two such stakeholders?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Can he not name two as an example?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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This is Department waffle.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. McKeon says there is a long list of stakeholders. I am asking a simple question, namely, give me an example of one stakeholder so that we, as a committee, can consider who is on the list and choose ourselves, without his prompting, whether to call them into this committee and ask the question because this is a problem. There is €4.2 million at stake. We might make fewer mistakes if people are given other information. I will go even further. What is to stop the Department's deciding officer lifting the telephone to claimant A and saying, "Sorry, before we come down with the hammer, do you have additional information?", rather than sending out the letter stating, "Sorry. You are not getting it. Off you go to the appeal process. You have 21 days to do so"?
Mr. John McKeon:
As I was about to say, and I will ask Ms Vaughan to comment shortly because she chairs the community and voluntary pillar group where we meet regularly with the stakeholders I am talking about and she can give the Deputy some of the flavour of it, we work constructively with these stakeholders. I instanced the changes we have made to the carer's allowance form and the domiciliary care allowance form. They would have been done with stakeholders such as Family Carers Ireland and DCA Warriors. They are the kind of stakeholder groups we deal with on a regular basis, and there are many more besides. We deal with them positively and constructively. They will make comments to us informally and formally, and we have to respect that relationship if we are to make progress and have good relationships. It would be wrong of me to come in here and breach something they said in confidence such as, "This is an issue we need to deal with and we will work with you on it". I will ask Ms Vaughan to comment on the community and voluntary work we do because that might give the Deputy a different flavour.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No. Mr. McKeon got an opportunity to make an opening statement. I mean no disrespect to Ms Vaughan but I have a very limited amount of time. I am sure she has a lot to say in terms of the positives but we are not here to celebrate the positives; we are here to focus on areas we can improve.
Seán Fleming (Laois, Fianna Fail)
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Does Mr. McKeon not see the difficulty he has created? It has been said in the past that sometimes officers get tired if they are not getting the information and close the case too quickly but when Mr. McKeon comes in here and makes a statement about stakeholders possibly advising clients to withhold information, he cast an aspersion on a group of people. I do not know. It may not have been a wise comment to make. He has created a difficulty by making the statement and it is logical when a statement is made that it is pursued.
Seán Fleming (Laois, Fianna Fail)
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The other comment I would make as Chairman is that, as I read out at the outset, we ask people not to make charges against a person, entity or organisation not present in the room in such a way as to make him, her or it identifiable. That was read to Mr. McKeon. I have to remind him of that, and I understand, but by making a statement he threw something into the arena that he cannot back up in public. Does he get the point?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Perhaps after this meeting the Department can send a full list of stakeholders to the clerk to the committee and we, as a committee, can determine whether we want to bring in a percentage of them to ask about this process. I have other questions so will I move on?
Seán Fleming (Laois, Fianna Fail)
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Does Mr. McKeon get the point?
Mr. John McKeon:
I do, and we would be happy to do that and we would be happy to talk to any member in private, but I have to make the point that for administrations to work efficiently and effectively and deal with stakeholders, we have to have confidential conversations with them. I have reflected, and perhaps I should not have, something that was said in confidence.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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There is no issue.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am glad Mr. McKeon said it because he has highlighted something on which we need to focus.
Seán Fleming (Laois, Fianna Fail)
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We will move on.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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A huge percentage of appeals are successful. That either means we are not doing our job correctly or others are subverting the process. We need to examine that because €4.2 million is being spent on the appeals office that I am sure could be better spent on carer's allowance or whatever. Is there cross-departmental consistency on determining criteria? Does Mr. McKeon sit down with his counterparts in the Departments of Education and Skills, Finance, Public Expenditure and Reform, and the Taoiseach and agree that a dependant is X? I will give an example. In terms of jobseeker's allowance, somebody is deemed dependent while they are living at home and, regardless of parental income, independent once they are 24 years of age. Is that correct?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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After 24 years of age one is independent in terms of jobseeker's allowance.
Is it correct that once one reaches 24, whether one is living at home or not and regardless of one's income, one is independent?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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A person aged over 23 who qualifies for back-to-education allowance who had been living at home with his or her parents the previous October is deemed independent and as a result refused financial support from SUSI.
Mr. John McKeon:
I will have to answer some of the Deputy's question subsequently. We apply the rules as they are laid down in legislation. The law with respect to who is a qualified adult, for the purposes of our schemes, is set out clearly in legislation and we apply that rule. That is what we do. The Deputy is saying there are inconsistencies in who SUSI considers to be an adult and who we consider to be an adult. I might have misled the Deputy in what I just said. Once a person is over 24 years of age and living at home, we do not take into account the family's earnings in assessing his or her means. We are not saying the person is an adult at that point. All we are saying is once a person is over that age we no longer assess the family's means when assessing his or her means. We do not take the fact that a person is living under his or her parents' roof into account in assessing means.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I understand exactly what the Department does. Is there a cross-departmental link so there is consistency of interpretation? A person is independent at 24. However, because a person lives at home, even though he or she qualifies for everything and the system wants to get people back to work and educate them, because a person happened to be living at home the previous October as a dependant, he or she will be refused supports administered by SUSI, yet if a person is not on the back-to-education scheme, he or she is independent.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Could I respectfully ask-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----that we link the Departments and develop consistency on that.
Mr. John McKeon:
I will take that suggestion on board. I refer tot he case of a young person who is living at home with his or her parents and is on a reduced rate of jobseeker's payment because the parents' means is taken into account. That person will still have access to the back-to-education allowance scheme and if he or she goes on the back-to-education-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They are not the issue.
Mr. John McKeon:
If he or she goes on the back-to-education allowance scheme, the payment is maxed-up to the full adult rate. If a person does not get the SUSI grant because he or she is living at home with his or her parents, he or she can still get the back-to-education allowance from us, which in many respects is more favourable than the SUSI grant.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is not our experience in terms of somebody trying to get back into education and get fees and so on.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes, but the person is getting no assistance with fees.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is the problem. Mr. McKeon might interlink with the Higher Education Authority, HEA, or Department of Education and Skills and drop us a note back following that engagement because there is an inconsistency there.
Seán Fleming (Laois, Fianna Fail)
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Mr. McKeon understands the difficulty.
Seán Fleming (Laois, Fianna Fail)
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A person would not be eligible for a grant based on his or her parents' means but he or she will be eligible for-----
Mr. John McKeon:
We will raise the issue with the Department of Education and Skills. Our means test is set down in law. We have no plans to change it. I cannot say what the views of the Department of Education and Skills are. Perhaps that is something the committee would need to take up with the Department of Education and Skills. We will raise it with that Department but it is its rule and not ours.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We only get one shot at Mr. McKeon's Department once a year. I am sure Mr. McKeon has lots of opportunities to talk to colleagues cross-departmentally. In order to save us a year and the people money, perhaps Mr. McKeon could have a chat with the Secretary General of each of these Departments and drop us a note back on it. It is not rocket science but if Mr. McKeon could do that, it would be great.
Seán Fleming (Laois, Fianna Fail)
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Rather than us separately asking the Department of Education and Skills, because it will tell us to go talk to Mr. McKeon's Department, we are asking the Departments to do the talking with each other. There are inconsistencies in the two schemes.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Our issue is solely taxpayer's money and services to the people. It is not a gold star for one Department and a slap on the wrist for the other. It is a case of working together and getting the optimum outcome because we cannot have inconsistencies in the determination of schemes which ultimately discriminate against people. That is the issue.
Mr. McKeon said that in terms of communications, the Department has good schemes and it announces things. There was the fraud scheme but I want to address something different. I heard the invalidity pension advertisement recently. Was that by Mr. McKeon's Department?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I must say it was very good. I noted a change. I remember when the Department did things in the past it would say it was an announcement by the Department. Is that true?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I noticed lately the advertisements have the footer, "A Government of Ireland announcement."
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was that the Department's idea or is it related to the €5 million unit of Mr. Concannon?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did we come up with this internally or was it a cross-departmental decision?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who decided that?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Its origin is-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----the new communications outlet.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not expect Mr. McKeon to comment on policy but, from a punter's perspective, it gives a sense of political ownership to an announcement as opposed to saying it is a Department of Employment Affairs and Social Protection initiative.
Mr. John McKeon:
I disagree. There is a Civil Service Management Board which considered it, which is comprised of the Secretaries General of the various Civil Service Departments.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They did not decide on this one. This one came from the communications unit.
Mr. John McKeon:
They approved it. It was brought forward by the Department of the Taoiseach and approved by that management board. To be fair, this is something that is being sponsored by the Department of the Taoiseach as a Civil Service Government initiative. That is my experience of it and I can only speak to my experience.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am right in saying it is a new initiative. Its origin is the new spin - sorry, communications - unit. We will have that across the board. When the Road Safety Authority is making an announcement, will it be the same? Will it be a Government of Ireland initiative?
Mr. John McKeon:
It has the support of the Civil Service Management Board. That is my experience. It is a Civil Service-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am sure the opening of Stepaside Garda station had the support of the Civil Service Management Board too but that is another matter. Has there been a cross-departmental assessment or cost analysis of carer's allowance with the Department of Health, the HSE, disability services or local authorities, to see if a loosening of the criteria for carer's allowance is possible? Could we reduce, loosen or abolish the means tests on carer's allowance, combined with other supports such as medical cards, housing adaption grants and home care to reduce dependency on long-term care in nursing homes, thus freeing up acute beds? Could we reduce the net overall cost by giving carer's allowance to people to care for a loved one whether an aunt, brother, sister, mother, father or child at home? On average, it is €1,000 a day for an acute bed and €1,000 a week for a nursing home bed. Is there merit in combining carer's allowance with a medical card, home help or adaption grants? Would it be a lot more cost-effective for us to reduce, abolish or loosen the criteria for carer's allowance rather than dishing out €1,000 a day or €1,000 a week in State funds for long-term care? Has a cost analysis been done on that? If not, as with the other linking we have asked Mr. McKeon to do, could he engage in it and give us a note on it?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No one is going to give Mr. McKeon 20 lashes for using initiative.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Sure.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not asking Mr. McKeon to advocate for it. Policy is determined and adopted by the Government, and implemented by the Department of Employment Affairs and Social Protection. However, policies are often determined by the Government having been advised by the Department. Could such a body of work be undertaken? It would be very useful for us from a Committee on Public Accounts perspective to know if we could advise and recommend to the Government that if we could do this, then the saving could be-----
Seán Fleming (Laois, Fianna Fail)
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I am going to help the Deputy on that by addressing his question to Ms Gráinne McGuckin of the Department of Public Expenditure and Reform. That is the Department that should be looking at this issue in terms of savings between carers allowance-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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As I was a little late, I did not realise Ms McGuckin was in the room.
Seán Fleming (Laois, Fianna Fail)
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The witness gets the point that her Department should be the lead Department-----
Seán Fleming (Laois, Fianna Fail)
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-----because of public health, social protection and other grant schemes rather that just social protection.
Ms Gráinne McGuckin:
I know the point the Deputy is making. It clearly has cross-cutting implications and it would involve a certain amount of co-operation across Departments. It would involve Ministers deciding that they wanted to go down that route. Certainly, that type of analysis would be the type one might look at in the context of spending reviews perhaps. We would look at that. I cannot give any commitment but it is that type of cross-cutting issue. I know what the Deputy is saying.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I will finish on this as I am taking up a lot of time. I know the witness cannot commit and that policy is for the Government. However, we can certainly ask. Would Ms McGuckin ask the Secretary General that a few hours be put aside for the relevant principal officers, Assistant Secretaries General or Secretaries General to sit down and look at this. Its outcome would be something this committee would be very interested in. It has nothing to do with witnesses' Departments forcing policy. We are asking the witnesses to do it.
Seán Fleming (Laois, Fianna Fail)
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On the issues.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If Ms McGuckin could-----
Seán Fleming (Laois, Fianna Fail)
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We know that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is a matter for the Government.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We are not asking the witness to say whether it should or should not be done. We will make that decision in terms of what we would like to recommend. What the witness could do is say this is the analysis we have done, here is what we think it would cost and here is what we think the outcome will be. We are not asking Ms McGuckin to recommend or force a policy-----
Seán Fleming (Laois, Fianna Fail)
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Information-----
Seán Fleming (Laois, Fianna Fail)
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Very good. I thank Ms McGuckin.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank the witness.
