Committee Reports > List of Committees > Dáil > 1990 > Committee of Public Accounts > Final Report - Appropriation Accounts 1988

AN COISTE UM CHUNTAIS POIBLÍ

(Committee of Public Accounts)

Déardaoin, 8 Márta, 1990

Thursday, 8 March, 1990

The Committee met at 11 a.m.

Members Present:

DEPUTY G. MITCHELL in the chair

Mr. P. L. McDonnell (An tArd Reachtaire Cuntas agus Ciste) called and examined.

VOTE 42 — SOCIAL WELFARE.

Mr. E. McCumiskey (Secretary, Department of Social Welfare) and Mr. M. Guilfoyle (Principal, Department of Finance) called and examined.

Chairman.—The Committee of Public Accounts of Dáil Éireann are this morning examining Mr. Edward McCumiskey, Secretary of the Department of Social Welfare, in his capacity as Accounting Officer for that Department, on the Appropriation Accounts for 1988. It is Mr. McCumiskey’s first appearance. You are very welcome, Mr. McCumiskey. We will turn to the paragraphs. Paragraph 57, the Comptroller and Auditor General reads:

Central Records System

Benefit expenditure from the Social Insurance Fund was approximately £1.3 billion in 1988. The basic conditions for entitlement to benefit include a requirement to have a minimum number of paid contributions and to have a specific number of contributions paid or credited in the governing contribution year. Credited contributions (credits) are awarded by the Department of Social Welfare (DSW) in respect of periods of disability or unemployment.

Since 1979 the contribution records of insured persons have been maintained by DSW on a computerised central records system. Most of the contribution data recorded is provided by the Revenue Commissioners who collect PRSI contributions on behalf of DSW and transmit them together with contribution details in respect of employed persons to DSW. The other main source of such data for the system is the credits awarded in individual cases. Data regarding claims to Social Insurance benefits is also recorded on the system.

Since the information recorded on the central records is used to establish whether the contributon conditions for entitlement to benefit have been fulfilled by persons claiming benefit, it is vital that such information be as complete and accurate as possible.

Following a comprehensive examination of the system carried out by my staff in 1988 a detailed report on the system was sent to the Accounting Officer for his observations. Arising out of this examination I sought information on the measures taken or proposed to eliminate deficiencies referred to in that report and I also sought the observations of the Revenue Commissioners on these matters because of their involvement in the data collection and transmission stages of the process. The following four paragraphs refer to the main deficiencies which came to light.

Paragraph 58 of the Report of the Comptroller and Auditor General reads:

The system provides that the Revenue Commissioners transmit to DSW details of contributions collected in respect of each insured person but it was noted that the information furnished was frequently incomplete, e.g. absence of RSI numbers, with the result that DSW have been unable to identify the persons to whom the contributions should be credited. Consequently, an unprocessed emergency file of such cases comprising 1.3 million items has built up in DSW of which approximately 143,000 related to 1987/88.

Furthermore, while the Revenue Commissioners’ computer system includes a facility which enables them, on the basis of earnings and contribution class, to make an accurate estimate of total PRSI contributions due for each employee and thereby establish whether an employer has paid over the correct total of PRSI contributions in respect of all employees, such an exercise had not been carried out since 1983.

It was also noted that there was no procedure for ensuring that all relevant information was being transmitted by the Revenue Commissioners to DSW and on one occasion, failure to transmit a computer file containing 125,000 records was only detected when it emerged that 20% of new claims to benefit did not have the relevant contribution information on file in DSW.

The Accounting Officer explained that the problem of identifying insured persons’ contributions went back to the adoption of a single number for tax and social insurance purposes in 1980 when about two million social insurance, reference numbers had to be changed to facilitate the administration of the new PRSI system. He pointed out that, in spite of all the difficulties which had to be overcome, the existing central records system was a considerable improvement over the old methods and highlighted areas requiring additional controls and systems which were not possible previously.

In regard to the transmission of incomplete information from the Revenue Commissioners, the Accounting Officer of DSW agreed that contributions in some cases could not be readily assigned to individual contributors, with potential consequences for future benefit claims. He stated, however, that many cases were subsequently resolved following reviews and he pointed out that for the 1987/88 contribution year 45,000 unidentified cases had RSI numbers assigned to them following review.

