Former welfare recipients told overpayments will be seized

The Department of Social Protection has started to send letters to hundreds of former welfare recipients demanding payment of outstanding debts within a 14-day deadline.

Under new powers available to the department, it may seize outstanding sums of money from individuals’ bank accounts or their employers’ pay cheques.

It is estimated that authorities are owed about €350 million by welfare recipients who were either overpaid by mistake or who made fraudulent claims.

The letters from the department’s debt recovery unit warn former welfare recipients that it is in their interests to pay up to avoid officials contacting their bank or employer. The 14-day deadline for payment is likely to spark controversy given that, in some cases, outstanding amounts are likely to be significant.

Overpayments made by the department are typically recovered through deductions to a person’s welfare benefits over a period of time. But some recipients who returned to work, after a short period in receipt of benefits, say they were given no option of repaying overpayments after they ceased drawing benefits.

In a statement, the department said it had a responsibility to pursue all overpayments to protect public money.

"People who have received an overpayment from the department have a liability under law to refund the amounts involved," it said. "They have received monies to which they were not entitled."

'New powers'
It said provisions in the Social Welfare and Pensions Act 2013 allowed for the use of attachment orders to recover overpayments. "These new powers were introduced to improve the department's ability to recover from individuals who are no longer dependent on social welfare and who are not repaying their debt," it said.

When asked about the 14-day deadline, the department said it envisaged that over time all customers who owe a debt will be contacted to ensure they make “reasonable efforts to repay the debt”.

“We will discuss an appropriate repayment arrangement with due regard to the circumstances of each individual case,” it added.

The department is under pressure to secure as many savings as possible, targeting overpayments and fraud and has budgeted on recovering an additional €30 million this year. The get-tough stance on overpayments is aimed at former recipients. But other powers allow the department to deduct significant sums from existing recipients. Officials may deduct up to 15 per cent of a person’s welfare entitlement without their agreement under measures introduced in 2012.