Seán Fleming (Laois, Fianna Fail)
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I call Deputy Cullinane.
David Cullinane (Waterford, Sinn Fein)
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I welcome Mr. McKeon and his team. On pages two and three of his opening statement, Mr. McKeon mentioned fraud and error several times. I know some of this was dealt with earlier. Unfortunately, I had a media interview so I missed some of that. Apologies if I repeat any of the questions. Mr. McKeon is ultimately responsible as the Accounting Officer, but which of his colleagues has specific responsibility for oversight of fraud and error?
David Cullinane (Waterford, Sinn Fein)
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I might come to Ms Stack at some point. On page three, Mr. McKeon refers to the overall fraud and error level, with the net level being 2%. Was that in 2016?
David Cullinane (Waterford, Sinn Fein)
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It is over a five-year period. The witness went on to refer to the range being somewhere 0.5% and 5%. Is that correct?
David Cullinane (Waterford, Sinn Fein)
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However, it is the range. The average is 2% but the range is between 0.5% and 5% over 13 different schemes.
David Cullinane (Waterford, Sinn Fein)
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The outlier was farm assist, which was 10.4%. However, the rest are between 0.5% and 5%, by and large.
David Cullinane (Waterford, Sinn Fein)
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Can Mr. McKeon give us a breakdown of those 13 schemes and what the percentages are?
David Cullinane (Waterford, Sinn Fein)
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I do not need the witness to talk about the schemes. Focus only on the figures.
David Cullinane (Waterford, Sinn Fein)
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Can we get this up on the screen?
David Cullinane (Waterford, Sinn Fein)
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The range is somewhere between 0.5 % and 5% but the average is 2%. It is noted that the Comptroller and Auditor General sees the 2% figure as material - in other words, it is enough to merit attention. However, the witness makes the point that in international comparison, it is not out of kilter. Can I have a breakdown then? The percentages are on the right-hand side.
David Cullinane (Waterford, Sinn Fein)
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In these 13 different areas, what is the breakdown of what is fraud and what is error in the net figures?
David Cullinane (Waterford, Sinn Fein)
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I do not want approximate figures Mr. McKeon, I want accurate figures.
David Cullinane (Waterford, Sinn Fein)
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Yes, for each scheme.
David Cullinane (Waterford, Sinn Fein)
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I will tell the witness why I want them and why I think he should have them. This is one of the issues that was identified by the Comptroller and Auditor General. The following is the problem I want to tease out with him. I am reading from his opening statement where he stated: "...the overwhelming majority of our customers who are open and honest in their dealings with the Department and imposing controls and checks that are intended to reduce fraud and error when the evidence is that levels of fraud and error are relatively low." He also stated: "We cannot and will not pursue the elimination of error or fraud...". In the next paragraph he talked of fraud and error surveys. He also talked about fraud and error into the future and said that in most schemes surveyed this ranged between 0.5% and 5%. Why is fraud and error lumped into one category?
David Cullinane (Waterford, Sinn Fein)
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I want Mr. McKeon, as the Accounting Officer, to explain in layman's terms the difference between fraud and error.
David Cullinane (Waterford, Sinn Fein)
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Please, and then answer the question about the difference between fraud and error.
David Cullinane (Waterford, Sinn Fein)
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Mr. McKeon can, of course.
Mr. John McKeon:
The difference between fraud and error is specified in section 302 of the Social Welfare Consolidation Act 2005, where fraud is where customers fail to provide information which results in us paying them too much and where the failure to provide information, or the provision of false information, was a deliberate, wilful and knowing act. The onus of proof for fraud at the point of claim is with the claimant but on review the onus of proof is on the Department. If we are going to categorise something as fraud, we have to be able to say beyond a reasonable doubt that not only did we not get the right information from the customer and that we can see it was withheld, but we know that it was done wilfully, knowingly and deliberatively. That is the distinction.
David Cullinane (Waterford, Sinn Fein)
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It is a very important distinction. Mr. McKeon can hold off on the breakdown because I will come to that. Stick to this theme of the difference between fraud and error because it is very important. Mr. McKeon has given the distinction and I accept it. Our understanding of the difference is a shared one. Is fraud a criminal act?
David Cullinane (Waterford, Sinn Fein)
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Is error a criminal act?
David Cullinane (Waterford, Sinn Fein)
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Is there a stigma attached to fraud?
David Cullinane (Waterford, Sinn Fein)
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It is fair to say there would not be the same level of stigma attached to error.
David Cullinane (Waterford, Sinn Fein)
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An error is not deliberate, intentional or has criminal consequences. Fraud is a deliberate act to defraud the State.
David Cullinane (Waterford, Sinn Fein)
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That puzzles me. Every single time Mr. McKeon mentioned fraud, he mentioned error. Going back over his opening statement, it contains the words "fraud and error". That is not an appropriate way to deal with both issues. In process terms, the Department needs to separate instances of fraud from instances of error. The reason is because the media perception when these figures are covered is that this is all about fraud and not necessarily about error.
Over the course of five years, the net level of fraud and error is 2%. The assumption could be that the level of fraud was 2%. However, that is not the case because Mr. McKeon said only 30% is actual fraud. Is that correct?
David Cullinane (Waterford, Sinn Fein)
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What is the net level of fraud compared with the net level of error over the five years?
Mr. John McKeon:
From a control perspective, as Accounting Officer, I am trying to reduce unnecessary spend. The sources of unnecessary spend are departmental error, namely, my staff making mistakes, customer error, namely, the customer mistakenly giving us the wrong information, and fraud. There are three components of the one matter. The Comptroller and Auditor General reports on them as fraud and error, meaning I have to account for them as fraud and error.
David Cullinane (Waterford, Sinn Fein)
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I am posing the questions. The Comptroller and Auditor General can have whatever processes he likes, I am posing the questions. Lumping in fraud and error as one, even in terms of controls, is not the appropriate way to deal with it. One can still deal with them separately.
The Secretary General can give us separate figures on fraud, error and overpayments. Then we can see what the scale of the problem is. In his opening statement, Mr. McKeon stated the net level of fraud and error over 13 schemes is an average of 2%. What are the separate net level figures over the five-year period for fraud and error? If Mr. McKeon does not have the figures, Ms Stack might have them.
David Cullinane (Waterford, Sinn Fein)
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What is meant by overall figure?
David Cullinane (Waterford, Sinn Fein)
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What is the distinction between fraud and error?
David Cullinane (Waterford, Sinn Fein)
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On the very first payment we deal with, error accounts for 80% while fraud is only 20%. That is a good enough reason these fraud and error figures should be clearly separated.
David Cullinane (Waterford, Sinn Fein)
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They were not in the presentation to us.
David Cullinane (Waterford, Sinn Fein)
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I see the net figure but I do not see it broken up between fraud and error. Mr. McKeon's opening statement is important. He has dealt with chapter 16 of the Comptroller and Auditor General's report. Every time he spoke about fraud, he referred to error. With respect, today, he did not give any distinction between fraud and error. Nowhere in his opening statement did he give that distinction or the breakdown. I have had to tease those figures out. We now know the majority of the moneys which should not have been paid were paid in error while the minority was fraud.
Mr. John McKeon:
To be fair, I quoted the figures in the Comptroller and Auditor General's report because that is what I must respond to. I was careful to talk about the overwhelming majority of customers being open and honest in their dealings with the Department. I clearly said the evidence is that the levels of fraud and error are relatively low. I was careful to say we cannot frustrate access to entitlement. I was careful to say that only a small minority of people are, regrettably, involved. Although I did not put the figures out, I was clear to draw the distinction. In our fraud and error studies, which we publish, the figures are clearly broken down and are on our website. The Department is always careful when it discusses this issue to draw that precise distinction. Today, I was asked to respond to the data in the Comptroller and Auditor General's report and that is what I did.
David Cullinane (Waterford, Sinn Fein)
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I am not convinced that Mr. McKeon did.
Mr. John McKeon:
I am sorry. I could have put the figures in. However, there is certainly no intention on my part to overstate the existence of fraud. I thought I had been clear in pointing out how fraud is overstated in the public. If the Deputy had been here for the earlier discussion, he would have heard me talk about the level of fraud being sensationalised in a way it should not be.
David Cullinane (Waterford, Sinn Fein)
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In his concluding remarks, Mr. McKeon said there is a small amount of fraud in the system. He acknowledges that. My point is that in accounting terms and in the substance of where fraud is dealt with, it is dealt with in the context of error as well. The figures are the overall ones and they are not separated. Mr. McKeon should be conscious of that for obvious reasons.
David Cullinane (Waterford, Sinn Fein)
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I want to get to the obvious reasons because they were already dealt with.
David Cullinane (Waterford, Sinn Fein)
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I acknowledge that. I know it was dealt with already and I know Mr. McKeon cannot comment on the actions of a Minister or the Government. However, we had a high-profile campaign which attracted much media attention in suggesting the levels of fraud in the social protection system were potentially much higher than they were. There was a bus advertising campaign in which the words "social welfare cheats" were used. How much did this campaign cost? Whose idea was it? Did it come from a civil servant or was it more from the political sphere?
Seán Fleming (Laois, Fianna Fail)
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I just want to point out to Deputy Cullinane that we had a discussion on this earlier when he was absent. However, I will allow it carry on.
Mr. John McKeon:
The final cost for the campaign was €163,000, excluding VAT. The net cost to the Exchequer was €163,000. The intention to have a communications campaign about the issue of providing correct information to deter fraud and to assure customers that the Department takes fraud seriously was a departmental view.
David Cullinane (Waterford, Sinn Fein)
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Is this the welfare cheats campaign?
Mr. John McKeon:
No, the proposal and the intention to have a communications campaign was the Department's. It has been in our fraud and error control strategy for some time now. All other administrations do such campaigns. It has been communicated to us before in this forum that we should do more to communicate about this matter. That was on the table.
The actual campaign was developed in a tender process by an external company. We have received feedback on the messaging which I have taken on board. I think we have learned from putting the word "cheat" beside "welfare".
David Cullinane (Waterford, Sinn Fein)
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Was it a mistake?
David Cullinane (Waterford, Sinn Fein)
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I know questions here can be robust but I commend Mr. McKeon on accepting that it might have been a mistake and learning from the process. It is important as we do not get enough of this from Accounting Officers. That is the right approach. Which of Mr. McKeon's colleagues is responsible for JobPath?
David Cullinane (Waterford, Sinn Fein)
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How much did JobPath cost from July 2015 to September 2017?
David Cullinane (Waterford, Sinn Fein)
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Some €71 million per year. Is Mr. McKeon accountable for that?
David Cullinane (Waterford, Sinn Fein)
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Mr. McKeon is accountable for that expenditure.
David Cullinane (Waterford, Sinn Fein)
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How is that money spent? Who is it given to?
David Cullinane (Waterford, Sinn Fein)
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Turas Nua and Seetec?
David Cullinane (Waterford, Sinn Fein)
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Can Mr. McKeon answer questions on the detail of the expenditure of €71 million? How was it spent?
Seán Fleming (Laois, Fianna Fail)
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I take it there is a service level agreement.
David Cullinane (Waterford, Sinn Fein)
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The level of detail is important because, as I pointed out earlier, there is a lot of outsourcing in the public sector. We are outsourcing service delivery. It is our job to make sure all the money is spent wisely. In process terms, we need to be able to ensure we hold accountable officers to account but, because there is a service level agreement in place and the service delivery is outsourced, we get very general responses back to the effect that it is for the contracted organisation to account for how the money is spent. It should not be a matter for the organisation but for the Accounting Officer.
I have questions on the fees that are paid. My understanding is that an initial registration fee is paid. Is that the case?
David Cullinane (Waterford, Sinn Fein)
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How much is that?
David Cullinane (Waterford, Sinn Fein)
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I have asked Mr. McKeon a simple question and the first response was, "I do not want to say". Why can he not say?
David Cullinane (Waterford, Sinn Fein)
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Can I stop Mr. McKeon there? I have heard what he is saying.
