Mr. Seamus McCarthy:

The Department of Employment Affairs and Social Protection operates a wide range of income support, welfare and labour activation schemes. Expenditure on the schemes is accounted for in two accounts: the appropriation account for Vote 37, and the account of the Social Insurance Fund. The Department’s overall expenditure on scheme payments in 2018 totalled €19.6 billion. An appendix to the appropriation account provides a useful summary of the combined scheme expenditure, set out on a scheme-by-scheme basis within broad programme groups. The Department’s expenditure on administration of the schemes amounted to a further €636 million.

The Vote account is funded mainly through direct Exchequer issues. In contrast, the Social Insurance Fund is financed mainly from pay related social insurance contributions, which are collected by the Revenue Commissioners, acting as the Department’s collection agent. Total receipts into the fund in 2018 were €11.2 billion, an increase of 9.4% on the previous year and an increase of almost 47% on the 2013 level. The fund receipts included €575 million in levies payable to the national training fund operated by the Department of Education and Skills. The surplus on the Social Insurance Fund for 2018 was in excess of €1.1 billion. This left the fund with accumulated reserves of €2.3 billion at the year end. I gave a clear audit opinion on the accounts of both the Vote and the Social Insurance Fund for 2018.

Before I turn to the three chapters of my 2018 report, I wish to draw the committee’s attention to a typographical error we identified in the Vote account as published. In note 6.1, which deals with the Department’s expenditure on compensation cases, the column titled "compensation awarded" should have been titled "legal costs awarded" andvice versa. The figures in the note are not affected. I wish to correct the record on that matter.

On chapter 12, regularity of social welfare payments, for a variety of reasons, some welfare recipients may be paid amounts to which they are not entitled or that exceed their entitlements. Such irregular payments can arise as a result of inadvertent claimant errors, deliberate fraud by claimants or departmental administration errors. Control surveys of welfare schemes carried out by the Department are intended to identify the types of cases where such excess payments arise. The surveys also provide a basis for estimating the level of irregular payments and underpayments affecting the schemes examined. The results of successive control surveys suggest that there is a material level of irregular payments on both Vote and social insurance schemes in 2018. As has been the case for several years, I have drawn attention to this in both audit certificates.

Chapter 12 also outlines the findings of a 2018 control survey of a random sample of 1,000 recipients of the non-contributory State pension. The Department found that one in five of the recipients whose claims were reviewed in the survey were receiving payments in excess of their entitlements. The overpayments averaged approximately €50 per week for those who were overpaid. The excess payments represented 6.5% of the overall value of the payments reviewed. Significantly, the control survey also found that more than 8% of recipients were receiving less than they were entitled, by an average of approximately €30 per week. The underpayments represented 1.1% of the overall payments reviewed. From a regularity perspective, these errors do not offset one another. Paying one claimant less than their entitlement does not compensate for paying someone else more than their entitlement. The Department has initiated changes to the control framework for the scheme to address the causes of the errors.

Chapter 13 reviews the timeliness of claim processing by the Department, which is a key performance measure. Claim processing indicators have been included in the annual Vote Estimates for several years. The Department has set targets for each scheme in terms of the volume of claims to be awarded within a defined time period. In most cases, the Department achieves in or around the target levels. It has reported significant progress in recent years in reducing the average time to award claims. The diagram in the written submission I have provided shows the average number of weeks taken to award a claim in 2018 for the main scheme types. Typically, schemes with the longest waiting time for a decision are those where eligibility conditions require a medical assessment, a means assessment, or both.

The examination noted that, for some welfare schemes, the rate of claim rejection exceeds 20%, which may indicate a need to provide better information to claimants about scheme qualification criteria.

Chapter 14 examines the development of application forms from the perspective of customer service. Minimising the difficulty of the application process is key to the delivery of good customer service to applicants for income support and to ensure the correct outcome for each application in a timely way.

The Department relies on an extensive suite of paper forms for information gathering. Based on our examination of a sample of the Department’s forms, these are typically lengthy, which may be intimidating or difficult for some applicants. However, the forms examined generally conform well with good design guidance issued by the Department of Public Expenditure and Reform.

In terms of processing, the Department makes extensive use of scanning technology to read certain paper forms but this continues to require extensive manual intervention and checking.

There are a limited number of schemes with an online application facility. Where this option is available, online usage rates are generally very low. There appears to be significant scope for further development and roll-out of online claim application options.