Lay off people on social welfare – they are stigmatised enough
The biggest problem with the social protection budget is that recipients of social welfare are not paid enough
Leo Varadkar launched the controversial campaign.
The new Department of Social Protection’s (DSP) anti-fraud campaign, “Welfare Cheats, Cheat us all”, has provoked controversy and debate. Media commentary, most of it ill-informed, has ranged from “it’s a witch-hunt against the most vulnerable”, and “using a sledgehammer to crack a nut” to “it’s time to deal with the spongers”.
The campaign cites a figure of €506m for 2016 which includes, according to the DSP, combined “control and anti-fraud savings”. Using this figure is misleading and gives the impression that there is a huge amount of fraud when there is not. In fact, only €41m relates to “deliberate, intentional fraud by people claiming benefits they are not entitled to”.
Social welfare recipients are stigmatised enough without the DSP running a campaign that will drive a wedge between us (workers) and them (idlers). Even pensioners, most of them on a contributory pension, meaning they have paid into the system, are often portrayed as a burden on younger, working, people. The €41m actual fraud is just 0.2 per cent of the nearly €20bn DSP budget.
Of the €506m, €46.7m was paid to claimants who provided inaccurate or incomplete information or failed to report a change in circumstances but did not deliberately intend to defraud the DSP. Also included in the overall figure are “estate overpayments” which arise when relatives forget to cancel pensions or other allowances following a death and €20m “estate overpayments” were made in 2016. Most of this has already been repaid in full.
The DSP made €2.3m administrative errors in 2016 when benefits were paid incorrectly. According to the Department, “some level of error is expected given the scale of the Department’s work involving some 1.2 million payments each week”. Out of the €506m, €396m was not fraud but money saved as a result of “control” measures taken by the DSP in 2016. This can be interpreted as making it as hard as possible for claimants to access their entitlements.
The biggest problem with the social protection budget is that recipients of social welfare are not paid enough. A report from the Vincentian Partnership for Social Justice – Minimum Essential Standard of Living 2016 – shows that social welfare provides an inadequate income for most households in receipt of allowances and pensions.
Researchers from the Minimum Essential Budget Standards Research Centre calculated the amount of weekly income required (excluding housing, childcare, and the effect of secondary benefits, such as a medical card) to have a minimum essential standard of living (MESL) for 12 types of households. For example, two parents with one child need €431.24 if living in an urban area and €520.81 if in a rural area.
Two parents with two children, including one teenager, need €565.67 in an urban area and €653.70 in a rural area. Single adults of working age need €242.37 in an urban area and €291.60 in a rural area. Social welfare rates do not provide a MESL for any of these households.
Pensioner couples living in social housing, or with the mortgage paid off, are the only people with an adequate income. Families with adolescent children are worst off but people of working age without dependent children also experience income inadequacy.
Although social welfare rates increased slightly in 2017 most households living on social welfare still have an inadequate income. Two parents with two children now get €380.60 (excluding housing) which is far short of the MESL budget needed of €483.29 if living in an urban area or €573.32 if in a rural area. So although fraud must be eliminated as far as possible, nobody on social welfare is well off.
Income is a huge determinant of health, along with housing, education, and employment. Income inequality is a growing global problem. Eight men now hold the same wealth as four billion of the world’s poorest people. Aosdána pays 148 “full-time practising artists” a Cnuas of €17,180 whereas jobseeker are expected to survive on €10,036. Are artists worth more than unemployed people? Several recent studies have highlighted the strong association between low socioeconomic status and health.
According to a US study published in the Lancet last month, “Without interventions to decouple income and health, or to reduce inequalities in income, we might see the emergence of a 21st century health-poverty trap and the further widening and hardening of socioeconomic inequalities in health.” This will happen in Ireland unless something radical is done about it. What the country needs is more fairness. Increasing child benefit for teenagers would be a good start.