David Cullinane (Waterford, Sinn Fein)
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No. I want to stop Mr. McKeon. I accept what he is saying. I want to turn to the Chairman because this is a problem here.
Seán Fleming (Laois, Fianna Fail)
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Yes. I understand that.
David Cullinane (Waterford, Sinn Fein)
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There is a figure of €71.2 million over two years. The service delivery is outsourced to two companies. The very first question, a simple one, was on the value of the initial registration fee paid. We cannot even get that initial registration fee because of commercial sensitivity, I would imagine. That is the problem with this outsourcing. How are we meant to understand how this money is spent or whether the initial registration fee is appropriate? How are we to understand anything in regard to it if we cannot get those figures?
Seán Fleming (Laois, Fianna Fail)
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Is there a separate registration fee for each organisation?
Mr. John McKeon:
There are two different registration fees. This is as much about protecting the State's interest because we do not want one provider asking, "Since they charged X amount and we charged X minus, why do we not try to get our fees increased?" We have got to keep the figures confidential. It is protecting the State's interest.
I acknowledge people have different views on JobPath. The actual remuneration model is an outcomes-based model. Other than the registration fee, which, as I said, is less than 10% of the overall fee, they only get paid-----
David Cullinane (Waterford, Sinn Fein)
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I am going to come to that now in terms of performance.
David Cullinane (Waterford, Sinn Fein)
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I just want to put a number of other questions. My first observation is that Mr. McKeon makes the point that confidentiality could be seen as a way of protecting the State. Mr. McKeon sees it in that light. He wants to make sure we get the best possible price. There is logic to that but only on the basis that one accepts that outsourcing of all the service delivery is good. Confidentiality also means we do not have accountability, or, at least, full accountability and transparency.
David Cullinane (Waterford, Sinn Fein)
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He is not accountable to me today because he cannot tell me what the registration fee is. That is my question. He is accountable to me but he cannot actually be accountable because he is saying a wall has been put between us. The wall is confidentiality and commercial sensitivity. While one could argue at one level that this is about protecting the State, this is the Committee of Public Accounts, at which members put questions to Mr. McKeon about how money is spent.
I want to get to the next question.
David Cullinane (Waterford, Sinn Fein)
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I am not easily frustrated. It is not frustration but a matter of probing and trying to get answers to questions.
Mr. John McKeon:
I accept the frustration. The Deputy can ask about — this is germane to the question of whether the money is being spent effectively — the overall amount being spent, the employment outcomes that are being achieved and the quality of service. He can ask about whether the total expenditure delivers the same or better outcomes than are delivered through expenditure in other areas.
David Cullinane (Waterford, Sinn Fein)
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I thank Mr. McKeon for the advice on what I can ask questions on but I am the one asking the questions.
David Cullinane (Waterford, Sinn Fein)
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I will determine whether the questions are relevant.
The initial registration fee is one part of the payment. Payments are made when a client achieves sustained employment. There could be a number of payments. What is the range of payments made?
David Cullinane (Waterford, Sinn Fein)
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What is the average payment?
David Cullinane (Waterford, Sinn Fein)
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This is where the jobseeker has developed a personal progression path.
David Cullinane (Waterford, Sinn Fein)
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What I am looking for is an average. Mr. McKeon is saying payments are made.
David Cullinane (Waterford, Sinn Fein)
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Three tiers of payment. What is the average payment?
Mr. John McKeon:
Can I just explain? There are different payments made depending on the previous duration of unemployment of the individual concerned. It is determined whether the person is unemployed for one to two years, two to three years, or more than three years. It is quite a complex payment structure. As I said, the total amount we are paying out is in the order €30 million to €35 million per year. Some 10% of the fees are registration fees. The balance is sustainment fees predominantly. Since we have a competitive tendering process and closed procurement, publishing the figures takes away our negotiating position in trying to get the best value for the State.
David Cullinane (Waterford, Sinn Fein)
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For clarification purposes, is Mr. McKeon telling me again that he is not in a position to give us even the average sum paid to company based on an individual? We are not looking for an individual breakdown for each person. Is it not even possible to give the average in the range?
David Cullinane (Waterford, Sinn Fein)
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I do not accept that.
Seán Fleming (Laois, Fianna Fail)
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Is the Deputy looking for a total or-----
David Cullinane (Waterford, Sinn Fein)
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I know why. Mr. McKeon explained it to us.
David Cullinane (Waterford, Sinn Fein)
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That is not my model. I am saying there is a flaw in this model. The flaw in the model is not a matter of the service delivery and whether the two organisations are providing a good service. That is a matter of policy and judgment; it is subjective. We are here to evaluate processes and also the expenditure of money. In process terms, I have a concern. It is reasonable for me to at least want a range or the average. I do not believe a range or average would necessarily-----
Seán Fleming (Laois, Fianna Fail)
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How many have gone through the system?
Seán Fleming (Laois, Fianna Fail)
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Various people-----
David Cullinane (Waterford, Sinn Fein)
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That average would be €500.
Seán Fleming (Laois, Fianna Fail)
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What statistics does Mr. McKeon have?
David Cullinane (Waterford, Sinn Fein)
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Could I ask the question in a different way? It might be helpful.
Seán Fleming (Laois, Fianna Fail)
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What we do know is that €35 million has been paid for the service. Is Mr. McKeon telling us the output is visible on the website?
David Cullinane (Waterford, Sinn Fein)
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Maybe I could be more helpful. There are two organisations, Turas Nua and Seetec. Is that right?
David Cullinane (Waterford, Sinn Fein)
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There was €71.2 million spent between July 2015 and September 2017. Is Mr. McKeon in a position to give us a breakdown as to how much went to Turas Nua and how much went to Seetec?
David Cullinane (Waterford, Sinn Fein)
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This is not about protecting the State or about the precise breakdown of expenditure. An amount of money was given to Turas Nua. Mr. McKeon signed the cheque. We had a discussion on RTÉ recently. At least we know how much money was given to it.
Seán Fleming (Laois, Fianna Fail)
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RTÉ would not tell us how much it gives to each film producer.
David Cullinane (Waterford, Sinn Fein)
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I am not asking that; I am just asking about the overall amount given to Turas Nua. I am asking about the cheque Mr. McKeon signed for the time period. How can he not give us that?
David Cullinane (Waterford, Sinn Fein)
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It is not.
Seán Fleming (Laois, Fianna Fail)
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We will have to discuss that. Mr. McKeon has drawn the line on commercial sensitivity. A certain sum is paid. Bluntly, what Mr. McKeon is saying is that if he publishes which organisation is getting less than the other, the one getting less will be in tomorrow morning saying it wants more because more is being paid to the other.
That is a cost to the State and we have to understand that too.
David Cullinane (Waterford, Sinn Fein)
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I do understand that. What I am saying is that we are today at a meeting of the Committee of Public Accounts. The Accounting Officer is here. We have two organisations that get very significant amounts of money from the State and we are not even in a position to know how much taxpayers' money is given to them. That is unbelievable.
David Cullinane (Waterford, Sinn Fein)
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I am not interested in the overall programme. I am a public representative and I get paid a salary. People know what I get. We know exactly how much is given to each organisation. I only gave the example of RTÉ because we know that €170 million is given to that organisation. We do not have to go into the precise details of how that money is spent, but we at least know the gross figure that is given. Mr. McKeon cannot even give us the gross figure for what is given to an organisation but that is basic accountability. That is the very simplest form of accountability but we are not even in a position to know how much this organisation gets. I want to get advice on that because I do not accept that it would be commercially sensitive.
Seán Fleming (Laois, Fianna Fail)
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We are going to park this topic-----
David Cullinane (Waterford, Sinn Fein)
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I want to get a legal opinion on that.
Seán Fleming (Laois, Fianna Fail)
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In terms of the public arena, Mr. McKeon says the numbers on the scheme have been published, as have the costs. I ask him to send us whatever information he has on this. Anybody, even the two companies, should be able to work out -----
Seán Fleming (Laois, Fianna Fail)
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Is there is more information that Mr. McKeon can give us that is not company specific?
David Cullinane (Waterford, Sinn Fein)
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I will park and leave that now because other members want to get in.
Seán Fleming (Laois, Fianna Fail)
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Yes. We are well over the time allocated.
David Cullinane (Waterford, Sinn Fein)
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By the way, my frustration is not with Mr. McKeon personally but with the process. I have a job to do and if I cannot get basic information, I cannot do it and that is a source of frustration.
Seán Fleming (Laois, Fianna Fail)
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Deputy Catherine Murphy is next.
Catherine Murphy (Kildare North, Social Democrats)
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The witnesses are very welcome. The JobPath scheme replaced JobBridge.
Catherine Murphy (Kildare North, Social Democrats)
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JobBridge was phased out after-----
Catherine Murphy (Kildare North, Social Democrats)
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The contract for JobPath went to competitive tender.
Catherine Murphy (Kildare North, Social Democrats)
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How many companies tendered for the contract?
Catherine Murphy (Kildare North, Social Democrats)
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Seetec and Turas Nua got the contracts in December 2013. Is that correct?
Catherine Murphy (Kildare North, Social Democrats)
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Obviously those companies that tendered for the contract had to meet certain specifications. They had to have tax clearance, they had to have generated a minimum amount of revenue in a certain number of years to indicate that they were large enough and so forth. I could be wrong but it appears to me that there was an Irish version of the companies set up. Is that not correct? On 28 October 2014 Seetec Business Technology Centre Limited set up Seetec Employment and Skills Ireland as a designated activity company. That happened after the tendering process.
Catherine Murphy (Kildare North, Social Democrats)
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How is that the same legal entity?
Catherine Murphy (Kildare North, Social Democrats)
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So Seetec Business Technology Limited is the parent company for Seetec Employment and Skills Ireland. The parent company for Turas Nua is FRS Recruitment and Working Links Employment Limited.
Catherine Murphy (Kildare North, Social Democrats)
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An inquiry was conducted by the UK's equivalent of this committee, namely, the House of Commons Committee of Public Accounts, into the parent company of Seetec Employment and Skills Ireland and into Working Links. The companies were accused of artificially inflating the figures for people with disabilities. Did the Department pay any attention to that when the contract was being awarded?
Mr. John McKeon:
We did, yes. We spoke to the British Department for Work and Pensions and we looked at the various national audit office reports in the UK. The Department for Work and Pensions published a statement declaring that neither company had been guilty of any material wrongdoing. It found that there were errors in some of their claims but that they were small in number and were attributable to human error. There were one or two other providers in the United Kingdom that we did not take forward because they were involved in fairly egregious issues in the UK, which were the main focus of the parliamentary inquiry to which the Deputy referred.
Catherine Murphy (Kildare North, Social Democrats)
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What did the Department do, in terms of putting in controls, to make sure that there would not be problems into the future? What did it do to make sure that the figures would not be inflated, for example? What level of oversight does the Department have?
Mr. John McKeon:
Many countries have contracting models. The two most advanced are Australia and the United Kingdom. There are also useful models in the United States, Germany and Sweden. We looked at all of them and took what we thought were the best elements of each. The employment claims in the United Kingdom are based on representations by the provider who says, for example, "I got John McKeon a job". We do not accept that alone. We check all employment outcomes against commencement of employment notices that we receive from the Revenue Commissioners and against our own records in terms of somebody signing off the live register. That is an automatic check. We check to make sure that the person is in employment and is not claiming a welfare payment. That was a failure in the United Kingdom. We have also built in controls with regard to pricing. Our pricing is linked to the overall level of employment in the economy, which makes it more complicated. As the overall level of employment in the economy grows, our prices fall so that the companies cannot cream or skim. We also have audits in place and we do field audits of all the offices. That was not done in the United Kingdom.
Catherine Murphy (Kildare North, Social Democrats)
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I have had people come to me with individual complaints, one of which I raised in the Dáil a few months ago. An individual was hounded to sign a form. He went off and got a job himself but was hounded, as was his new employer. He did not know how the JobPath company even managed to identify his new employer. He was hounded into signing a declaration to the effect that Seetec had secured the job for him. If that case were replicated, then the percentages would be wrong in terms of the success rate, but the companies are paid on performance. I have had other people tell me, for example, that they have been told that they will have to give up part-time employment. Several people who work around 20 hours per week are having difficulties. They are being called for appointments with JobPath at times when they are working. There is no flexibility in the system which seems to be daft. It also seems to go against the very point of progression. I wonder why people in that situation are in the target group at all because technically they are not long-term unemployed. They are working but are in receipt of a social welfare payment.
