Seán Fleming (Laois, Fianna Fail)
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53. To ask the Minister for Social Protection the amount owed to the social insurance fund; the efforts made by his Department to collect moneys owed; and if he will make a statement on the matter. [25716/17]

Leo Varadkar (Dublin West, Fine Gael)
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At 31 December 2016, the total amount owed to the Social Insurance Fund (SIF) was €459 million in employer debt and €89 million in customer debt. These figures are provisional pending finalisation of the SIF Financial Statements.

Employers pay into the Social Insurance Fund (SIF) at a rate of up to 10.75% of employee salaries. This payment is designed to contribute to the cost of benefits paid out of the social insurance fund. One of the benefits funded by the SIF is the provision of redundancy and insolvency-related payments in circumstances where the employer making the redundancies is unable to fund these payments itself; in the majority of cases, because the employer concerned is insolvent. In this way the payments made into the SIF by employers help to protect the interests of workers when any individual employer cannot meet its obligations under law to pay salary arrears and redundancy settlements to employees who lose their jobs.

Notwithstanding that payments out of the SIF are properly made in accordance with this insurance principle, the Department pursues recovery of the amounts paid. The balance of any funds paid out but not recovered is recorded and disclosed as a debt in the financial accounts of the SIF. A dedicated debt management unit is responsible for recovering as much debt as possible in line with the Department’s debt management policy. The unit seeks repayment of debt either directly from the employer (typically by means of an agreed repayment schedule) or from any liquidator that may be appointed to wind up the affairs on an insolvent business. The unit has a staff of six (5.1 full-time equivalents) and operating costs of just over €300,000. A total of €10.7 million in funds paid out of the SIF to cover redundancy related payments was recovered by the Department in 2016 (provisional figure).

The majority of employer debt relates to companies which are insolvent. In these cases, recovery of debt is pursued with liquidators through the liquidation process. The Minister for Social Protection is a preferential creditor, along with the Revenue Commissioners.

In cases where employers are not insolvent and are still trading the Department is mindful that an overly aggressive process in pursuing debt with companies that are still trading, but are nevertheless in a financially precarious position, might result in those companies being pushed into an insolvency situation which could result in further job losses. Accordingly the unit engages with employers to establish the situation on a case by case basis and seeks to recover debt on a mutually agreed basis, including setting up repayment by instalment where appropriate.

With regard to the general customer debt of €89m the Department’s policy is to pursue the recovery of all sums overpaid. This is done to discourage wrongful and fraudulent claiming, to ensure that legislative provisions are enforced, particularly those relating to the proper management of the SIF, and lessening the burden on the Exchequer.

The Department raised overpayments due to the SIF in 2016 of €15.6 million and the value of recoveries of sums overpaid, in respect of 2016 and prior years, was €14 million.