He also stated that cost effectiveness considerations arose in deciding on the efforts to be made to determine the degree of accuracy of the total PRSI collection and the extent to which this could be done was therefore governed by priorities within the Revenue Commissioners. However, quite apart from this, DSW was continuously monitoring the performance of the PRSI system through an analysis of the problems arising at claim authorisation stage and by inspection of employers’ records.

He informed me that the systems used to monitor the transfers of contribution details from the Revenue Commissioners to DSW were being improved to reduce the scope for clerical error. Under the new system an advice slip would be sent separately and this would highlight any breakdown in the tape transfer arrangements.

I am awaiting the observations of the Revenue Commissioners on these matters.

Mr. McDonnell.—Paragraph 57 is really in the nature of an introduction to the following four paragraphs. They deal with different aspects of the results of a major audit which we did on the central records system in the Department. The central records system, if I could define it very briefly, is ultimately intended to be an identikit of each insured worker’s contribution record and claims’ record, but I realise that, perhaps, it has not reached that advanced stage of development yet. As well as recording contributions paid, it also records details of what are known as credits which are awarded, for example, for periods of sickness or unemployment, so that an insured worker will not lose out when claiming benefit later on. The results of this major task which we undertook were contained in a very detailed report of about 80 pages, which was sent to the Accounting Officer and we had correspondence with him about it. He agreed, before my report went to print, that the following four paragraphs were a reasonable distillation of the main facts in that report. I am sure the Committee will agree that the accuracy and integrity of the data, which are maintained on the central records system for each insured person, are central to the whole process of paying benefit from the Social Insurance Fund. You will see at the beginning of paragraph 57 that I give an indication, in financial terms, of the scale of activity involved in this exercise. The figure of £1.3 billion, incidentally, does not include any element of social assistance.

Having said that, Chairman, I will come straight into paragraph 58, which is the first instalment of the features which we raised. You will see in paragraph 58 that the Revenue Commissioners have responsibility for the collection of the vast majority of PRSI contributions. Contributions which are collected are passed over to the Department more or less as they are received. The details of who contributed what is not sent until after the end of the tax year, when Revenue are in a position to give those details, having got the appropriate information from the employers.

In paragraph 58 there are three main concerns. Firstly, we noted that there was a huge file of unidentified contribution data which had built up in the Department over a number of years and, obviously, this would have potential consequences for claimants to benefit. This happened because the Department of Social Welfare were unable, on the basis of the information which had been supplied to them by the Revenue Commissioners, to associate contributions collected with the records of individual insured persons. Apart from the obvious difficulty which I mentioned a claimant might have, I would imagine, too, that there would be a fairly large element of administration expense involved in sorting things out later on.

As you see, the Accounting Officer for the Department traced the origin of this back to the adoption of the single RSI number in 1980, and I understand that the Department have fairly wide-ranging proposals to try to gradually minimise, if not entirely eliminate, this problem. Another contributory factor, which the Accounting Officer for Revenue referred to when he replied recently — and you will see at the end of the paragraph that at the time this went to print I did not have his response — was that data is transmitted to the Department of Social Welfare before errors have been identified and corrected. He said that this is done in the interests of providing the data as quickly as possible and that the corrections are made later. This helps to reduce the unidentified contributor’s file but, nonetheless, the file is of the size I say it is in the paragraph.

I said that there were three points and that is the first one, the file of unidentified contributions. The second point raised the question why the Revenue Commissioners ceased to use a computerised technique, which was there for identifying errors in the returns from employers. You will see also in the paragraph, Chairman, that the Accounting Officer for the Department of Social Welfare said that this was due to, if I could call it, competing priorities within the Revenue Commissioners but the Accounting Officer for Revenue said that when they were doing this particular check, they found that the cost of it did not justify continuing it. He said they had now adopted alternative measures for checking returns by employers. I am not sure if these alternative measures would meet with the approval of the Department of Social Welfare and whether they would see them as an acceptable alternative. That is the second point, the discontinuance of that programme.