Mr. John McKeon:
I can deal with those issues for the Deputy. First, we have a number of checks around people getting into employment. As well as our own checks in terms of commencement of employment notices from Revenue and so on, we ask the JobPath providers to get a signed note from the employer.
It is a belt and braces check and I suspect that is where the first issue is arising.
On the part-time employment aspect, under the legislation people who are in part-time employment receive a casual jobseeker payment on the basis that they are looking for full-time employment. They are within the scope. If one has been working casually or part-time for a long period of time, more than 12 months, one is long-term unemployed under our definition and we want to help the person to get a full-time job if that is what the person is trying to do. If the person is not trying to get a full-time job that is perfectly fine, but one is not entitled to a payment. That is where it comes from. That is the law and we must apply it.
If there are other issues, and I do not wish to take up the Deputy's time, we carry out audits of the JobPath providers. We also carry out customer satisfaction research. Our payments are based on the providers meeting minimum standards in those audits. I am interested to hear of any bad examples because it will help us-----
Catherine Murphy (Kildare North, Social Democrats)
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I will be frank. I tried to get people to allow me to pass on their names but they are afraid of being victimised.
Catherine Murphy (Kildare North, Social Democrats)
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The witness can understand the position of people in vulnerable situations. They might feel they will be cut off from a welfare payment if they put their heads above the parapet. One cannot force people to give their details. I have encouraged a number of people who have approached me to do that because I understand how those specific cases help in understanding how this works.
Mr. John McKeon:
If the Deputy gets their names she could tell them she will give them to me personally. I will assure them they will not be victimised. Leaving aside JobPath providers, even our own staff hear stories but often those stories are anonymous. As a manager one must get the detail if one is going to make a change. I will personally assure those people they will not be victimised.
Catherine Murphy (Kildare North, Social Democrats)
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I will talk to them. I thank the witness for that. Usually individual cases will show a trend as well. I am more interested in the system but individual cases will give one a glimpse into the system and what could go wrong.
We are looking at this from the point of view of whether it is value for money and whether it is progression. Essentially, my understanding of what happens in this process is that the companies are given the detail of an individual who they must sign up to JobPath. The information is passed on from the Department.
Catherine Murphy (Kildare North, Social Democrats)
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After that the person is asked to sign a contract.
Mr. John McKeon:
No, it is not a contract but what we call a personal progression plan. People are asked to do that whether they are working with an Intreo case officer from our Department, a JobPath case officer or a local employment services case officer. In every case we expect the jobseeker to sign up to a personal progression plan.
Catherine Murphy (Kildare North, Social Democrats)
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Then they give permission for their personal data within the contract they sign. It is a personal progression plan but they give permission for things in it. I have seen some of these and they give permissions. In terms of protecting the Department and the process into the future, is their information held here or in the UK?
Mr. John McKeon:
It is all held in Ireland. By law, it could be held in the United Kingdom because it is still within the European Union, but in the contract discussions we emphasised that it was our strong preference the data would be in Ireland. The various providers committed to that. All the data is owned by the Department so it has to be returned to the Department. They are acting as agents of the Department. Incidentally, I have been informed that nine companies tendered.
Catherine Murphy (Kildare North, Social Democrats)
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In terms of value for money, I understand from talking to people who have experience with this that the person sits in front of a computer, and they are supervised or there is somebody in the room, and they must go throughjobs.ie. It is nothing more than that. Is the Department looking at this from the point of view of how it is interacting with the individual or is it just looking at the outcomes in terms of progression? Does that other element not matter?
Mr. John McKeon:
There are two matters in that regard - first, the service being provided and, second, the outcomes. We have a minimum service guarantee which is specified in part of the contract. It sets out the minimum range of services that should be provided for jobseekers, one of which is sitting down with them at computers and going through vacancies with them. There are many other things as well. If that is all they are doing, I want to hear about it.
Catherine Murphy (Kildare North, Social Democrats)
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It is not what I am hearing.
Mr. John McKeon:
The other thing they are meant to do is work closely with employers to generate vacancies and jobs. All of that is specified. We send out auditors, unannounced, to examine what is happening in the offices. We have not encountered any issues in those audits so far. Again, if there are individual examples, I genuinely wish to hear about them. It is in my interest because I will knock on their doors and tell them to get their act together or else payments. We audit it. It is one of the range of services. They are meant to provide training on interview techniques, how to write a CV and to assist people in preparing the plan so it is not just left to the person to figure it out.
Catherine Murphy (Kildare North, Social Democrats)
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I will refer back to the witness on it because I am hearing about very different experiences from what the witness is saying today.
Catherine Murphy (Kildare North, Social Democrats)
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I will refer back to the witness with some details.
Mr. John McKeon:
On the employment outcomes, the employment targets were set. When we went to tender we looked at the progression outcomes for people who are long-term unemployed in terms of employment outcomes in the next 12 months. We set a minimum target of exceeding that by 60%. That is the providers' employment target and they are paid if they hit that target in respect of each person. Our prices are reduced as employment grows. Obviously it gets easier to hit the target as employment is growing in the economy, so our prices are automatically reduced. We have reduced them as the economy has recovered.
Catherine Murphy (Kildare North, Social Democrats)
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I received replies to parliamentary questions relating to the number of people on a welfare payment who had a penalty applied in each of the years from 2012 to 2016. It has been growing. In 2012, when a much larger number of people were getting a welfare payment, it was 1,500 and in 2016 it was 10,000. Does JobPath play a role in that? In the first number of weeks there is a 44% reduction-----
Catherine Murphy (Kildare North, Social Democrats)
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-----and there can be a nine weeks scenario where there is a full loss of social welfare payment. How does the witness account for that? Is that counted in the Department's figures for claims that are fraud, administrative error or whatever?
Catherine Murphy (Kildare North, Social Democrats)
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Who prompts the decision?
Mr. John McKeon:
It can be local employment services, a community employment scheme, the Department or JobPath. We get a report that somebody is not co-operating in the activation process. For natural justice reasons we have a minimum of two steps before we implement a penalty. We will write to the person and call the person in. Then we will call him or her in again and say, "We have heard this and we want to hear your side of the story". If we determine the person is not co-operating we will tell the person to co-operate. If the person does not co-operate we will call the person in a second time. It is only after the second time that a penalty is applied.
Catherine Murphy (Kildare North, Social Democrats)
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Is there any financial advantage for either of these companies in prompting a discontinuance?
Mr. John McKeon:
There is none whatsoever. With regard to the absolute number of penalties, it has grown over the years. The main reason for that, I believe, is that they were really only introduced in 2012 and it has taken our officers time to get up to speed and to understand this is an option that is open to them. In fact, it is more than open to them, it is something they should be doing. That always takes time. At any point in time we have approximately 1,600 people on a penalty rate of payment. That is 0.1% of everybody who could be penalised, so it is a low rate. The reason I say this is that I sometimes get representations that people are afraid that we are employing penalty rates. For example, people would have seen the film, "I, Daniel Blake", and they think we have the same process as the United Kingdom has. We do not.
In the United Kingdom if a person fails to turn up once to sign on, he or she is penalised. We do not do that here. As I outlined in my opening remarks, as we are very conscious of people's vulnerability, we offer a double chance to avoid a penalty.
Catherine Murphy (Kildare North, Social Democrats)
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On disability payments and medical evidence based claims, I agree with Deputy Marc MacSharry that a lot is done well in that regard, but there are exceptions which generally are the cases brought to our offices. When I am approached by a person seeking a domiciliary care payment, my first response is that he or she should expect to be refused in the first instance and then receive it on appeal because that has been my experience. Reference was made to the high number of administrative errors. What number of applications are refused in the first instance such that the time spent on that process could be better used? To qualify for a domiciliary care payment, a person is required to provide a significant amount of evidence. I have seen very extreme cases in which the applicants were were refused. In the case of an application by a person whose condition is not going to improve, why is there a need to continuously review the application? In other words, if a person has a condition such as Down's syndrome, spina bifida or is wheelchair bound, on what basis is the view adopted that the condition will improve? Why is it not just accepted that it will not? It does not make sense to me that the Department engages in hounding such a person.
On claims for invalidity pension, I have been told by a number of people that they have been told by the Department that while they might not be able to work as a painter-decorator and so on, they are capable of answering the telephone. I understand people can vary in what they do during their lives, but one of the qualifying criteria for receipt of invalidity pension is that the condition must be existing for at least 12 months. I do not understand the basis on which the continuous review rule applies in extreme cases and how it makes sense from the point of view of the time spent in administering the process.
Mr. John McKeon:
On the invalidity pension issue, our responsibility is to apply the conditions set down in the legislation which states a person must be permanently incapable of doing any work. That is the criterion. It is determined whether the person will be permanently incapable of doing any work for 12 months. That is what we are obliged to do. I accept that a person who is a painter-decorator might no longer be able to do that work because of a lung problem, but there would be ten other jobs they could do and thus they would not be entitled to receive invalidity pension. That seems to be unfair, but that is the law and we have to apply it. It would be a policy issue if it was to be changed.
Our policy is not to call people in for a review if they have a condition which means that they will be incapable of work or if they require long-term care. If there are instances in which that has happened, the Deputy might let us know about them. Sometimes subjective judgments are made. We have over 30 doctors qualified in the field of occupational medicine and so on who carry out these assessments.
Catherine Murphy (Kildare North, Social Democrats)
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Am I correct in saying they are not always constant?
Mr. John McKeon:
There is some movement of doctors, but we have increased the number from less than 20 to over 30 such that the process is now more stable than it was. If a person with Down's syndrome was refused invalidity pension, that would concern me. If, for example, a person has asperger's syndrome or autism at a young age and at some point requires substantial care, a claim for domiciliary care allowance will be awarded, but with proper education and other supports, he or she can improve such that by the time he or she reaches the age of 16 years, he or she might no longer require such support. Although it may appear odd, some cases are marked for review, but we try to take a careful approach to them as we are aware of the stress reviews impose on parents. As mentioned in the Comptroller and Auditor General's report, the Minister asked us to stop carrying out reviews in DCA cases and set up an expert group with a number of stakeholders to see how the process could be improved. We have done that. I will ask my colleague, Ms Faughnan, to comment further on the matter.
Ms Helen Faughnan:
Applications under most of these schemes are processed in Longford, but we work very closely with the chief medical officer, Dr. Dev Singh, who informs us on our review policy. We also work closely with many of the NGO groups. Good work has been done in trying to communicate to parents and guardians and those claiming payments the information they need to provide for us.
Mr. McKeon mentioned the domiciliary care allowance. Over 75% of applications, a high percentage, for the allowance are awarded on first claim. This percentage is due to staff experience in decision-making within the Department and also to the work of the domiciliary care allowance implementation group which works with Family Carers' Ireland, Autism Ireland, DCA Warriors, etc. to gain a better understanding. The claim form was redesigned in order that parents and guardians would be able to specify accurately the level of care needed. This helps the deciding officer in the making of a claim.
As mentioned by Mr. McKeon, all of our medical assessors are fully qualified medical practitioners. Many of them possess specialised qualifications in fields such as general practice, psychiatry, occupational health, child health, etc. They have briefed some of our deciding officers to give them a better understanding of the nature of the cases presented to us for decision on a claim. We are looking at three schemes, the first of which is the invalidity pension scheme. In practice, most of the people who claim this pension payment are older. They are generally 50 years of age or older and have received the more severe diagnoses. The second scheme is the disability allowance scheme under which the allowance can be claimed at the age of 16 years. We do have younger customers with common conditions which, in some instances, with medical intervention, can improve over time.
Seán Fleming (Laois, Fianna Fail)
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As we have been here for three hours, I suggest we take a five-minute sos. Is that agreed? Agreed.
Seán Fleming (Laois, Fianna Fail)
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We will resume our discussion with the Department of Employment Affairs and Social Protection. Did Ms Faughnan wish to complete an answer?
