Fraud and error cost department €343m
SOCIAL WELFARE:THE DEPARTMENT of Social Protection is owed more than €343 million in welfare overpayments due to fraud and error according to the report of the Comptroller and Auditor General.
More than €92 million in overpayments was made in 2011 alone, almost double the amount overpaid to welfare recipients in 2007.
Last year 63,310 welfare claimants were paid money to which they were not entitled.
About 38 per cent of these overpayments were attributed to fraud by the claimants; in relation to 44 per cent the department accepted recipients had overclaimed in error; departmental error was identified as the cause of just 6 per cent of cases; while the remaining 12 per cent were “estate cases” or overpayments to people now deceased.
More than €51 million was recovered by the department in 2011 either through repayments made or through the withholding of social welfare payments. However the report points out that the value of new overpayments last year exceeded by more than €40 million the amount recovered.
Almost 60 per cent of the overpayments recorded during 2011 remained outstanding. At the end of June 2012, 47 per cent of the debts owed to the department had been outstanding for more than five years.
The report notes the low rate of prosecutions taken for social welfare fraud. Fewer than 3 per cent of cases classified as fraud are referred for prosecution. Although overpayments attributed to fraud totalled €35 million, the report states that the rate of recovery of debt attributed to fraud is not known.
The 15 biggest overpayment debtors, whose cases were referred to the central overpayments and debt management unit in 2011, collectively owed €800,000. By the end of the year less than 0.2 per cent of the debt had been recovered.
In one case involving a debt of €55,000 a letter had been sent to the claimant by the overpayments unit in October 2011, but no further action to recover the money has since been taken.
A review of the department’s Navan Road office in Dublin found a case where an overpayment of €1,326 had been written off and a second overpayment of €428 recorded, but there was no documentation on file to explain the transactions. Three files in the office in relation to overpayment had been destroyed.
A departmental error resulted in fuel allowance overpayments of €1.2 million made to about 60,000 Jobseeker claimants last winter. The department is to recover this money by deferring this year’s payment to these claimants by one week when the fuel allowance scheme recommences next month.
A total of 1,520 rent supplement claimants – equivalent to about 1.6 per cent of all claimants at the start of the year – had overpayments recorded to them in 2011. More than half a billion (€502 million) was spent on rent supplement last year.
The report noted that local authorities inspected just 6 per cent of rental properties and 37 per cent of those inspected did not meet minimum living standards.
Separately the Department of Education and Skills is to send back €11 million of an EU fund given to aid workers made redundant when large companies leave Ireland.
Applications were made to the European Globalisation Adjustment Fund in respect of measures to assist workers affected by the Dell, Waterford Crystal, SR Technics and Talk Talk closures.
The full amount of the fund contribution based on estimated costs is advanced by the EU when an application is approved. Some €25 million was received in advance by the department. As a result of the underspend on these programmes, €11 million is due to be refunded to the EU.