Social welfare overpayments cost €50m a year

SOCIAL WELFARE overpayments of almost €140,000 a day were made in the five years from 2004 to 2008, according to figures released to Fine Gael spokeswoman Olywn Enright.

The figures show €50 million a year in overpayments or €250 million in total for the five-year period.

Ms Enright said that rather than considering cutting child benefit and other welfare payments, Minister for Social and Family Affairs Mary Hanafin would be better served achieving her fraud control savings targets, “allowing critical funds to be spent elsewhere, where they are really needed”.

Remarks by the Fine Gael spokeswoman follow the announcement last week by the Minister that social welfare fraud measures resulted in €228 million in savings this year.

Ms Hanafin also said there had been a huge increase in cases of suspected welfare fraud being reported by the public – up to 2,581 in the first half of this year, compared with 362 for the same period last year.

Ms Enright said, however, that the Minister had set a target of €600 million in savings this year, which meant €300 million for the first six months, but she had fallen short by €70 million.

She said that “sloppy practices at Ms Hanafin’s department allowed an average of €50 million each year to slip unnoticed off the books. This exorbitant rate of over-payment, which comes at huge cost to the taxpayer, could have been used in myriad ways.

“To put it into perspective, the money inaccurately paid last year alone could cover the cost of more than 30,000 full medical cards and pay for the cutbacks at Crumlin hospital five times over. It could also retain 1,550 of the 2,000 special needs assistants an Bórd Snip Nua recommended should be cut.”

She said there were clearly “serious operational problems within the department in the processing and management of claims. What’s more, the recent surge in social welfare claims and the subsequent pressure on staff is likely to lead to an increase in potential errors.”

Overpayments are recovered either through a single payment, regular periodic payments, deductions from existing welfare payments or through civil proceedings.

The figures show overpayment in 2004 of €56.274 million, which dropped to €45.435 million in 2005 and €45.09 million in 2006. the following year it rose to €49.127 million and up to €54.473 million last year.

Ms Enright had asked the Minister the level of overpayments for each scheme from 2004 to 2008.

In her reply the Minister said that a new debt management strategy was developed in 2006 for the department whose overall goal “is to actively pursue the recovery of debt to maximise recovery levels, with due regard to value for money and with particular emphasis on recovery from people no longer dependant on welfare payments”.