Ms Helen Faughnan:
I wish to clarify a point for Deputy Murphy. In recent years, the Department has improved in terms of our classification. We use the international classification of diseases, ICD-10, codes. The codes help us to set out our review policy for cases such as the one raised. We will not call for review someone with a disease or serious illness that is permanent. The codes help us to stratify that.
Earlier, we discussed medical evidence coming in to the Department. In many cases carers, people claiming disability allowance, parents or guardians claim domiciliary care allowance. Often there is a delay in them accessing either consultant or occupational therapist reports. That can form part of the process. I thought it was worth clarifying those points.
Seán Fleming (Laois, Fianna Fail)
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That is appreciated.
Catherine Connolly (Galway West, Independent)
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Cuirim fáilte roimh na finnéithe. Déanaim comhghairdeas leo. Don chéad uair riamh tá cothromaíocht inscne i gceist maidir le mná a bheith ós ár gcomhair. Tá éacht déanta acu. I was impressed with Mr. McKeon's opening statement. I was about to congratulate him until he started to talk about Turas Nua and Seetec. Mr. McKeon's opening statement is to be welcomed. He put social welfare in context. The Department has the largest budget at more than €19 billion. Mr. McKeon said that budget will affect every person one way or another and that all of us will benefit from that budget at some stage in our lives, whether through pensions or whatever. Is that not right?
Catherine Connolly (Galway West, Independent)
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One point that jumps out at me in looking at all of this is that the so-called free market is not free at all. Government and taxpayers' money backs up the free market all the time in helping employers to employ people and so on. Is that not right? A substantial amount of the budget goes to the so-called free market. Certainly, it is not free and it is certainly functioning on the basis of taxpayers' money. Is that not right?
Mr. John McKeon:
I do not think anyone could find an economist who would argue with Deputy Connolly that the free market is, in that sense, a misnomer. There is a cost, whether it relates to IDA Ireland providing grants, tax reliefs or the Department providing employment support. These are areas where the State steps in. If the market were completely free or if we let it be completely free, we would be back with-----
Catherine Connolly (Galway West, Independent)
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It is utterly free in the area of housing and the rent supplement. I will come back to that presently. It is utterly free in the narrative of each Government. However, the reality is that the market could not function without taxpayers' money one way or another in terms of low wages, where the Government steps in and so on. Is that not right? It is important to put it in perspective.
Catherine Connolly (Galway West, Independent)
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I do not know whether society is based on the free market but the free market has been imposed on society at a great cost. Eight people are dead since August. We are going to start now. Those are my compliments.
I thank Mr. McKeon for the contact number for Deputies. My experience and that of my office is not that we get our own way but that we are treated with politeness, speed and professionalism, and I thank Mr. McKeon for that. I wish to say as much publicly.
JobPath has been done to death here today, and rightly so. Mr. McKeon referenced "I, Daniel Blake". Certainly, I think we are in danger of following the path that has been so poignantly shown in that film. The two companies that the Department has chosen certainly have put us in danger in that regard.
I am going to leave the commercially sensitive and cost aspects of JobPath for the moment. I wish to focus on the effect on community employment schemes. We had Údarás na Gaeltachta ós ár gcomhair Dé Máirt. Chuir sé in iúl dúinn go poiblí go bhfuil deacracht ann ó thaobh na scéimeanna seo agus community employment schemes. Údarás na Gaeltachta confirmed to us that it was in the process of writing to the Department in respect of the impact of Turas Nua and Seetec. It seems everyone employs these organisations in the west and there is a direct impact on community employment. I have not heard that from Mr. McKeon today. That is my experience and the experience of Údarás na Gaeltachta. The co-operative movement has made many presentations to us highlighting that the authority cannot get people for its schemes. Udárás schemes are being seriously impacted. That is my first observation and question.
Mr. John McKeon:
I will refer back to my earlier point and, hopefully, say it more elegantly. Currently, approximately 22,000 people are on community employment schemes throughout the country. In 2012, which was the height of the recession, we had 21,000 on such schemes. Almost 1,000 more people are on community employment schemes now than in 2012.
JobPath has been introduced since then. When one looks at it at an aggregate level, there is no apparent impact.
Catherine Connolly (Galway West, Independent)
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I will stop the witness there because I have heard that. I have heard Mr. McKeon say that and I do not want it repeated as a stock answer. I know that the Department of Employment Affairs and Social Protection has a view. I am guided by what Údarás na Gaeltachta has told us publically, by our experience on the ground and by the advice of the co-operative movement, which visited the Dáil recently and told us about the serious difficulties that they are experiencing. I am asking Mr. McKeon whether his Department carried out a review. The witness is quite familiar with the fact that those organisations are unhappy with the situation.
Mr. John McKeon:
We have had a look at it and at a number of individual cases. I cannot recall the one concerning Údarás na Gaeltachta but perhaps we examined that as well. In all of those cases, there were people available who were either on the live register or long-term unemployed and who could have been referred to the community employment base. When we tease it out, the difficulty is that we probably need to have a different model of engagement between the people on our long-term unemployed register and the community employment companies in order to get more of the people who are not currently aware of or applying for community employment schemes to apply.
One can contrast it with Tús, for example, which is a very similar scheme. However, the difference with Tús is that people are selected by the Department and referred to community employment. Conversely, community employment sponsors advertise their positions and then wait for applicants. This falls to the Department and it is something at which we are looking. We need to be a little bit more active in talking to the 40,000 people who are long-term unemployed and not on any other schemes at the moment and telling them that the vacancies are there and encouraging them to apply.
There is another difficulty, which is a little bit difficult to say because it runs against my own personal grain a bit but, nevertheless, I think there is evidence for it. For community employment businesses, or certainly the one or two cases I looked at when I scratched beneath the surface, the problem was not so much that they could not get people. Rather, they could not get the right calibre of person or the exact person that they wanted in the same way they could in 2012. I am just saying in the one or two cases I am speaking of-----
Catherine Connolly (Galway West, Independent)
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Mr. McKeon can speak about one or two cases but what I am highlighting is not my personal view. I am highlighting the views of the co-operative movement that came before the committee and I am highlighting the view of Údarás na Gaeltachta. At the very least, I ask that the Department sit down with these organisations and ask them what is going on and what difficulties they are experiencing.
Catherine Connolly (Galway West, Independent)
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Mr. McKeon's Department has not done this. In his opening statement, he made a point that I agree with and for which I respect him. He said the Department "recognise[d] the value of non-market activity". He gave examples such as caring and home-making. I would give the example of these schemes and the community employment schemes. This society could not function without it. The reason I stopped complimenting Mr. McKeon was that he went on to talk about work as being very important, while not mentioning this as work. He spoke about this as a preparation for work. In my opinion, the community employment schemes involve absolutely invaluable work. All over this country, co-operatives are functioning because of that, although just about. I ask the witness to look at that again and to sit with the various organisations. We have had the privilege to do so on Comhchoiste na Gaeilge, na Gaeltachta agus na nOileán. Thaistil muid tríd an dtír agus is é an rud i gcónaí ná go bhfuil easpa foirne ann de bharr SeeTec agus Turas Nua. They are telling us. There is a disconnect, a cognitive dissonance or something going on here. I am going to park the matter and ask Mr. McKeon to come back to those concerns.
Catherine Connolly (Galway West, Independent)
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I understand that it is the process of writing to the Department.
Catherine Connolly (Galway West, Independent)
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I refer to the co-operatives also. I am using the English word. Comharchumainn agus eagraíochtaí atá pobalbhunaithe. Bhí Cathy Ní Ghoill anseo faoi dhó ag cur in iúl dúinn chomh deacair agus atá sé.
Catherine Connolly (Galway West, Independent)
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That was not apparent.
Mr. John McKeon:
To ensure that Deputy Connolly is aware, I note that the Department has done a review of community employment recently. With Government approval, we have decided to designate two types of community employment places, namely, those intended for activation, the primary purpose of which is to help somebody move on into employment, and those aimed at social inclusion. The primary purpose of the latter is to give occupational activity to the service user, while providing a valuable local service. We are looking at it through that lens.
Catherine Connolly (Galway West, Independent)
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Is that review available to us? I would love to look at that review .
Catherine Connolly (Galway West, Independent)
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I thank the Ms Stack. Before I move off this topic, I note that it is also our experience that one has to go with Turas Nua or Seetec. One does not have a choice. Mr. McKeon indicates that there is a choice, as do replies to parliamentary questions. We are being told that one simply does not have a choice. If a person is called by either of these organisations, they have to take up the offer. They cannot go on anything. Again, I am not going to waste my time because the witnesses have told me that this is not true or accurate. However, that has been our experience.
Mr. John McKeon:
I want to clarify that. If a person is selected for referral to JobPath provider, just as if they are selected for Tús, they are required to participate. There is an exception made where a person has got a community employment offer during the same period. They can then choose between the two. However, somebody who has not received an offer is required to attend.
Catherine Connolly (Galway West, Independent)
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They are required to attend unless they have an offer in their hands to go on the other schemes.
Catherine Connolly (Galway West, Independent)
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I saw that in the reply that came back. I am going to park that issue. I look forward to reading the review, and I look forward to you taking up these difficulties with the relevant organisations.
I will now deal with the issue of home help. Deputy MacSharry raised the issue of carer's allowance. I welcome that the news that the Department of Public Expenditure and Reform is now going to examine that. It seems the most-----
Catherine Connolly (Galway West, Independent)
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Ms McGuckin has made that clear. I refer to figures on the carer's allowance on page 29 of the Comptroller and Auditor General's report. The allowance relates to 65,740 people and the cost involved is €653 million. Obviously, we cannot begin to put a price on the value of what carers are doing at home, most of them at breaking point, out of love for the person they are caring for. On the other hand, we have the nursing homes support scheme, the fair deal scheme, which I call the "unfair deal" scheme, but let us stick to the terminology. The fair deal scheme covers approximately 23,000 people and the cost for it this year is €970 million. We have now reached a cost of €1 billion. It obviously makes sense for the Department of Public Expenditure and Reform to immediately and urgently look at this matter. Some 23,000 people are in care at a cost of almost €1 billion, and then 65,740 people are struggling, under a pittance, and saving the State a fortune. It is extraordinary that it takes the Committee of Public Accounts to call attention to this and, even then, I understand that the witnesses are restricted and have given a very nuanced answer. Does it not make sense for this to be the first thing to look at, where value for money is concerned?
Catherine Connolly (Galway West, Independent)
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I will address the issue of rent supplement. I ask the witnesses to clarify rent supplement for me. Rent supplement was always administered by the Department of Social Welfare, is that correct? The process is now slowly changing to the housing assistance payment, HAP. What is the total figure for all of the assistance for rent, combining rent supplement, the rental accommodation scheme, RAS, and HAP?
Catherine Connolly (Galway West, Independent)
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That is the figure for 2017?
Catherine Connolly (Galway West, Independent)
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The figure is €540 million?
Ms Helen Faughnan:
It combines to a total of €540 million. Rent supplement accounts for €253 million and there are currently in the region of 35,000 recipients. HAP accounts for €153 million and is currently paid to over 30,000 recipients. RAS accounts for €134 million and there are 34,300 recipients.
Catherine Connolly (Galway West, Independent)
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Could the witness repeat the last figure?
Catherine Connolly (Galway West, Independent)
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Does that equate to 99,000 households?
Catherine Connolly (Galway West, Independent)
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Obviously it is just one payment per household.
Catherine Connolly (Galway West, Independent)
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The household could comprise one person or ten people, however.
Catherine Connolly (Galway West, Independent)
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So 99,000 people are in receipt of some payment under the €540 million for this year alone.
Catherine Connolly (Galway West, Independent)
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That is some free market.
Catherine Connolly (Galway West, Independent)
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Will the witness say that again?
Catherine Connolly (Galway West, Independent)
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So that is an increase.
Catherine Connolly (Galway West, Independent)
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Presumably that figure will continue to rise as it is Government policy that HAP is the way forward.
Catherine Connolly (Galway West, Independent)
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I have no problem with that support, but that percentage will now rise in a market in which there are no houses available. Is that not right? It is at 30% and it will continue to rise in a market in which no houses are available and when the construction of public housing is at an all-time low.
