Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I welcome the initiative which enables Members to introduce Private Members' Bills. It is certainly a major improvement, although I question why the Government continues to operate the new system so timidly. The Order Paper sets out dozens of Bills dealing with important issues which will never see the light of day. It is like somebody who issues an open invitation to a party only to slam the door after the first ten people have arrived. I have several Bills on the Order Paper dealing with issues that are no less important than the business before us today but chances are that they will never see the light of the day. I have to depend on a lucky dip for them to be selected. Perhaps I would have a better chance if I tabled more Bills, on the basis that the more lottery tickets one buys, the better one's chance of success. I urge the Government to build on this initiative.

In regard to the Social Welfare (Amnesty) Bill 2012, a myth has been perpetuated to the effect that social welfare fraud is widespread. However, like other myths which are accepted as established fact by sections of the commentariat and the public, this is a patent untruth. If one compares the totality of what the Department of Social Protection overspends in any one year to that spent by social welfare departments in other countries, it is roughly in line. I examined the figures last night and I suspect that if one constructed a league table of OECD countries we would probably be at the lower end of it. As Deputy Ó Snodaigh noted, the figure that is generally bandied about is a notional or control figure. It is an estimate. Of the actual overpayments taken back by the Department, only 30% are due to fraud. In fact the proportion of overpayments due to fraud continues to decrease significantly.

For example, in the four year period 2007 to 2010 total overpayments due to fraud have reduced from 42.4% to 31% on average. This is a significant reduction and the trend continues, not least because of developments in technology which make fraud easier to detect. With regard to the figures for 2010, overpayments amounting to €83.4 million were made, of which only €26 million involved suspected fraud. This represented only 1.2% of the total social welfare payout in 2010.

There are two situations where an overpayment can occur. First, an overpayment may be innocent. This happens in 70% of cases, where either the client or usually the Department makes an error. Sometimes the client makes a genuine mistake in filling in the forms, while the Department lacks some information that results in the client being paid less.

I am extremely perturbed by section 13 of the Social Welfare Bill which we did not get a chance to debate because the time was used to "talk out" earlier sections to save the blushes of certain Government backbenchers who did not want to continue to vote against some of the amendments we had submitted. However, there is a section in the Bill which allows and envisages a deduction of up to 15% on a weekly basis from a person's income where an overpayment has been made. That is grossly unfair where the overpayment has been made as a result of a genuine error. Take, for example, a single person in receipt of €188 a week. A deduction of 15% would amount to approximately €27 a week. In a case involving a genuine error for which a married person claiming for his wife had no responsibility the Department is empowered to deduct €47 or €48 per week. This is occurring at a time when the Irish League of Credit Unions informs us that some 1.6 million people, including social welfare recipients, have approximately €50 in disposable income per month. I suggest social welfare recipients would not even have that much left after all their bills have been paid.

The Minister pointed out repeatedly in the debate on the Social Welfare Bill that she did not want to see people who deliberately scammed the system only having to pay back the money at the rate of €2 per week. That is fine, but that section of the Bill is not confined to those persons who deliberately scam the system. A person who was overpaid as a result of a genuine error - perhaps the error of an official in the Department - could have to pay up to 15% of his or her meagre income per week. That is wrong and grossly unfair and the matter should be revisited. I deplore the fact that we did not get a chance to debate this section properly during the debate on the Bill.

Other jurisdictions have adopted various methods to combat social welfare fraud. Some have found that the simpler the social welfare system is the easier it is to avoid overpayments or to detect fraud. In addition, other jurisdictions have resorted to increasing publicity. Almost every jurisdiction of which I am aware has a policy in place to prosecute and name and shame people found to be deliberately defrauding the system. The key factor in this regard is developments in technology. This puts social welfare Departments all over the world in a better position than hitherto to combat fraud and prevent overpayments. In Australia, for example, the data matching system is supported by a national database of customer records. A similar system was proposed in France, but I do not know if it has come into operation yet. Most countries are now in a position to focus on primary prevention measures, namely, the prevention of fraud in the first instance. New developments in ICT include the development of data matching processes in real time and neutral networking analysis. However, the most recent report of the Comptroller and Auditor General argues that the control activities of the Department of Social Protection have not been fully utilised to date. It also states the data matching process could be more timely. I urge the Minister to give serious consideration to this issue.