The third point raised was the failure to detect that the Revenue Commissioners had for some reason omitted a complete file of data when sending the material to the Department of Social Welfare. I have been told that the procedures were revised in February 1989 to ensure that this would not recur and that there would not be any failure to detect an oversight or, indeed, failure to detect the loss of material in transit between the two Departments. I have gone on at length on that but there are these three points. It is the result of an exhaustive study we did and that is why there are three main points in paragraph 58.

Chairman.—Could you just summarise the second point again, Mr. McDonnell?

Mr. McDonnell.—The second point was the discontinuance by the Revenue Commissioners on a computerised programme which they had for identifying errors in the PRSI returns which they receive from employers. The Revenue Commissioners say that they did so because they found that when they were adopting this programme, when they were carrying through this they did up to 1983, they found that the results did not justify its continuance and they say that they have alternative methods of getting to grips with errors in the returns by employers.

Chairman.—Fine. We have a long way to go this morning and there are a number of very detailed paragraphs before we actually get down to facts and figures. On this particular paragraph, Mr. McCumiskey, benefit expenditure from Social Welfare Insurance Fund was approximately £1.3 billion in 1988. Was that the total amount spent by your Department in that year, or were there funds from other sources administered in that year also?

Mr. McCumiskey.—No, that would only represent the expenditure, as you say, from the Social Insurance Fund. We also pay non-contributory benefits that are not paid for out of the fund and are paid by the Exchequer. Total expenditure in that year would have been in the region of £2.5 billion.

Chairman.—Right. Regarding paragraph 58, the last line there says that consequently an unprocessed emergency file of such cases comprising 1.3 million items was built up in DSW of which approximately 143,000 related to 1987-1988. Why was that?

Mr. McCumiskey.—I think that I will have to explain to some little extent what exactly we are looking at here in relation to this expression “an emergency file of 1.3 million records”. That notation comes from a Revenue terminology. It simply means that the people concerned whose contributions we see on this file paid their income tax under the emergency rate. That meant that at the time they were paying the income tax they had not got a certificate of tax-free allowance or, in fact, an RSI number to give to their employer. I just wanted to say that there is no emergency in the normal sense of the word involved in this. These too are not records in the normal sense. They are not long insurance records full of contributions in respect of each individual. In fact, what we are looking at here are small amounts of contributions. The typical number of contributions on this file is about five and these are contributions paid usually by young workers, seasonal workers, part time workers who come into and out of employment rather quickly. They are taxed, as I said, under the emergency tax code, their contributions are collected and these are then forwarded to the Revenue Commissioners and forwarded to us. What happens then is that in many cases we simply do not have enough information to immediately associate these records with the person’s insurance record, if the person has a full insurance record. The common factor that is missing from all these records is, of course, the RSI number, so this makes it obviously very difficult for us to associate these records with others. Where there are addresses on these records we write to the people concerned and ask them for details of their RSI numbers and when we get these from them we can then associate these emergency records, as we call them, with the real records. We also write to employers and try to tidy it up that way. It is worth saying, too, that many of these small records represent again to the system in the sense that the contributions have been paid; but in many cases they do not actually represent a loss of benefit to the clients because when the clients enter insurance in the normal way they are given pre-entry credits which in any event would bring them into benefit very quickly. It is at that point in time when they do come to us claiming benefit that we can most readily identify these emergency records because the people will then point out to us that they worked with a particular employer at a particular time. That is just a description of what it is. It is a lot of data, small amounts of contributions which we retain in our system until such times as we can associate it with the client’s proper insurance record.

Chairman.—Surely the emphasis should be on the word “unprocessed” rather than the word “emergency”? Why were the 1.3 million items not processed? Why that magnitude?

Mr. McCumiskey.—I am not sure in what sense the word “unprocessed” was used. All this data is processed. It goes through many stages of processing, both in the Revenue Commissioners before it comes to us and with us when we get it. The data is sifted through as we get it. Very often we can find enough information in what we are given to do something with it immediately. Then we look for addresses. Sometimes we go to employers. We are also building up some quite sophisticated computer soft ware in an attempt to try to match this data, in so far as it can be done by machines, with our general body of insurance records. However, this soft ware is quite sophisticated and we are at the development stage with it. We are hopeful that that will settle many of these cases back into the proper insurance records.