Catherine Connolly (Galway West, Independent)
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Therefore, €540 million is going directly into the private market.
Catherine Connolly (Galway West, Independent)
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And rising rents are a consequence of that.
Catherine Connolly (Galway West, Independent)
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One such provision is the 4% per year cap in the rent pressure zones. Galway is one of those zones. More and more tenants are coming into my office, and the offices of other members, who have received notices to quit under what are ostensibly notices for sale but there is not really a sale. They have no choice. If they fight and go to the authority in Dublin they will get no reference. They are caught in a crazy situation. That is all Government policy. I will move onto a few more things. What welfare officers or offices are in the Gaeltacht in Galway, the biggest Gaeltacht in the country? What services are provided in Irish by the Department?
Catherine Connolly (Galway West, Independent)
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I would love if Galway was classified as a Gaeltacht but it is not yet. It is a bilingual city. I was referring to the actual Gaeltacht.
Catherine Connolly (Galway West, Independent)
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My question to Mr. McKeon was: what offices are based in the Galway Gaeltacht, the largest Gaeltacht in the country? That was my question.
Catherine Connolly (Galway West, Independent)
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Clifden is not a Gaeltacht.
Catherine Connolly (Galway West, Independent)
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So the Department has no offices in the Gaeltacht?
Catherine Connolly (Galway West, Independent)
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This is a very important question-----
Catherine Connolly (Galway West, Independent)
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-----in terms of the Gaeltacht and our obligations under the Constitution, not to mention various pieces of legislation. How many branches or offices - whatever the correct terminology is - were there in the Gaeltacht before this?
Catherine Connolly (Galway West, Independent)
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I understood that there were welfare officers or some kind of community officers - whatever the correct title is.
Mr. John McKeon:
There would be community employment officers or community welfare officers. They would have a number of satellite clinics in the area. We have reduced the number around the country generally. I know it will sound contradictory but we actually did that in order to improve service. We had 900 satellite offices which cost quite a lot of money. We have now reduced that number to approximately 200.
Catherine Connolly (Galway West, Independent)
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On that issue, can Mr. McKeon come back to me about what services atá an Roinn ag soláthar trí Ghaeilge sa Ghaeltacht is mó sa tír agus sna Gaeltachtaí eile?
Catherine Connolly (Galway West, Independent)
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On cost effectiveness, we have a serious traffic problem in Galway. The policy of the Department and those of other parts of Government are drawing more and more people isteach go dtí an cathair. That is not sustainable. When looking at costs, the Department might look at the costs which are not factored in such as extra traffic on the road, serious congestion, climate change implications and so on, not to mention the language issue. Will Mr. McKeon come back to me with a letter setting out what services the Department provides in Irish?
Catherine Connolly (Galway West, Independent)
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It should also outline what changes have been made in the last few years.
Catherine Connolly (Galway West, Independent)
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Will they be available trí Ghaeilge?
Catherine Connolly (Galway West, Independent)
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Okay. Breathnóidh mé ar sin. To return to fraud and error, I think this issue has been clarified and Mr. McKeon has been very fair. I find myself disagreeing with the Comptroller and Auditor General's report on reviews and medical reviews to a certain extent. This is the first time I have disagreed with him in the nearly two years I have been on this committee. I am more on Mr. McKeon's side in respect of what he has said on various matters, and on domiciliary care in particular. The area of fraud and error has been teased out by my colleagues. Is it fair to say that error, rather than fraud, represents the higher percentage of overpayments?
Catherine Connolly (Galway West, Independent)
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I will repeat that because we have to have balance with what was put on the buses. It is not fraud, but error.
Catherine Connolly (Galway West, Independent)
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Good. Error did not appear on the buses, did it?
Catherine Connolly (Galway West, Independent)
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Good. Why was that?
Catherine Connolly (Galway West, Independent)
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No. My question was about why error did not appear on the buses.
Catherine Connolly (Galway West, Independent)
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Who gave the instructions to that marketing company?
Catherine Connolly (Galway West, Independent)
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It was the Department. Was the Minister involved?
Catherine Connolly (Galway West, Independent)
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Okay lovely. When the Department was doing this did anyone tell the Minister that fraud was not the biggest issue, but error?
Catherine Connolly (Galway West, Independent)
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No. Did the witness say that to the Minister?
Catherine Connolly (Galway West, Independent)
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Did the witness tell the Minister that he should not run with this? Did he say that the Department had decided on it but had now realised that error was the bigger issue?
Catherine Connolly (Galway West, Independent)
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It undermined-----
Catherine Connolly (Galway West, Independent)
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I accept that and I will not trample Mr. McKeon. He has given an apology and I accept that, but it did the most terrible damage to his Department and the tremendous work it does. We have agreed that society could not function without its services and without taxpayers' money. It was damning. It reflects more on the Minister and the Government.
Catherine Connolly (Galway West, Independent)
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What is the percentage in respect of employer fraud?
Mr. John McKeon:
On employer fraud, the payments which we make to employers on the welfare side are predominantly made in respect of the wage subsidy scheme and the JobsPlus scheme. These are recruitment subsidies and are entirely contingent on the person being in employment. We have not detected any fraud on that side.
Catherine Connolly (Galway West, Independent)
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I thought there was a reference somewhere to employer payments.
Mr. John McKeon:
There is a number, which I will have to try to dig up, in respect of employers who have not properly registered staff or PRSI. It is a relatively low number. I will try to dig it up in my papers. The bigger proportion of issues we have with employers are on the redundancy and insolvency side, where a rebate is paid. That is the bigger issue with employers.
Catherine Connolly (Galway West, Independent)
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On domestic violence and letters being sent out, I raised this issue in the Dáil recently, as did other Deputies. There have been changes in that regard and there is a new policy. Will Mr. McKeon clarify the policy in light of the type of letters that were going out? I know the Minister has explained this in the Dáil. I will finish after this reply with the issue of domiciliary care.
Catherine Connolly (Galway West, Independent)
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There were six employers prosecuted. How much money was involved?
Catherine Connolly (Galway West, Independent)
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Lovely.
Catherine Connolly (Galway West, Independent)
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Good Lord, I hope there was a change in policy.
Mr. John McKeon:
No, there was an error made by an individual in applying the policy correctly. We have dealt with that. We are also working with the National Women's Council of Ireland to improve our communications and to ensure that we apply the policy correctly in future and that the scope for error will be diminished.
Catherine Connolly (Galway West, Independent)
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Is Mr. McKeon saying that one person sent out all of the letters?
Mr. John McKeon:
The letters are a separate issue. There are two issues. One was the issue of letters being sent out telling people that they needed to try to recover funds from a person who had maintenance obligations to their children. That is the case. That is the law. However, it is not the case that a person who is in a situation of domestic violence is required to contact his or her former partner to do so. The staff member who incorrectly told a victim of domestic abuse that she had to go and get this evidence did so in error. The staff member subsequently contacted the individual and apologised for the error.
Catherine Connolly (Galway West, Independent)
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I understand. I do not mean to individualise this. There was more than one letter. The Minister acknowledged that in the Dáil. I am asking Mr. McKeon to confirm. The Minister said that there was training in place for staff and that there would be ongoing training.
She also stated that the nature of the letter would be changed dramatically as a result of consultation. Is that correct?
Catherine Connolly (Galway West, Independent)
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When we reduce it to one person, we are ignoring what happened rather than learning from it.
Mr. John McKeon:
I know. I accept that there are two lessons, the first of which is the quality of our communications, which I mentioned. We are considering how to improve that with National Women's Council of Ireland. There was also the individual instance of error. I am sorry, but I meant that we were considering improvements with Women's Aid.
Catherine Connolly (Galway West, Independent)
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That is okay. The final question was on the domiciliary care allowance, a matter that Deputy Murphy also raised. From my experience on the ground, getting this allowance is impossible. Matters have improved but, given that we are discussing someone applying on behalf of his or her child, I imagine that the level of fraud is zilch. There was supposed to be a working review from 2013 onwards. The Comptroller and Auditor General seems to be saying that there should be medical reviews in respect of the allowance. I disagree, but I am no expert. Families applying for this allowance should be facilitated in every possible way if a medical assessment shows that it is needed. I am unsure as to whether further reviews are required. What are the witnesses' views on this and what happened from 2013 onwards with the implementation group that was established?
Ms Helen Faughnan:
To clarify, domiciliary care allowance is a payment made in respect of children who have a disability and care needs substantially in excess of another child of the same age and where the care needs are expected to last for at least a year. Currently, the award rate at the initial claim stage is----
Catherine Connolly (Galway West, Independent)
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One moment. The Comptroller and Auditor General's report reads: "Domiciliary Care Allowance (DCA) is payable to carers of children under 16 that have a severe disability that requires constant care and attention substantially in excess of that required by another child of the same age." Is the Comptroller and Auditor General's report wrong?
Catherine Connolly (Galway West, Independent)
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It is a "severe disability".
Catherine Connolly (Galway West, Independent)
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Okay.
Catherine Connolly (Galway West, Independent)
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Good. Is there a need for ongoing reviews? If it is a severe disability, it is a severe disability next year as well.
Ms Helen Faughnan:
In quite a number of the claims that are received, the child has a disability. That claim is considered in the round. In particular, focus is on the care supplied by the parent or guardian. That is what we have moved on in consultation with many of the representative groups, enabling the care provider to outline the care in detail. The carer keeps a care diary. This has allowed us to improve the quality of the decisions. More than 75% of applications are awarded at first claim stage. The qualifying age for the scheme used to be for a child aged two years and upwards. It is now from once the child is born.
There could be a premature child who needs a substantial amount of care but whose condition improves over time. As such, there are cases that should be subject to review. With the implementation group, we are working out a process that is fair and consistent. The reviews were suspended because a number of judicial review cases had been taken against the Department. In effect, we were putting our efforts and energies into processing claims as quickly as possible.
Catherine Connolly (Galway West, Independent)
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Has the number of cases reduced?
Catherine Connolly (Galway West, Independent)
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The judicial reviews.
Catherine Connolly (Galway West, Independent)
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I beg Ms Faughnan's pardon. She stated that there were a number of judicial review cases.
Catherine Connolly (Galway West, Independent)
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From what figure have they reduced?
Ms Helen Faughnan:
Given the nature of the judicial reviews, the Department was required to amend its processing. We had to give a detailed breakdown of the decision-making process to the applicant. In addition, the medical assessors had to give a detailed breakdown of their reasoned opinions. This took extra time and caused a delay in processing the applications.
Catherine Connolly (Galway West, Independent)
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I am discussing something that is essential for a family to survive. Ms Faughnan has clarified that 75% of applications are awarded at the first claim stage and that it is awardable at an earlier age, which is welcome. However, I do not welcome the fact that an application is taking a long time. The working group was set up in 2013, which was four years ago. I apologise, I have taken enough time.
Catherine Connolly (Galway West, Independent)
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Have they?
Catherine Connolly (Galway West, Independent)
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Good.
Mr. John McKeon:
The policy recommendations and the reviews have been held up pending the High Court cases because we need to get clarity from those. As Ms Faughnan mentioned, we were also hit by an influx of new claims. We prioritised clearing those. We now have the claims under control, with the number pending decreasing from more than 3,000 to approximately 1,500. In the coming months, we will return to examining policy and the review process with the implementation group.
Catherine Connolly (Galway West, Independent)
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I thank the witnesses.
Seán Fleming (Laois, Fianna Fail)
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I have a few questions, but I will let Deputy Cullinane in for a quick moment.
David Cullinane (Waterford, Sinn Fein)
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I will not take ten minutes, only three or four. The caveat to my questions is that the Secretary General and his colleagues have been exemplary in their presentation of the accounts and answering of questions. That is worth noting because it is not always the case. I am happy to put it on the record.
When I put my questions on JobPath, I understand that Mr. McKeon was not refusing to answer. I accept in good faith that he did not believe he was in a position to answer because of issues of commercial sensitivity. However, I have a concern about one of the questions that I put, in that the answer did not make sense to me. I will try to talk Mr. McKeon through why that is the case. For the purposes of clarity, I want him to know that my understanding is correct.
