Up to €660m per year may be lost to welfare fraud

WELFARE REVIEW:AN ESTIMATED €660 million a year is lost to social welfare fraud or error, the secretary general at the Department of Social and Family Affairs said yesterday.

Bernadette Lacey told the Dáil Public Accounts Committee that an average rate of 3 per cent of payments a year was lost across all welfare categories.

However Ms Lacey said she expected fraud and error to be reduced by new controls and as a result of surveys being carried out by the department.

This year the department would carry out fraud and error surveys on two schemes which carried the highest level of fraud at 7 per cent: disability allowance and one-parent family payments.

Officials from the Department of Social and Family Affairs were before the committee yesterday to respond to concerns raised in the 2008 annual report of the comptroller and auditor general regarding overpayment and fraud in welfare payments.

Labour’s social and family affairs spokeswoman Róisín Shortall criticised the frequency of these surveys.

The 11 surveys between 2003 and 2008 showed “very high levels of fraud” and it was “false economy” not to increase them, she said.

Ms Lacey said however that each survey took three months and was a huge investment of manpower. Some 600 people worked on the fraud and control side. Ms Lacey added non-Irish claimants of child benefit had been identified as a “high-risk” potential for fraud.

Of the 66,000 non-Irish EU citizens claiming child benefit, some 5,500 were claiming benefits for children living abroad to which they were entitled, she said. Some 31,000 non-EU citizens were also receiving benefits for 65,000 children living in Ireland.

The committee also heard that one in six “tip-offs” from the public helped to identify welfare fraud or error.

There were some 7,000 such reports from the public last year.

The committee also heard that 95 per cent of employers were PRSI compliant in 2008, this fell to 89 per cent in 2009.

Ms Lacey described this 6 per cent change as a “very big jump” and something on which the department would be focusing.

It compared with rising levels of PRSI compliance since 2005 which peaked in 2007 at 96 per cent.

Last week a report by the committee advised that company law should be changed so that directors who wilfully avoided the payment of PRSI contributions could be made personally liable.