Mr. John McKeon:

There are eight different issues to discuss, as I set out in the letter I sent, which is why it is taking a while. We have accepted the recommendations by the Comptroller and Auditor General in the various chapters. We are very conscious in accepting them, particularly in respect of overpayments, that we must have regard to fairness and equity. The Ombudsman published a special report on overpayment recovery in 2019 that emphasised the need not just to take an empathetic approach but to trust in the judgment of our individual officers when they make an overpayment decision and a decision about how it should be costed. We always must keep this in mind. We cannot just focus entirely on minimising the rate of error or maximising the rate of collection. We have to do so mindful that the people we are dealing with are people on welfare or who have very recently been on welfare.

With regard to the actuarial review, the figures are very stark. They point to the issues that will arise for future generations if action is not taken fairly soon. The Government has decided to take the approach of increasing PRSI rates as the means of addressing forthcoming deficits. That will start in 2024 with an increase of 0.1% in all rates of PRSI, which is the equivalent of about 90 cent a week for the typical individual.

Branch managers, on whom there is a chapter, have been in place since 1909, before the foundation of the State. They deliver a very important service for us. The exceptional payment we made to them in 2022 was entirely justified in light of the inflationary pressures at that time, the influx of Ukrainian refugees and the fact branch managers, who run small, mainly family-run, businesses, did not have access to the business supports from the Department of Enterprise, Trade and Employment. I am entirely satisfied that the payment was in order.

With regard to classification for PRSI purposes, I repeat what I said before, which is that the issue of misclassification is not as significant as people perhaps think it is. The data does not show that it is. That does not mean we do not take it seriously. We received a number of recommendations from this committee previously, all of which we have implemented. We have increased the number of resources in the Department dedicated to getting to grips with employers who are misclassifying workers. We are making progress. We must bear in mind in all this discussion that workers' main interest is in their employment rights, not their social insurance. That is our experience. Their social insurance benefits are pretty much the same nowadays whether they are employed or self-employed. In fact, reclassification from class S to class A can, in some cases, reduce people's entitlement. Workers' main interest is in their employment rights, which is a matter for the Workplace Relations Commission. The Supreme Court indicated in the recent Karshan judgment that the determination of employment status for social welfare or tax purposes does not necessarily translate to employment right purposes. The committee needs to be aware of that.

If I may, I will conclude with three points. The first is to acknowledge and pay tribute to the staff of the Department. Their response to the Covid, Ukraine and cost-of-living crises has been phenomenal. I am proud to serve and be associated with them. They demonstrate the best in public service values.

The second, and perhaps most important, point I make, and I try to say it every year, is that, as a Department, we are conscious that we must protect the welfare of pensioners, carers, lone parents, people with disabilities and others who are reliant on welfare payments. That is both in their interests and in the interest of wider society. A key determinant of economic and societal progress in developed economies is how income is distributed. It is important for people to have the wherewithal not just to subsist but to engage and actively participate in society. We strongly believe in and will continue to argue the case for seeing expenditure on social protection as an investment in social cohesion and human capital. It is an investment that is vital to the welfare and development of all people in our society, particularly, but not just, those in receipt of our payments.

Third, it is important to acknowledge that we are not a perfect Department. We do our best but we make mistakes. Given that we make 90 million payments a year, even a small percentage of error has a big impact. We are very conscious of that. We are always open to challenge and critique. We welcome this examination by committee members because it helps us to improve our services year on year. I thank the Chairman and members.