Between July 2015 and the end of September 2017, €71.2 million was spent funding the two organisations that enable JobPath. Is that not the correct figure?
David Cullinane (Waterford, Sinn Fein)
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The two organisations are Turas Nua and Seetec.
David Cullinane (Waterford, Sinn Fein)
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The total number of initial payments was 131,986, or something like that.
David Cullinane (Waterford, Sinn Fein)
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These are the figures that I received from a parliamentary question, so I am assuming that they are correct.
David Cullinane (Waterford, Sinn Fein)
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If €71.2 million had been paid out to the two organisations, I asked whether Mr. McKeon could give me a breakdown of how much Turas Nua and Seetec got, but he said that that would be difficult to do for reasons of commercial sensitivity. The problem is that each of these organisations can easily work out what the other got. Turas Nua and Seetec will now be aware of the €71.2 million figure. They will also be aware of how many people came through their organisations. Each can divide its part of the €71.2 million by the X number that came through its organisation to figure out what the other organisation got. The answer does not make sense because the organisations know the amount. While I do not know, Turas Nua knows how much it got and how many people passed through its programme. Seetec knows how much it got and how many people passed through its programme. Given that the figures are then obvious, there is no reason for Mr. McKeon not to give us the breakdown. I am only asking for information that they already know. Turas Nua knows how much it got of the overall figure, so Mr. McKeon's statement that he cannot give us the breakdown does not stand up.
In terms of basic accountability, it is wrong that we cannot get the figure. It has no impact on commercial sensitivity. I would not put Mr. McKeon in a position of impacting that sensitivity. Notwithstanding the fact that we have outsourcing so that walls can be erected in order to ensure that we do not get the types of response that we should, and leaving aside my personal concerns about the process, will Mr. McKeon give us the breakdown? What I have said is logical and there is no reason for him not to do so.
Seán Fleming (Laois, Fianna Fail)
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Mr. McKeon is going to supply information.
Mr. John McKeon:
Yes, and I will consider the Deputy's point, but I wish to make two of my own. I do not know whether I am responding to his question on the pricing structure or Deputy Murphy's, but different prices are paid depending on whether the client is long-term unemployed by one year, two years, three years, etc. Different prices are paid in terms of discounts that will be applied for non-performance, penalties that the Department will levy and so on. Although the total is known, I would find it challenging, even though I know the figures, to reverse engineer from the public data back to the price.
David Cullinane (Waterford, Sinn Fein)
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That reinforces why Mr. McKeon can give us the figures.
David Cullinane (Waterford, Sinn Fein)
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It reinforces it because it is very difficult. All I am looking for is the gross figure. I am not looking for a detailed breakdown. I ask for the gross figure for both organisations.
Mr. John McKeon:
I will consider what Deputy Cullinane said and we will do the best we can. I referenced the two current providers in the market as an example of why we could not do it. In response to Deputy Catherine Murphy, I clarified that nine companies tendered and under procurement rules the companies which were successful bid in a closed tender. They do not want other people to figure out their prices because they are competing against them in other markets. We may or may not run a tender again in 2021 when the contract expires. Do we want the other seven tenderers to know what the current company is paying? They are all the issues we have to consider.
Seán Fleming (Laois, Fianna Fail)
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I have a few questions I want to put as we draw to a conclusion. I thank the witnesses for the document they sent to us, entitled "Supplementary Welfare Allowance 2016 Fraud & Error Survey". It seems to be a case of "Here we go again".
I want Mr. McKeon to define what he calls fraud. I would have thought fraud was a criminal offence, but the only person who can call it that is a judge. He has used phrases which no public servant has the right to use. He referred to customer fraud, looking at a document and customer error. He gave us a definition of the Act and there are three subsections relating to fraud stating that it has to be wilful. For Mr. McKeon to come to a conclusion that fraud has taken place, he has to be in the mind of the person concerned to know whether what happened was wilful. He used the word earlier and we know it is in the system.
The only person who can come to a conclusion in regard to the establishment of fraud which is criminal is a judge. I respectfully suggest that nobody in the Department has the right to use that phrase. They might believe something is a suspected fraud. As a layman, I believe only a judge can decide whether something is fraud.
Reference was made to error. We will separate the issues. It gives everything a bad name. I want to compliment the tone of Mr. McKeon's opening remark and his understanding for the people he deals with on an ongoing basis in terms of making sure they are all right. It is possible that 2% of people are making claims for payments to which they are not fully entitled. This is a result of a variety of issues, including fraud, error on the part of the Department or a death following which it takes a number of weeks for a payment to the person to cease in the system. There is usually a clawback against the estate of the deceased. Some errors may take place because people did not telephone the Department on the day their mother died to advise it to stop payment. These things can take time.
I want Mr. McKeon to talk to me about the word "fraud". It is great for some people to categorise other people in receipt of social welfare as engaging in fraud. That probably does happen sometimes. I ask Mr. McKeon to talk to me about his use of the word "fraud" and what I would call suspected fraud. The relevant Act referred to contains the term "wilful". How can one read people's minds, come to a conclusion and categorise what has happened as fraud? I would like Mr. McKeon to change his language. I am upfront. I would like the language throughout the system to change.
Seán Fleming (Laois, Fianna Fail)
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That is not in the report.
Seán Fleming (Laois, Fianna Fail)
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The report published on 24 November 2017 is all about customer fraud. I find the document referring to the supplementary welfare allowance more worrying. I will not read the name of the document because I do not like the title which refers to fraud. We have talked about the definitions used in compiling the report. The document states that the definitions have been aligned with the fraud and error methodology developed by the UK Department of Work and Pensions with oversight from the UK National Audit Office, as much as is consistent with the different legal frameworks, customs and practices in the two jurisdictions.
I hate to say which Minister, Department or party in England came up with these definitions, but that information seems to be used as a reference point and there is an attempt to align that with the wording in our legislation. Why did the person who wrote the report feel the need to refer to definitions from the UK's Department of Work and Pensions?
Mr. John McKeon:
We agree that "suspected fraud" is a better description. As I said, that is the language we have started using in the Department. It has not gotten through to all sections. The fraud and error reports are technical statistical reports, and use language which has been in use for a long time and which is of an international standard, not just for the UK but other administrations, which enables comparisons and so on to be done. Through definitions and statistics there is always metadata. Defining something in a particular way is helpful.
Deputy Connolly spoke about the free market and the idea of something being free being a misnomer. In this case, she is absolutely right. Fraud is not an accurate term to use to describe what we are reporting because there has been no finding of fraud in a court of justice. Nevertheless, it is suspected fraud and in future we will take account of the observations and make sure that we align our language correctly. The figures will not change, but the title may well change.
Seán Fleming (Laois, Fianna Fail)
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Okay. I think Mr. McKeon takes the point that these things are suspected fraud until such time as they are proven.
I refer to page 234 of the report. Mr. McKeon does not need to go into it in detail. There are 131,000 people out of 191,000 people who owe some money, and 36,000 owe less than €100. Will the Department of Public Expenditure and Reform agree to some common sense and not waste everybody's time? Somebody might have over-claimed one day four years ago. If the amounts are under €100, why are we wasting valuable resources dealing with the issue?
There are 69,000 people who owe amounts between €100 and €500. That is probably due to a week between changing jobs or something like that, but they are listed under a heading. Another 27,000 people owe amounts under €1,000. I am not suggesting the Department go soft on that. Perhaps I should not use the term "trivial", but I could not understand how we spent money, time and resources on dealing with these types of issues. I bet if I asked for the ages of some of those cases, I would be told some were over ten years old. We are the Committee of Public Accounts and we do not like writing off taxpayers' money, but when we get figures we want them to have practical meaning. I do not think counting some of the cases as debts which are collectable is correct. I ask the Department to take that on board. I know the witnesses will probably say they are coming to the Department of Public Expenditure and Reform with further proposals on that during the course of the year. I hope common sense will prevail.
I tabled a parliamentary question on a matter with which Mr. McKeon might be familiar. On 18 October, I asked for the details of the social insurance fund by scheme. I was told there were 30,731 cases relating to jobseeker's benefit, the outstanding debt was €23 million and the average debt was €754. Obviously, some of that relates to people who claimed an extra day or two here and there or whatever. That figure seems quite low.
Mr. McKeon probably has the response to the parliamentary question because I am sure he cleared it. I do not understand why the highest average debt per scheme is deserted wives' benefit, at €18,000 according to the reply. In the case of the contributory guardian payment the average debt is €9,000.
Will Mr. McKeon comment on the average debt figure under the death benefit scheme, which seems to be very high? I am not familiar with it but I understand there are only a small number of cases under the scheme.
Seán Fleming (Laois, Fianna Fail)
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The point I am making is that the average debts, as set out, are building up to create a bad impression. The reality, however, is that of the 190,000 people who owe the Department money, most do not owe very much at all.
Another issue of concern to me is that the application forms which go out from the Department, for carer's benefit or allowance, disability benefit and so on, are heavily geared to people with a physical disability. There is only one reference to mental health on the forms but lots of questions about whether the applicant can bend, walk up and down the stairs, lift objects and so on. In this day and age, the documentation is not adequately reflective of mental health issues. Of all the people in the country dealing with health difficulties, a certain number will have mental rather than physical challenges. It is very difficult for such people, including those who may potentially be suicidal, to set out their case properly via the existing forms. In the case of carer's benefit, for example, a person might look physically okay and can walk up and down the stairs but will need constant watching in case he or she walks out the door and in front of a car or tries to jump through a top window. The forms do not reflect the space mental health issues occupy in people's lives, with only one relevant line out of 15 or 20 categories. The Department seems to be talking to its service users all the time. Is there any feedback from them on this issue? Many of the people coming to me seeking help are suffering from serious depression and other mental health problems. It is not easy for those people to fill out the forms in a way that reflects their difficulties.
Mr. John McKeon:
The Chairman asked about write-offs. A paper is being prepared by Ms Stack and our control staff which will include a recommended approach to structured write-offs. We have not had such write-offs in the past two or three years. I will be sending that document to the Department of Public Expenditure and Reform. The Chairman's comments may well be helpful to that process and I thank him for them.
The Chairman is correct about the average value of debts not necessarily being reflective of what is owed in most cases. In the case of the one-parent family payment, for instance, the average sum owed in instances of suspected fraud identified this year was €3,300. It is the case that a handful of egregious cases may skew the average. There was one listing for more than €200,000 in the Comptroller and Auditor General's report. I agree that we need to be conscious that such instances can affect the averages.
On the review of forms, we have already conducted a review in the case of carer's allowance and domiciliary care allowance. As we move on to reviewing the disability allowance form, we will take the Chairman's suggestions into account.
Seán Fleming (Laois, Fianna Fail)
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I am a lay person, not a medical expert, but Oireachtas Members are stakeholders in this in our own way. We will all be dealing with such cases in our constituencies tomorrow. In fairness, the service we receive is always courteous and prompt.
On the appeals process, the first stage is that the deciding officer makes a decision on an application. The applicant then has 21 days to submit an appeal, which will be undertaken not by the appeals office but by a deciding officer within the Department. What percentage of decisions are overturned after this internal review process? I always advise people to apply for the review as they are more likely to get a favourable outcome quickly by that method, whereas submitting an appeal to D'Olier Street will see them waiting months for a decision.
Seán Fleming (Laois, Fianna Fail)
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I am referring to the outcome of the internal departmental reviews.
Ms Joan Gordon:
There seems to be a degree of confusion here. The 21 days to which the Chairman referred relates to the appeal period. As set out in the relevant statutory instrument, a person who receives a negative decision on an application for payment has a 21-day period in which to appeal. Once the appeal is registered in our office, we are obliged under the same regulations to ask the Department to review the appeal contentions and, if necessary, revise the decision based on those contentions. In the case of the medical-based schemes, there is sometimes new, additional medical evidence which allows the Department to review and revise the initial decision. Up to the end of October 2017, some 40% of the appeal decisions that had a favourable outcome were attributable to deciding officers revising their original decision on review.
Seán Fleming (Laois, Fianna Fail)
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This is very important information. Ms Gordon is saying that of the appeals which go to her office and result in a favourable outcome, which is some 60% of all appeals received by the office, 40% of that 60% - which amounts to approximately 25% of the total - are revised by the original deciding officer, perhaps having had the benefit of a more recent medical report.
