Nearly one in 10 PUP claimants were ineligible, State auditor’s review finds

More than €14.5m in overpayments identified by end of August 2021, says C&AG report

The Department of Social Protection received 1.75 million applications for the pandemic unemployment payment between March 2020 and February 2021. Photograph: Frank Miller

The Department of Social Protection received 1.75 million applications for the pandemic unemployment payment between March 2020 and February 2021. Photograph: Frank Miller

 

A review of a sample of pandemic unemployment payment (PUP) claims paid out found that in nearly one in 10 cases the individual was not eligible for the Covid-19 payment, a report from the State’s auditor has said.

In just under half of the cases reviewed where individuals were not eligible to claim the PUP, they had been receiving the payment while still working.

In a quarter of cases there was no evidence the PUP claimant had been working prior to the pandemic, and in another quarter of instances the PUP claimant appeared to have returned to work.

The report by the Comptroller and Auditor General (C&AG), said almost €5 billion was paid out under the PUP scheme last year, which was introduced in the early weeks of the pandemic.

The report said evidence from a sample of claims reviewed found more than nine per cent “were not eligible for the PUP payment received on the date tested”.

The Department of Social Protection received 1.75 million applications for the pandemic payment between March 2020 and February 2021.

The report, published on Thursday, said more than half of all applications were received within the first five weeks of the scheme being opened.

The audit report said “notwithstanding the exigency of issuing a large volume of payments within a short timeframe, there were opportunities to review eligibility for payments as the scheme progressed”.

The PUP was introduced for people who had lost their jobs due to the Covid-19 pandemic, with the payment initially set at a flat rate of €350.

The auditor’s report said that people who previously had relatively lower earnings “were significantly better off when claiming the PUP”.

The report said the scheme was launched on an “emergency basis”, and therefore officials said controls “would not be as rigorous as that normally applied”.

This meant the risk of possible overpayments “would be higher than normal”, and this was “unavoidable given the high volume of claims to be processed”. Officials were concerned with avoiding long delays in approving payments.

The department said it anticipated that “even if some people sought to take advantage of the scheme, most people would, at a time of community togetherness, act honourably and honestly”.

The report said officials largely relied on people’s declarations that they had lost their job due to Covid-19, and that they resided in the State, when processing claims.

“The department did not attempt to verify the ‘genuinely seeking work’ aspect of PUP eligibility criteria in 2020 other than to establish a dedicated telephone line for reporting of such cases by employers,” the report said.

This tip line resulted in 2,500 reports from employers, which led to 400 claims being stopped.

Officials conducted a number of checks asking people to confirm they were still eligible for the payments throughout the pandemic, the report said.

This resulted in more than 65,000 payments being cut off, as people either did not respond, or closed their claims themselves.

The report said the department had identified €14.5 million in PUP overpayments by the end of August 2021, related to 4,300 claims.

The C&AG recommended the department should review PUP cases as people moved into employment, or onto other welfare schemes, “to ensure all overpayments are captured”.

The report said “analysis of overpayments detected, including sectoral trends, should be used to inform retrospective reviews, where appropriate, of claims that have already been closed”.

The C&AG found there was also a risk of irregular payments to people who could not work due to being Covid-19 positive or medical certified to self-isolate or restrict their movements because the Department of Social Protection did not check their PRSI contribution history before paying claims under the enhanced illness benefit scheme. There was €57 million paid out under the scheme in 2020.

Overall, the C&AG found that total direct spending on Covid-19 in the first year of the pandemic up to February 28th, 2021, amounted to €17.1 billion. Some €11.1 billion of this was paid out in welfare supports through the Department of Social Protection, including €6.1 billion on PUP payments, €2.7 billion on the temporary wage subsidy scheme and €2.1 billion on the employment wage subsidy scheme.

Covid-19 spending by the Department of Health topped €2.7 billion in the year, including €920 million on personal protective equipment, €600 million on supports for hospitals and nursing homes and €292 million testing and tracing.

The C&AG was critical of the Department of Enterprise, Trade and Employment for paying out €633 million in grants to small and medium businesses towards the costs of reopening during the Covid-19 pandemic without verifying, either by the department or checking with the local authority, whether they were eligible for the scheme.

To be eligible, businesses had to have lost 25 per cent of their turnover or more, show an intention to retain staff on the Covid-19 wage subsidy scheme and commit to open for business or to reopen.

The C&AG said there was no assurance that all businesses who received grants met these criteria or that they received the level of payments to which they were entitled.

The department is commissioning an independent audit of the scheme that will include examining whether eligibility criteria has been complied with.

“However, this may be difficult given that the department did not specify the type of proof that may be sought from the claimant,” said the C&AG report.