As I said, overpayments fall into two categories. International practice is to prosecute fraud cases rigidly on the basis that letting people off the hook tends to undermine the integrity of the system. In the United Kingdom, for example, efforts to recover debts and prosecute offenders have been stepped up significantly and a one, two and three-strike policy has been introduced. In other words, the more often one is caught, the longer one will be excluded from the social welfare system. A similar approach applies in France, the United States, Australia and elsewhere. Canada, for example, has developed a system of integrity information sessions for high risk clients.

Looking at the figures for 2010, if deliberate fraud accounts for such a small proportion of the total social welfare spend and if the methods of eradicating and combating fraud continue to increase, I must ask whether an amnesty is really justified at this time. I accept the points made about the tax amnesty, although it is well known that I was not a great advocate of it and argued against it at the time. However, there are significant differences between it and the amnesty being proposed in the Bill which I have no doubt is being proposed in good faith at a time when the public finances are in considerable need of reinforcement. In the case of the tax amnesty, however, a settlement had to be made immediately. I admit that people who deliberately evade taxes are on the same moral plane as those who deliberately scam the social welfare system, but the tax amnesty resulted in a considerable boost for the Exchequer because there was an immediate settlement and those involved were brought into the Revenue system at the proper rates. Therefore, there was a significant gain to the Exchequer. By their nature, amnesties are always difficult. They tend to reward cheats at the expense of those who do not involve themselves in cheating, fraud or blackguarding the system. In defence of the tax amnesty, however, it can be said it resulted in an immediate huge boon for the Exchequer at a time when it was badly needed.

It is claimed that if we introduce a social welfare amnesty along the lines suggested, it will result in an immediate benefit of €55 million or so for the Exchequer. As a member of the Opposition, I have a natural tendency to support Opposition Bills, but I would like to see more evidence of how this amount will be achieved.

It seems from the notes that accompany the Bill that it is based on two assumptions; first, that 10,000 people who have been involved in deliberate fraud will come forward - obviously those who do not know they are involved in fraud cannot come forward - and second, that they would have been able to continue to scam the system for the immediate future to the tune of another €7,500 or so if they had not come forward. I have to say with respect that I think both assumptions - that 10,000 people will come forward and that they would have been able to get away with an average of €7,500 over a certain period of time - are pretty questionable.

My primary problem with the Bill is that its definition of those who are going to be protected is very widely drawn. As long as the State can afford it, I have no problem with letting those who have been over-paid as a result of errors off the hook. I certainly think they should be treated much more generously than facing the prospect of having 15% of their weekly wage deducted in order to pay off the over-payment. However, it seems perverse to say there will be no prosecutions, no penalties and no monetary recompense to the State in the case of somebody who has deliberately set out to defraud the social welfare system. There are people in this country who have done that in the past. Some of them have been convicted. I find it difficult to support the proposition that the State will not be entitled to recover one penny of the over-payment in the case of deliberate fraud.

I compliment Deputy Ó Snodaigh on his initiative in bringing forward this Bill. When the Minister speaks, I do not want to hear anything from her about drafting errors etc. I think the Bill is pretty well drafted, by and large. We are all prone to drafting errors. When Deputies go to the trouble of preparing legislation without the support of the machinery of the State - I know how difficult it is because I have done it myself - I have a natural tendency and inclination to support them. I remain to be persuaded in this case, however, because the legislation encompasses the idea of deliberate fraudsters being left entirely off the hook and because it will not lead to any immediate financial benefit to the Exchequer, as far as I can see.

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