Welfare overpayments up 65%

The Department of Social Protection recorded welfare overpayments of €83.4 million last year, with as much as 31 per cent of this classified as fraud, according to the Comptroller and Auditor General's annual report,annual report.

The level of recorded overpayments is up 65 per cent since 2007. Over the same period, overall social welfare expenditure has risen by 30 per cent.

Between 2007 and 2010, the value of fraud-related overpayments recorded each year fluctuated between €21 million and €26 million.

Last year, some €26 million or 31 per cent of all overpayments recorded were classified as fraud.

From 2007 to the end of December 2010, just 25 per cent of overpayments recorded had been recovered, the report reveals. During that period the total value of overpayments due for recovery increased from €211 million to €315 million.

Last year, over half of all recoveries made were through deduction from welfare payments. The balance was obtained either through direct payments from claimants or from the estates of deceased claimants.

The aggregate value of overpayments recovered by the Department in 2010 was €34.5 million. Of this,  €19.7 million was collected through deductions from payments to which claimants were currently entitled. A further €7.2 million was recovered through direct payments of non-contributory State Pensions overpayments, while €7.6 million was recovered by way of direct payments from claimant

Over the period 2007 to 2010, about 6 per cent of overpayment debts were written off. Write-offs of debts last year totalled €8.5 million. In addition, 1.3 per cent of overpayments were cancelled following appeals.

The department said its ability to recover overpayment debts through benefit reductions was "limited." It said that since the current weekly rate for Supplementary Welfare Allowance is just €2 below most welfare payments, in many cases this is the most that can be recovered.

Overall, between 2 per cent and 3 per cent of cases classified as fraud are referred for prosecution with most of these focused on cases involving high value overpayments.

The report shows that the number of criminal prosecutions against welfare payment recipients finalised in court increased between 2007 and 2009. However, it dropped by 29 per cent last year to just 246 prosecutions.

Referring to the small number of cases taken over deception, the accounting officer said it was neither practical or cost beneficial to prosecute every case of suspected welfare fraud. Almost two-thirds of the cases decided last year resulted in fines being imposed. The average fine was just over €875.

In addition to proceedings against welfare recipients, seven employer-related cases were finalised in 2010, the report shows. One of those convicted received a prison sentence while in four other cases; fines averaging just under €1,040 each were imposed. The two other cases were struck out.

The department has pursued 103 civil proceedings between 2006 and 2010. Positive outcomes were achieved in 55 of these cases with lump sum settlements resulting in the recovery of total debts amounting to €196,720.

Minister for Social Protection Joan Burton last week announced a welfare fraud initiative which aims to achieve savings of €625 million next year. Central to the scheme is a detailed fraud control plan placing greater emphasis on inter-agency co-operation at national and local level. Other aspects of the initiative include greater presence of social welfare inspectors on the ground, targeting sectors where fraud is more likely to occur and examining new ways to recover overpayments.