Seán Fleming (Laois, Fianna Fail)
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Where a person submits a more up-to-date consultant's report, which the deciding officer did not have when making the original decision, does the appeals office send that report to the deciding officer?
Ms Joan Gordon:
That applies in the case of the medical-based schemes. A person will submit an appeal to our office in order to meet the 21-day deadline but will not necessarily have all the additional medical evidence to back up his or her case at that point. We send the appeal contentions back to the Department, as we are obliged to do under legislation. Those contentions will, at that point, include the new medical evidence.
Seán Fleming (Laois, Fianna Fail)
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To put it another way, of the 16,000 appeals that went into Ms Gordon's office, the original decision was upheld in 40% of cases and 25% of them were revised by the Department.
Seán Fleming (Laois, Fianna Fail)
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Ms Gordon is saying that of the 100% of applications submitted, 35% were given a favourable response by her office. People are not aware of this. We do hear of decisions being changed by deciding officers in the Department, but the tendency has been to give 100% of the credit for favourable appeal outcomes to the appeals office. However, Ms Gordon has indicated that in 40% of cases where the appeals office is getting the credit for giving a new decision, it is actually the deciding officers who are making the changes. As a rough guide, then, out of 100 cases that go in, 40 do not change, 25 are revised by the deciding officer and, in 35 cases, the appeals office gives a different decision from the one made by the Department. Is that correct?
Seán Fleming (Laois, Fianna Fail)
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That information is not being made clear. We hear about the 60% of cases where a change is made, but it is now clear that a significant portion of them are being done by the Department.
Seán Fleming (Laois, Fianna Fail)
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The information is not out there at all. I have seen examples in my constituency work, but I was not conscious of the significance of the portion of revised decisions that are taken within the Department rather than by the appeals office. It is good to have that information on the record and it reflects well on the appeals process. When a deciding officer makes a decision, a letter goes out stating that if the applicant wishes to have it reviewed, he or she should submit further information.
Maybe I should not have said 21 days. Something can be sent back immediately for a review. How many decisions are changed at review stage? This is very important because the more we can get done at that stage, the less we have to send on to D'Olier Street. I think the ladies know what I am talking about.
Seán Fleming (Laois, Fianna Fail)
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Does it not apply to all schemes?
Seán Fleming (Laois, Fianna Fail)
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It is only medical.
Mr. John McKeon:
This might be where the confusion lies. All the claims have to come into appeals first. Ms Faughnan can correct me if I am wrong. Maybe we will have to look at the terminology. The review is really saying that someone has a certain amount of time to get something in for appeal so we will have to have a look at that.
Seán Fleming (Laois, Fianna Fail)
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Will Mr. McKeon clarify this for me?
Seán Fleming (Laois, Fianna Fail)
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I understood that a decision gets made and a person can send in additional information directly to the Department. I can show Mr. McKeon umpteen letters. Maybe it has to do with the phraseology. I have been unable to understand them and if I cannot understand the Department's letters, the poor punter cannot do so either. I am not talking about the appeals office at all.
Seán Fleming (Laois, Fianna Fail)
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Do many go to the Ombudsman? Do many get overturned? What percentage of cases are overturned having gone through the Department, its review and the appeals office? What percentage of cases would the Ombudsman make a change in after all that or do the witnesses know?
Seán Fleming (Laois, Fianna Fail)
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Somebody who owes €20,000 or €30,000 or something like that.
Seán Fleming (Laois, Fianna Fail)
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people are informed of their right to go to the Ombudsman at the end of the process.
Seán Fleming (Laois, Fianna Fail)
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Could Ms Stack send us-----
Seán Fleming (Laois, Fianna Fail)
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Ms Stack might send us a note. The Office of the Ombudsman will have the number of cases.
Mr. John McKeon:
To be clear, the Ombudsman cannot change a decision. He can recommend to the Department that it reconsider a decision and we do. I met the Ombudsman recently and just at a general level, he said that the number of cases he has to deal with from the Department has fallen dramatically and as Ms Stack said, they tend to be predominantly where we are trying to recover debt and somebody complains that we are recovering 15% and asks whether we could be kinder and recover 2%. It involves those kind of cases.
Seán Fleming (Laois, Fianna Fail)
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From the Department's point of view, the system works very well in terms of its attachment orders. We have not mentioned that today. I have to say that I am aware of cases where having gone through the Ombudsman where a decision was contested, the decision came back to the Department and the Department then wrote to the individual and within 24 hours, it has its money. I have seen cases of that happening.
Catherine Murphy (Kildare North, Social Democrats)
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I have a question concerning this area. Ms Stack talks about reactivating. Is that on foot of the new legislation in 2015 which allowed the Department to go back further? Were there debts-----
Catherine Murphy (Kildare North, Social Democrats)
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Is that the aspect at which the Ombudsman is looking?
Seán Fleming (Laois, Fianna Fail)
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I think the witnesses must acknowledge this because there was no emphasis on chasing overpayments in the past because it was not worth the Department's while given it could only claim back €2 per week, the Department is now finding that the records are sometimes not great and there are old records in some of its branch offices around the country. That is a matter in respect of which there needs a good paragraph when the Department writes to the Department of Public Expenditure and Reform regarding what is being collected because I have come across several cases the regional office said to go back to the branch office. I think the witnesses know the circle.
Seán Fleming (Laois, Fianna Fail)
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It is a historical issue. The records might not have been good so some of those debts might not be collectable.
Seán Fleming (Laois, Fianna Fail)
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We have had a few major floods this year in Donegal and Mountmellick in County Laois. Could the Department send us a report on its assistance? I know the Department would have had a temporary office in Mountmellick for a few days. Now we are relying on the social welfare officer to keep the rest of it afloat so could the Department send us a note on that?
My last question concerns the Social Insurance Fund - this big amount of money. I see the Department has submitted the accounts, which were signed off on 26 September 2017. I come back to the €462 million that is due to the Social Insurance Fund under the redundancy and insolvency payments scheme. It is on page 13 of the audited accounts. The witnesses do not need to go through it because they know the figures. This issue was raised when Mr. McKeon's predecessor was here last year. I am looking at note three at the top of page 14, which says that it is envisaged that in the order of 90% of the value will eventually be written off since the majority of the debt refers to the insolvent companies and that the balance is not recognised as an asset in the Social Insurance Fund balance sheet. I understand that. That figure of €462 million is still there. The Department signed that. The Comptroller and Auditor General has said that 90% of it might eventually be written off. Could the witnesses look at that? This topic was raised here 12 months ago when Mr. McKeon's predecessor was before the committee. We got a letter from Mr. McKeon's predecessor dated 6 April 2017 giving details of the companies that owed the debt and those that were in receivership, liquidation, dissolved, struck off or normal. We continue to pursue that. I have done so through parliamentary questions at various stages. In May 2017, the Department gave a breakdown to a parliamentary question of mine that said that €230 million of that was for cases involving less than €10,000, €120 million for cases involving between €10,000 and €50,000 and €90 million for cases involving individual employers. I am not saying they are there. What is recorded is that of the figure of €462 million, €90 million was for amounts over €50,000 and one of those amounts involved an amount greater than €10 million so some company somewhere along the line owes the fund €10 million. I have no idea if that company is long gone or whether it is back in a new incarnation. They are the figures given in a reply to my parliamentary question on 23 May 2017. One company owed €10 million. There should be clarity on this. It was then asked what liaison existed between the Department and the Revenue Commissioners regarding how many of these companies are still trading. There was a reply to a parliamentary question of mine on 17 October 2017, with which I am sure the witnesses are quite familiar because it is quite recent and they have seen me following this topic since the last meeting. At that meeting, the breakdown by employer with a trading status deemed normal by the Companies Registration Office was given. These are the Department's figures in the reply to the parliamentary question involving normal companies and the Companies Registration Office. Not all these companies have gone away. Possibly most of them have but there are 3,453 with a debt of €72,235,000. The reply to the parliamentary question states that the Department deems their trading status as normal. I do not understand why if their trading status is normal, why the Department is not chasing that €72 million. Some of these businesses may not have been incorporated companies. The Department gave a breakdown per employer of non-registered companies primarily sole traders who were involved in this. There are 4,093 of them with a debt due to the fund of €41.550 million. I still do not understand why the Department has not followed that. We asked what arrangements the Department had with Revenue to follow that up. A memorandum of understanding, co-operation and mutual assistance between the Department and the Revenue Commissioners was signed by Mr. McKeon's predecessor and the chairman of the Revenue Commissioners on 27 February 2017. Page six of that agreement, which I sourced through a parliamentary question, talks about governance of this agreement. If the figure of €462 million is not real, give us the real figure. The Department says 90% of it could eventually be written off.
The figure for the companies and sole traders considered to be engaged in normal trading might be much less than 90%. We firmly do not believe an adequate effort has been made. It stems from the old Department of Jobs, Enterprise and Employment. The witnesses probably feel this was not their debt originally, but nobody in the public service seems to be getting to the bottom of the figure. It is important that we do in order to have a real figure.
On page 6 of the memorandum of understanding the Department of Employment Affairs and Social Protection has signed with the Revenue Commissioners, under the heading of governance, it is stated:
The implementation of this memorandum, and any strategic or policy issues arising, will be kept under review by the high level group, as will proposals for this memorandum to be modified or extended. Meetings of the high level group will be held quarterly or, exceptionally, at anytime at the request of the either party.
The memorandum of understanding was signed in February and there should have been at least two quarterly meetings on it. Mr. McKeon can brief us, but I am quite happy for him to send us the minutes of those meetings and to indicate the progress made. They can be forwarded to the secretariat, as I do not need to delay him. Let us come to a conclusion on this issue. The majority of it is probably a phantom figure. If there are good reasons it is not the real figure, the Department of Public Expenditure and Reform will have to be given a detailed memorandum to enable it to consider whether it is appropriate to make changes as it is hanging there year in and year out. In the interests of clarity, I hope we can get to the bottom of the figure. I am happy, therefore, for the information to be forwarded to the secretariat. Would Mr. McKeon like to say anything?
Mr. John McKeon:
The committee is obviously very familiar with the issue. From the sound of it, there is probably nothing I can tell it about it. The high level group does meet and has met twice. It is due to meet again next week. It meets quarterly. We will be looking to raise this issue to see if we can secure more co-operation with Revenue. My own view is that it is more adept because it deals with employers in this field a lot more than we do.
On the debt and the figure of 3,072 accorded normal status, we know that we do not have figures, but Revenue might be able to help. In many instances the status may be normal, but it may be the case that nobody has bothered to look for the appointment of a receiver or a liquidator. They are seen as normal on the books of the Company Records Office, but the companies may not be actually trading. We cannot tell if that is the case. That is where co-operation with Revenue might help.
Seán Fleming (Laois, Fianna Fail)
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We all know that there is a tremendous exchange of information between Revenue and the witnesses. People are receiving letters stating DIRT returns have been found by Revenue which is well able to chase people in Ireland, England and other jurisdictions on a payment they should not have been claiming when they had money on deposit. There is, therefore, a top-class exchange of information. Can we have it on this topic? That is all I am asking. The witnesses should talk to Revenue about it. If there is real money to be collected, let us go and collect it.
Seán Fleming (Laois, Fianna Fail)
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It needs to be tidied up.
On behalf of the other members of the committee, I thank the witnesses from the Department of Employment Affairs and Social Protection and the Department of Public Expenditure and Reform for participating in the meeting and the material supplied. We have no problem and will wait to receive the outstanding documents. There is general appreciation of the quality of the information received from the witnesses' Department. There is no issue in that regard. We will formally sign off when we come to review our own proceedings. I also thank the staff of the Office of the Comptroller and Auditor General.
We will be meeting in private session in the afternoon. Our next public meeting will be held on Thursday, 14 December at 9 a.m. when we will meet officials from the Department of Finance to discuss chapter 3 of the report of the Comptroller and Auditor General on the cost of the bank stabilisation measures at the end of 2016. We will be joined by officials from the Department of Finance and the liquidators of the Irish Bank Resolution Corporation, IBRC, formerly Anglo Irish Bank.