Welfare control 'to save €645m'


Social welfare control and fraud prevention measures last year will lead to projected savings of €645 million, the Department of Social Protection said today.

Minister for Social Protection Joan Burton said the level of savings were in excess of the €540 million target for 2011 and showed the Government’s “commitment to tackling fraud and abuse of the social welfare system”. It is unclear what proportion of the savings were due to the removal of overpayment errors or to fraud.

The figures were questioned by a prominent social justice campaigner, who said reports had already shown that most of the overpayments made in welfare areas were due to errors.

The savings announced today are control rather than actual savings and are calculated on the basis of savings last year and subsequent years if the error or fraud had not been identified. The control saving is a calculation of how much the department would have spent in future years had the review not detected overpayment or fraud.

The Minister said some 16,920 people made anonymous reports of suspected welfare fraud last year, up from 6,429 in 2009 and 12,640 in 2010. In 2005, just 621 anonymous reports were received, indicating that the tolerance for breaches of social welfare payment rules has dropped, perhaps due to the recession.

Some 7,430 reports made to officials in 2011 were about people who, the informants claimed, were receiving unemployment benefit while continuing to work.

More than 2,000 other tip-offs relating to suspicions about concurrent working and claiming were received last year: the figure was 5,350 in 2010.

Reports relating to alleged breaches of the cohabitation rules for single parents (a claimant must not live with a partner if they claim to live alone) numbered 4,470 last year – a jump of 930 from the 3,540 reported in 2010. Reports relating to employer issues rose from 380 in 2010 to 490 last year.

Officials from the Department of Social Protection reviewed some 982,000 individual claims for social welfare payments last year. Their reviews of one-parent family payments accounted for almost €167 million in savings, followed by savings of almost €142 million in pension payments and over €92 million in relation to illness payments.

Savings in jobseekers claims resulted in savings of €82 million following a review of more than 222,000 cases. An examination of more than 392,000 child-benefit payment claims resulted in savings of €88 million.

Fraud and error rates tend to range from 1 per cent in cases involving the State contributory pension to 3.1 per cent with the jobseeker’s allowance.

A fraud rate of 12 per cent was discovered recently following an investigation of welfare payments to people suspected of not being resident in the State, the department said.

Almost 600 such payments were terminated as a consequence of home visits and interviews by departmental inspectors during the first 11 months of last year, saving the exchequer some €6.33 million.

Email is the preferred method of alerting the authorities to alleged social welfare offences, with more than 10,000 electronic messages sent in 2011.

Criminal prosecutions may be taken against persons who defraud the social welfare payments system and employers who fail to carry out their statutory obligations.

In cases where serious or protracted social welfare fraud has occurred, a file is either referred to the Chief State Solicitor’s Office or Director of Public Prosecution for criminal prosecution.

Last year, 270 cases were referred for possible prosecution under the Social Welfare Act. The department sent 174 cases to An Garda for prosecution under the Criminal Justice Act.

Director of Social Justice Ireland, Dr Seán Healy, said a claim that fraud prevention resulted in savings of €645 million were "not supported by the evidence".

He said the most recent study conducted on this issue showed that "more than three quarters of the savings came from correcting errors made by staff in calculating people's entitlements".

The study, entitled Tackling Social Welfare Fraud was published by the Oireachtas Library & Research Service on October 13th, 2011.

It concluded that only 21.1 per cent of over-payments in the social welfare system were due to fraud, Dr Healy said. Some 69 per cent of overpayments in 2009 and 2010 were due to error, that report found.

"There is no justification for misleading statements that present many of Ireland's poorest and most vulnerable people as fraudsters when the facts clearly don't support such a claim.”

Research and policy analyst with Social Justice Ireland, Michelle Murphy, said: "The vast majority of any over-payments in the welfare system are not caused by fraud but flow from mistakes made by people filling out forms or by the Department's staff who are under huge pressure as their workload has increased dramatically.”

The Minister told the Dáil last November that control savings are "not actual moneys recovered by the Department, but they are a good indication of the increase in social welfare expenditure that would occur without these control activities taking place".

"They are, therefore, an estimate of future expenditure avoided."