Committee Reports::Report - Appropriation Accounts 1984::15 March, 1988::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


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APPENDIX 14

SOCIAL WELFARE FRAUD

31 March, 1987

Clerk of the Committee,

Committee of Public Accounts,

Leinster House,

Dublin 2.

(1) Use of Birth Certificates as Evidence of Age.

(2) Financing Social Insurance Schemes.

(3) Cost of Computerisation.

At the Public Accounts Committee hearing on the Appropriation Account for this Department for the year 1984 certain additional information was requested by individual members of the Committee.

I enclose a note setting out the information requested.

J. Downey,

Secretary

An Roinn Leasa Shóisialaigh,

(Department of Social Welfare).

USE OF BIRTH CERTIFICATES AS EVIDENCE OF AGE IN CHILD BENEFIT CASES

1. At the meeting of the Committee dealing with the Appropriation Account for 1984, additional controls which the Department had implemented to eliminate any scope for abuse in the Child Benefit schemes were outlined.

2. One of these measures concerned allowing Birth Certificates only to be used as evidence of age rather than Baptismal Certificates also as heretofore. As a consequence of this change some members of the Committee asked that consideration be given to extending the time limit for application for Child Benefit from 3 to 6 months.

3. The matter has been examined in the Department and the indications are that the change is not causing any problems or hardship for claimants.

4. Claimants are advised, both on claim forms and in the Department’s information Booklets, to make application for Child Benefit within the statutory 3 months after the month in which the child is born, even if difficulties exist in getting a Birth Certificate. Where a claim is made within the statutory period there is no loss to the claimant, even if evidence of birth and age are not furnished at that time. When the certificate is eventually submitted the claim is decided with no loss of benefit to the claimant.

5. Births are registered within days and once registered, copies of the entry are immediately available from the local Registrar of Births for the area in which the child is born. Because baptisms can often take place quite a while after the child is born, in many cases the Birth Certificate will be available even in advance of the Baptismal Certificate.

6. The change in procedure, therefore, does not appear to be creating any hardship for claimants. At the same time, it affords an additional element of control in relation to the Child Benefit scheme. In the circumstances, it is not considered that there is any reason to extend the time limit for claiming benefit because of the use of Birth Certificates only.

Note on the financing of social insurance schemes

1. In its administration of the statutory income maintenance services, the Department of Social Welfare makes two broad categories of payments — social insurance and social assistance.

2. Entitlement to a social insurance benefit depends on social insurance (PRSI) contributions having been paid and certain contribution conditions being satisfied.

3. The schemes of social assistance apply to those who do not satisfy the conditions for receipt of social insurance benefits or who have exhausted their entitlement to those benefits. A basic condition for receipt of social assistance is generally that the means of the applicant do not exceed a certain limit. (There are however some assistance schemes which are universal and do not depend on a means test, e.g. Child Benefit scheme and Free Travel scheme.)

4. A list of the main assistance and insurance schemes is set out in the table attached.

5. A significant difference between social insurance and social assistance lies in the method of financing.

6. Social assistance is financed almost entirely out of general taxation and is provided for in the annual Social Welfare Vote.

7. Social insurance benefits on the other hand are paid directly out of the Social Insurance Fund. The cost of administering the social insurance schemes is also a charge on the Social Insurance Fund.

8. The statutory basis for the establishment of this Fund is Section 122 of the Social Welfare (Consolidation) Act, 1981. It is funded by way of—

(a) PRSI contributions of employees and employers

Section 9 of the Act provides for the payment of PRSI contributions directly into the Fund for the purposes of paying benefits.

(b) Interest on investments

Interest on investments arises because the flow of PRSI contributions throughout the month/year is not consistent and at times where receipts are not immediately required for the payment of benefit the Act provides for the investment of such income. The Investment Account of the Social Insurance Fund is managed by the Minister for Finance.

The income of the Fund from PRSI contributions and investments is never sufficient to meet the cost of the social insurance schemes and Section 122 of the Act provides that the amount by which the income of the Fund for any financial year is less than its expenditure shall be paid out of monies provided by the Oireachtas. This State grant is provided by way of Subhead E of the Social Welfare Vote and is the only element of voted monies in the social insurance schemes.

For 1985, the total expenditure on social insurance benefits and administration was £1,234m. Of this amount, £589m. was provided by way of employers’ contributions, £284m. was paid by employees, £2m. approximately came by way of interest on investments leaving a balance of £359m. to be provided by way of Exchequer subvention via Subhead E of the Vote.

Section 122 of the Act also provides for the examination and certification of the accounts of the fund by the Comptroller and Auditor General and for the laying of a copy of the accounts of the Fund together with the report of the Comptroller and Auditor General before each House of the Oireachtas.

