Joan Burton (Dublin West, Labour) | Oireachtas source

I wish to acknowledge the work of Deputy Ó Snodaigh in bringing this Bill before the House and his interest in the area of social welfare fraud. I also wish to thank all of the Deputies for some interesting contributions to the debate so far.

The Bill aims to provide social welfare recipients with the opportunity to disclose voluntarily and report any irregularities in their existing social welfare payments and to have their rate of payment regularised. The incentive for the individual is that the Bill provides that any consequent overpayment, including as a result of serious fraud, would be waived or cancelled.

At the outset let me say that the Government is opposing the Bill as it does not believe it will achieve its desired purpose. What is more, there are serious flaws in the proposed legislation, not least the provision which would essentially allow those who defraud the State to escape scot-free. Such a clause should be deeply troubling for any member of this House.

The Labour Party has always championed the ability of the social welfare system to be a safety net for those who need it most. It is for this reason that we have protected core social welfare rates in successive budgets. It is also for this reason that our rates are so far in excess of the current rates and proposed future rates in Northern Ireland, of which we should be conscious. Those who defraud the system do so without thought of the consequences for others.

At a time when resources are scarce and every euro of spending is strictly monitored by the troika, every cent of the social protection budget must be protected for those who need it. People scamming the system are taking money from others such as pensioners, carers and people with disabilities. Supporting the Bill essentially would give a charter to raid that budget at the expense of those who really need it. If Sinn Féin believes that is a sensible way forward, so be it.

Aside from the financial implications of fraud, there are basic practical realities. Social welfare amnesties have been tried at least twice before and demonstrated to be ineffective. In each case the number who availed of the amnesty was in the region of 500 and the Department had already detected the bulk of these. Therefore, people whom the Department had approached because they were committing fraud had to be given an amnesty, with the tiny number who had come forward and put their hands up. Rather than implement measures that will not work, the Department's fraud initiative has been implemented and is working. We are combatting fraud to ensure there will be more money available for those who are genuinely entitled to it and whose payments we want to secure.

The prevention of fraud and abuse of the social welfare system is an integral part of the day-to-day work of the Department which is the largest spending Department in the State with a budget of some €20.2 billion this year. Even Deputy Richard Boyd Barrett's figure of 1% represents a cool €200 million. At budget time I spend months on figures that tot up to €200 million. Let us be realistic: 1%, 2% or the 3% Deputy Aengus Ó Snodaigh mentioned, or €600 million, is a lot of money, even for the troika. The Department processes in excess of 2 million applications each year and makes payments to 1.4 million people every week. Given the scale of its expenditure, a key priority for the Department is to ensure resources are targeted at those who need them the most. The majority are utterly honest with the Department, as they are in every other element of their lives, set out their circumstances honestly and receive their entitlements, no more, no less. Everybody in the House accepts this, but there is a worrying, if small, percentage who account for a significant sum of money that we need to address. There is a balance to be struck in this, as in many other matters; we pay people who are entitled to money and overwhelmingly utterly honest, but, equally, we go after those who are being overpaid or scamming the system because they are taking bread out of the mouths of others, not to mention workers who pay PRSI to fund the social welfare system and have a say and stake in this, too.

The objective of the Department's fraud initiative 2011-13, launched in late 2011, is to ensure the right person is paid the right amount of money at the right time. Sometimes people see social welfare fraud as a victimless crime; we have heard some suggestions of this here. but it is not victimless. Workers who pay tax and PRSI are paying for it and somebody else in receipt of social welfare payments could perhaps do with more money. Those taking excess money from the system are taking it from these individuals. The programme for Government commits to a zero tolerance approach towards social welfare fraud. In our fraud initiative we work with agencies such as the Customs service, the Revenue Commissioners, the Taxi Regulator and so on to ensure that, as far as possible, we can identify those who are working and claiming. This is important. We are updating the Department's systems for identification and seeking to build matching information and data to find people who are claiming more than one social welfare payment which, unfortunately, is a small but costly problem if it is not detected, as well as those who are working and claiming. Departmental staff are working hard to reduce all these practices to a minimum. Where fraud is committed, we have to ensure there is effective and timely recovery of overpayments. The Department is cognisant of the balance to be struck between people who are overclaiming, being overpaid or directly defrauding the system and the majority who are completely honest in respect of their social welfare and other obligations.

An amnesty of this kind would be financially misguided. I will set out some of the recent figures and explain why debt recovery is important. In 2011 departmental officials prevented overpayments of €645 million through control activity, that is, by high numbers of checks to see whether people were getting the right amount. If the Department did not do this work, the social welfare spend would be approximately €645 million higher. We have carried out many such checks. Last year we reviewed approximately 1.2 million social welfare case files. Deputy Joan Collins implied that inspectors' calls to people's doors were based on tips from the public, but they are not. Inspectors make random visits to houses, which is an essential part of control activity. One of the jobs of social welfare inspectors is to check the circumstances of individuals who have forgotten to tell their local social welfare office about their circumstances. If people are never at home because they are busy at work, or their family circumstances do not match what they told the local office, the inspectors do an important job. It is not very pleasant for the person next door to an individual who abuses the system, who is getting up at 7 a.m. and going to work all week, working hard for his or her money and paying for transport to feel he or she is paying not for the pensioner who needs a pension but for somebody who is abusing the system. That does not wash well with most working people and people are fairly knowledgeable about the state of the lives of others. Even with the dedicated efforts of departmental officials, there was a total of 63,310 overpayments, amounting to €92.4 million, in 2011, of which €51.5 million was recovered, up from €34.5 million in 2010, the figure mentioned by Deputy Aengus Ó Snodaigh. The recovered overpayments amount to a significant sum of money. I do not yet have a figure for 2012, but I think it is roughly in line with the figure for 2011.

I wish to clarify a point Deputy Willie O'Dea made about the recovery of up to 15% from social welfare payments. In the past somebody on a road or a landing in a block of flats who had been scamming the system was required to pay the money back at a rate of €2 a week. The recent change will mean that in respect of their principal payment, not that of their partner or their children's payments or child benefit, the Department will request him or her, based on a review of his or her circumstances, to pay up to 15% a week. That is not a mandatory figure. It will be based on a review of the circumstances of the case. It could mean a figure of up to €26, but I assure the Deputy that his example which included the spouse's income would not apply.

It will relate to the principal individual who has been involved in the situation.

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