Joan Burton (Dublin West, Labour) | Oireachtas source

This has been an issue in successive reports of the Comptroller and Auditor General. In recent years the annual amount for overpayment, some of which arises from fraud, some from mistakes, a small percentage as a result of errors by the Department and some from estate cases, is around €90 million. In the context of the very painful changes I have had to make as Minister and those made by the previous Government, Senators will appreciate this is a significant amount. I agree with the Comptroller and Auditor General that the Department should put in place serious systems to make sure as much is recovered as possible and that it is done reasonably, taking into consideration each individual's circumstances.

If an overpayment is calculated, the person is written to and advised that an overpayment has been calculated. Often an investigating officer is involved and the case will be discussed. Perhaps someone claims for more children than there really are and it comes to light. That person is advised that he or she has misclaimed child benefit for a period of time. Perhaps a partner lives with that person while she has been claiming lone parent allowance or, as Senator Moloney referred to, someone has retired and claimed a non-contributory pension without disclosing the full extent of his means to the Department. When that person's will goes to probate, the value of the estate emerges and it is clear he should not have qualified for the level of payment he received.

The amount of the overpayment is calculated in the same way as back duty would be calculate by the Revenue Commissioners based on the number of years and the amount per year.

The person is then told how this figure has been calculated, the assessment is made and he or she has a right of appeal. Appellants may set out any circumstances that support their view that an assessment is wrong. Once the appeals process has concluded, the next step is the issue of repayment. The simplest approach is for the person in question to make a voluntary arrangement with the Department to make the repayment in weekly, monthly or annual instalments, depending on circumstances.

Until the legislation was changed last year, the law prescribed that the maximum the Department could recover from a person with a social welfare income was €2 per week. We discussed the small number of people who abuse the social welfare system. However, some people simply gave two fingers to the Department by indicating that we could recover an outstanding amount of perhaps €20,000 at a rate of €2 per week. Senators can do the calculations but what is clear is that it would take a long period to recover such a large amount with such small instalments.

In the small number of cases where the Department wishes to recover overpayments arising from fraud, including significant amounts in some cases, we refer the matter to the Director of Public Prosecutions and Garda Síochána and these types of cases are now frequently prosecuted in court. A person may make a voluntary agreement with his or her local social welfare office to pay a reasonable amount, according to his or her circumstances. Where he or she does not enter into such an agreement, the Department, under this legislation, will have the power to make an attachment. We took such powers last year in respect of social welfare recipients. In the case of individuals who have received an overpayment, we have the power to make an attachment in respect of 15% of their income from social welfare. If a person is on the basic rate of €188 per week, the Department may deduct up to €28 per week, depending on circumstances. If, on the other hand, the person in question is not receiving an income from social welfare but is employed, the Department will obtain the same power as that available to the Revenue to recover the overpayment through an attachment of his or her earnings, bank account or assets.

As Senators may be aware, it has emerged in a number of the fraud cases the Department prosecuted through the courts that people had substantial amounts in their bank accounts. If a person comes before the courts having defrauded the State of, for example, €10,000 or €20,000, and he or she has a healthy bank balance with multiples of this amount on deposit, we should be able to recover the overpayment. The Bill gives us the power to do so. While I do not anticipate that this power will be used frequently, it is important that the Department is able to avail of it.

It is also important that social welfare officers have the power to stop people who are entering or leaving the country through our airports. In conversations on doorsteps, one used to hear that someone's brother who worked at Dublin, Cork or Shannon airport had observed people travelling back and forth from other countries to claim social welfare here. Thanks to the powers provided by the Oireachtas, social welfare officers now have the power to stop and question people. If a significant level of fraud is discovered, a case may be taken before the courts. This important power forms part of a suite of powers available to the Department in its efforts to inhibit fraud and abuse of the social welfare system and recover amounts that have been overpaid.

On occasion, an overpayment is made as a result of a genuine mistake, for example, where a person did not understand the rules. Nonetheless, arising from the reports of the Comptroller and Auditor General, the Department has a responsibility to recover such funds. The rules will be operated with care and the regulations will be based on those available to the Revenue Commissioners and the process I have described. The regulations under which the Revenue Commissioners operate are extremely detailed. Presuming that this legislation will be passed, the regulations will be drafted within two months of its enactment.