Occupational Injuries Insurance

The Occupational Injuries Fund is a fund corresponding to the Social Insurance Fund for the payment of benefit to insured persons who are injured in the course of their employment or who contract prescribed occupational diseases. The relevant statutory authority for the Fund is Section 67 of the Social Welfare (Consolidation) Act, 1981. Like the Social Insurance Fund the cost of administering the benefits is borne by the Occupational Injuries Fund.

The income of the Occupational Injuries Fund is provided by employers contributions and income from investments — there are no employees’ contributions nor is there any State grant to the Fund. Expenditure from the Occupational Injuries Fund on benefits and administration in 1985 was £27m.

The accounts of the Occupational Injuries Fund are also examined by the Comptroller and Auditor General and the accounts and his report thereon are laid before each House of the Oireachtas.

ASSISTANCE SCHEMES	SOCIAL INSURANCE SCHEMES	OCCUPATIONAL INJURIES SCHEMES
Unemployment Assistance	Unemployment Benefit	Injury Benefit
Widow’s and Orphan’s Pension (Non-Contributory)	Disability Benefit	Disablement Benefit
Deserted Wife’s Allowance	Widow’s and Orphan’s Pension (Contributory)	Death Benefit
Prisoner’s Wife’s Allowance	Maternity Allowance
Unmarried Mother’s Allowance	Invalidity Pension
Single Women’s Allowance	Deserted Wife’s Benefit
Old Age Pension (Non-Contributory)	Retirement Pension
Blind Pension	Old Age Pension (Contributory)
Rent Allowance	Death Benefit
Family Income Supplement
Supplementary Welfare Allowance

COST OF COMPLETING THE COMPUTERISATION OF THE DEPARTMENT

1. Current Phase

The current phase of computerisation aims to provide some computerised support for all areas of the Department. While most schemes have an element of computerisation there is still some way to go before all functions are either supported or automated through the use of computers. The pace at which this progresses will depend on the resources made available to the Department.

The strategy in the current phase is to treat each system as a separate entity for ease of development and to minimise disruption to other systems and work areas of the Department during the change-over process. However, according as computerisation progresses it is intended to consolidate these systems into one information base as time and resources permit.

The estimated cost of providing computerised assistance in the remaining areas of the Department is £11.2 million over the next 3 years. This excludes the running costs or the expansion of existing systems.

The following is a summary of the work proposed in the current phase and the estimated cost for each area:—

Employment Exchanges

Limited computer assistance has been provided in certain Dublin Employment Exchanges to assist in the computation and payment of claims. The development of a full claim processing and payment system is planned and given the necessary resources could be implemented in exchanges throughout the country over a 3-4 year time-frame. This system would enable the Department to give a better service to the public, provide support for the proposed regionalised structure, and allow the implementation of improved accounting and control procedures.

Expenditure of £3.5m would be incurred over the next 3 years.

Telecommunications Network

The installation of the countrywide telecommunications network to support the Employment Exchange system is an essential part of the current phase. This network will also provide access to the Department’s computerised information system and thus provide information on all claims on computer at local level for the Departments offices and other agencies such as AnCO, Health Boards etc. This would cost £2.5m.

Book Personalisation

This system will produce books of orders which will have personal details i.e. name, address, rate, office of payment, printed on each order as opposed to the cover of each book at present. In addition each order will have an encoded line (like cheques) which will allow the reconciliation of each individual order. There will also be special security features (watermarks, security print/ink) on each order. The introduction of more secure orders will help eliminate unauthorised production and encashment and through the reconciliation system detect irregular cashing of orders and provide up-to-date management and accounting information.

A sum of £.5 million will be required for hardware and software development. There will be an ongoing running cost for the production of the personalised orders.

Central Records

The initial phase of a 5 year development plan to redesign this system is now underway. What is proposed is that this system will be a central source of information on the insured population and all other Social Welfare claimants for the Department and other Government agencies.

While a certain amount of this information is currently held on various systems in the Department both manual and computerised, the integration and standardisation of all the systems, and setting of standards and guidelines on who can access, update and change the information on the central system is a key issue in the development and implementation of the redesigned system.

The total cost including hardware and software and development is expected to be in the region of £4 million.

Accounts/Personnel

A computerised bank reconciliation system involving over 5 million cheques per annum has been implemented and further development aims at the installation of full accounting, statistical and personnel systems.

The hardware, software, and consultancy will cost £.7 million.

2. Next Phase

The next phase will be to consolidate the various schemes and enhance and modify existing systems in line with the development of the redesigned Central Records system, and the use of technology by outside agencies e.g. Banks and An Post. It is not possible to cost this effort at this stage.