Six people had social welfare ‘overpayments’ of more than €200,000

Social welfare “overpayments” of more than €200,000 have been identified in six individual cases in 2016, relating to fraud or suspected fraud.

The figures published in the Comptroller and Auditor General’s (C&AG) report are part of a wider analysis of annual overpayments amounting to between €100 million and €120 million between 2013 and 2016.

Such overpayments can occur due to fraud, errors on the part of claimants and the Department of Employment Affairs and Social Protection, or in “estate” cases where the financial circumstances of a recipient only come to light after their death.

The C&AG reported the overall estimated level of debt due to overpayments at €482.5 million. Some overpayments are simply written off, because of the death of a welfare recipient, slowness in acting on the part of the department or due to its own error where the recipient could not “reasonably be expected” to know an error had occurred.

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Write-offs peaked at €14.1 million in 2014 and were reduced to €2.7 million last year. Just 5.7 per cent of the total number of debtors (11,000) accounted for 60 per cent of the total outstanding debts (€289 million).

The department’s Central Debt Unit was dealing with 1,156 cases where debts amounted to more than €50,000, and where average amounts stood at €78,500. By the end of last year, a review of overpayments identified six cases in which more than €200,000 was paid out.

One of these claimants, who received €333,463, was prosecuted and given a five-year prison sentence. Two more cases are under investigation by gardaí.

Three other cases of suspected fraud, amounting to a total of about €634,000 were not considered “appropriate” for prosecution.

Criminal proceedings

Last year, 16,225 cases of welfare overpayments were attributed to fraud. Of those, 1,305 were valued at above €5,000. A total of 222 cases were considered by the department’s Central Prosecution Unit for criminal proceedings.

The number of cases prosecuted rose from 266 in 2013 to 353 in 2015 before dipping back to 341 last year. In 2016, under the Social Welfare Act, there were 17 suspended sentences (down from a high of 31 in 2014) and four prison sentences (down from a high of seven in 2014).

Comparable data relating to Garda fraud prosecutions is not available, the C&AG said. The overall level of overpayments comes in the context of weekly income support payments to about 1.6 million with an overall cost last year alone of €19.2 billion.

A Debt and Receipts Accounting System was introduced in November 2014 to manage debt and cash receipting.

The department welcomed a decrease in the level of fraud and suspected fraud cases, which fell from 49 per cent of total illegitimate payments in 2013 to 37 per cent last year.

The proportion categorised as departmental error also fell from 4.8 per cent to 2.1 per cent although increases were found in claimant error (34 per cent to 42 per cent) and estate cases (12 per cent to 18 per cent).

While 68,562 cases of debt from overpayments are “suspended”, meaning no recovery efforts are in place, the department does seek to claw back some money that should not have been paid out.

Direct repayment

It does this by either seeking direct repayments or through deductions from welfare payments.

The department also has the power to impose attachment orders which can recover money from either financial institutions or employers.

Up to June 2017, such orders were brought in 31 cases valued at €952,000, recovering €369,000.

The department has not undertaken any “formal consideration” of using third-party debt collection services, the C&AG report noted.

Up until 2013, there was limited legal powers of debt recovery and the normal weekly deduction from welfare payments of debtors was €2 per week, “which significantly limited the department’s ability to recover overpayments in any kind of meaningful way”.

The C&AG discovered excess welfare payments in a range of areas, as high as 18.4 per cent on gross payments under disability allowance and 13.4 per cent on illness benefits.

The watchdog said the level of excess payments uncovered by fraud and error surveys by the department was “material”.