Joan Burton (Dublin West, Labour) | Oireachtas source

I thank both Deputies for their comments. We actually need a reality check in regard to the problem of fraud, mistake and error, as it is described. The figures I have, from the Office of the Comptroller and Auditor General, are for 2011. Those for 2012 are still being examined by the office. In 2011, there were more than 63,000 overpayments, amounting to €92.4 million. Given the total social welfare expenditure for 2011, amounting to €20.7 billion, €92.4 million is a very small sum. The overwhelming majority of people in receipt of social welfare or pensions are utterly honest. They get what they are entitled to get, no more or less. The Deputies should note, however, that €92.4 million in one year is a significant amount. If fraud, error or overpayment occurs, we want to be in a position to recover the money in question in a structured way as quickly as possible. A message goes out to people that if they have received overpayments they will be obliged by the State to repay the moneys over time, as is the case with other institutions. If as much as possible of the €92.4 million for 2011 is not recovered, it is people such as pensioners who will suffer, because their legitimate entitlements will be put under the squeeze.

Overpayment is broken down into three categories: fraud, non-fraud and recoveries from the estates of persons who, it is discovered, have significantly more bank accounts or other types of asset than those disclosed on the making of the social welfare application. I refer to applications by individuals at the time of probate, for example. Fraud cases arise mainly on foot of false declarations by customers concerning their employment. Somebody who is actually working may seek a jobseeker's allowance, for example. Evidence of this may be obtained by investigation or, as is increasingly the case, through a tip-off to the Department. People are worried about social welfare money going astray. Non-fraud cases are primarily due to customer error, third-party error or departmental error. Cases arise in which undisclosed means of customers come to light after their deaths when their estates are being sorted out. In 2011, suspected fraud accounted for an estimated €35 million of the €92.4 million. Deputies may be a little surprised by this. Fraud featured in 38% of the cases, concerning 20,535 people. Let me refer to customer third-party error, which is sometimes a rather polite term. It may materialise on discussion with officers that the partner of an individual has returned only a week or two before that discussion. We would not have the time or resources to engage in litigation in every case. In the circumstances I describe, an individual may say he or she has a partner again and reflect this in the application for social welfare.

The third-party error amounts to €40.5 million, or 44% of the €92 million and comprises 36,000 cases. Deputy O'Dea should note that departmental error accounts for a very small amount, €5.5 million or 6%, and amounts to about 6,000 cases. Estate issues which arise, largely after somebody has died and his or her estate is being settled, account for about €11.5 million or 12% of the total, some 371 cases.

The total is about 63,000 people or customers of the Department and the estimated loss to the Department is about €92 million. In regard to fraud, on the part of officials at times there may be a lot of suspicion that there was a failure to accurately report the current status to social welfare. We would not have the capacity to go into the history of that in great detail and it might not be worthwhile to do so.

We have an obligation where these cases come to attention, to ensure the moneys, as far as possible, are recovered. In regard to people who are currently receiving social welfare payments I have set up a humane and considered way of assessing those with overpayments. They would, if they wished, have the right to appeal through the appeals system.

If people are currently in receipt of social welfare that can now be recovered at a maximum rate of 15%, or up to €28 a week, from the primary payment the individual receives. If he or she was in receipt of jobseeker's allowance the amount would be deducted from €188 per week. That is quite a considered way of doing it.

I do not have statistics on the exact amounts and recoveries. It is a process which is under way in social welfare offices right around the country. It only came into effect from January and we had to set up systems and so on. We are very anxious to take into account extenuating circumstances. Officials in the Department of Social Protection, by and large, have had an acknowledged reputation for doing that.

We then come to somebody who has received an overpayment. As I said, 38% are from fraud, 44% from customer error, just 6% from departmental error and 12% from issues arising from estates. The people involved are no longer in receipt of payments from social protection, therefore we cannot recover the money from them through the social welfare deduction process.

I ask for the support of the House for the Bill. It seeks the power to get an attachment order in regard to current earnings up to the same limits or in regard to bank accounts because sometimes money can be discovered. I gave Deputies details of people who were apparently reliant on social welfare income, but because they had other businesses had amassed significant bank savings in a number of cases published in the different reports on fraud.

It is appropriate that we should be able to do this in a structured way that is fair and takes into account individual circumstances, but also means that the message goes out that the Department is not a soft touch in regard to fraud or abuse of the social welfare system and will recover money in a structured way. The alternative available to us until this is introduced is to do nothing and not try to recover the money at all. In the good years it was quite possible to take that approach, but it is scandalous in regard to taxpayers who are paying tax and PRSI and is not acceptable to them.

Another option is to go down the route available without this amendment in regard to people no longer in receipt of social welfare payments, that is, to take civil proceedings through the courts. Deputies know very well that is expensive, lengthy and onerous. This will provide us with a mechanism which will allow us to recover money for taxpayers who are paying their PRSI and, in particular, the vast majority of people receiving an income from social welfare who want to see it spent on people who have the correct entitlement.

The total level of overpayments is 0.44% of departmental expenditure. There may be other areas we have to investigate. We are introducing a huge range of IT which will enable us to check identities. We have launched the special investigations unit and there is an updated and very active programme in regard to fraud detection. Members of the public are making contact at a very significant rate with the Department to indicate areas where they feel the system may be abused or that the Department may not know the full facts and that there are facts it ought to be aware of. The amendment is measured and will help to recover significant amounts of money for the Department as we develop this system.

I will be very conscious of what Deputies said. Deputy Ó Snodaigh referred to the rent system in Dublin City Council. I am aware that people who understate rent get an awful shock when, for different reasons, things finally catch up with them. The Department is conscious of that and wants to provide for it in a structured way.

I understand Deputy Ó Snodaigh said that if one underpaid rent to Dublin City Council a whole range of services and options suddenly closed off completely, which was very difficult for a family. We are simply saying that the singular payment of the principal person concerned will be subject to deductions of up to 15%. If a person is now working and no longer a direct customer of the Department we will have a similar arrangement of recovery at a rate of 15%.

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