PRSI non-compliance doubles

The number of employers who are not compliant with PRSI payments more than doubled last year, the Dáil Public Accounts Committee (PAC) was told today.

While 95 per cent of employers were PRSI compliant in 2008 this fell to 89 per cent in 2009, Bernadette Lacey secretary general at the Department of Social and Family Affairs said.

She described this 6 per cent change as a “very big jump” and something that the department would be focusing on. It compared with rising levels of PRSI compliance since 2005 - peaking 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 avoid the payment of PRSI contributions to the exchequer can be made personally liable.

Officials from the Department of Social and Family Affairs were before the committee today to respond to concerns raised in the Annual Report of the Comptroller and Auditor General 2008 regarding overpayment and fraud in welfare payments.

Ms Lacey said she expected fraud to be reduced by new controls and as a result of surveys being carried out by the department. An estimated €660 million per year was lost to fraud or error with an average rate of 3 per cent across all welfare categories, Ms Lacey said.

This year the department will 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.

The department had undertaken to carry out two fraud and error surveys per year on the schemes that had the highest potential for fraud - jobseekers' allowance, one-parent family payment, disability allowance and child benefit, she said.

Labour spokeswoman on social and family affairs Róisín Shortall was critical of 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.

However, Ms Lacey said each survey took three months and was a huge investment of staff resources. Some 600 people worked on the fraud and control side, she said.

Ms Lacey said non-Irish claimants had been identified as a high risk category for child benefit claims. Some 66,000 non-Irish EU citizens claim child benefit (over 5000 of these are for children outside the State) and some 31,000 non-EU citizens claim child benefit in Ireland, she said.

Claims are made for some 8,800 children who live in other EU countries, and these are verified by contacting local social security offices in other countries, she said.

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.

Responding to questioning from Ms Shortall, officials said they did not cross-reference child benefit payments with maintenance orders issued through the court service.