Chairman.—Are you satisfied, Mr. McCumiskey, that, as a result of this, unidentified contributors did not lose their entitlement and do you know how many or do you have an estimate of the number of unidentified contributors there may have been in the particular year in question?

Mr. McCumiskey.—I am reasonably satisfied that this does not give rise to a loss of benefit, for the one particular reason that I mentioned, then when a claimant comes to us looking to us for insurance benefit and the claimant does not qualify for benefit, we will, in fact, tell the claiment why. We will say, for example “You did not have enough contributions in such and such a year”. The claimant will then give to us the information by saying that he or she did work with such an employer or worked in a certain supermarket for a certain number of weeks or whatever and in that way we can gradually pull in these unattached pieces of information. We continually process these things as the need arises and we will be doing more of it in relation to the new soft ware that we are developing.

Chairman.—The Revenue Commissioners’ computer system includes a facility to enable them to estimate, on the basis of earnings and contribution class, the total PRSI contributions due for each employee and thereby, according to the report, establish whether an employer has paid over the correct total of PRSI contributions. Such an exercise had not been carried out since 1983. Is it now being carried out? Have your Department been in discussion with the Revenue Commissioners and what steps have been taken to ensure that it is now carried out? I think the implication from the Revenue Commissioners was that the benefit involved did not justify carrying out the programme concerned. Given the following paragraphs which we are going to go into and the number of difficulties which apparently have arisen, surely the maximum amount of reconciliation possible should be done.

Mr. McCumiskey.—Yes, I would agree in the general sense that obviously the maximum possible amount of reconciliation should be done, However, there does come a point in all reconciliations of this nature where it is simply not cost-effective to do so. The Revenue Commissioners, if I understood correctly, have indicated that they did not find that this exercise was yielding sufficient results for the resources that they were putting into it. Of course, we are in continual discussion with the Revenue Commissioners. In fact, we have standing working committees that discuss and tease out all the various problems of this nature that arise.

Basically, over the years as working conditions have changed, as the nature of people’s insurance records tend to change with different types of work evolving, we found it better to change the emphasis on the type of controls that we actually exercise in relation to problems of this nature. We do put much emphasis on, for example, our inspectors making investigations, or visits to employers, to encourage them, first of all, to work the system properly and to encourage them to encourage their workers to produce proper RSI numbers when they do take them on. We find that this kind of activity is every bit as useful as some of the more overall processes that we had been using earlier on and which have been found basically not to be that cost effective.

Chairman.—I would like to ask you, Mr. McCumiskey, about the procedure for ensuring that all relevant information has been transmitted by the Revenue to your Department and, on the occasion referred to here, the failure to transmit a computer file containing 125,000 records. It was only detected when 20 per cent of claims to benefit did not reconcile with the records you had. Why did that arise and what has been done to ensure that this cannot happen again? Surely there should be a procedure for ensuring that all the relevant information is being transmitted. This is a very substantial amount of information to omit.

Mr. McCumiskey.—Yes, Mr. Chairman, it is a substantial amount of information. It is one of these hitches that can occur from time to time. What we have done about it, both at our end and at the Revenue end, is that we have ensured a very simple device of more effective numbering of the records that come. Records come to us on computer tapes from one computer site to the other. I understand it was a tape, or tapes, which we thought had come and which apparently had not come. We now have a more effective numbering system of these tapes. We also have a system of invoices whereby the invoices indicate what tapes have been sent and what tapes should have been received.

Chairman.—Is the advice slip sent separately? Is that what you are referring to there?

Mr. McCumiskey.—That is correct.

Chairman.—So that just tells you quite separately what has been sent to you on a computer.

Deputy M. Ahern.—In the first paragraph it is stated that there are 143,000 items referred to in 1987-88. I presume that there could be a lot of duplication of individuals in that 143,000 items. You could have a person working in three or four different places without an RSI number. It is only when a claim would be made then by a certain individual that you would find out that you could have him or her included three or four times within that unidentified grouping? So, you do not try to match anybody up until you get a claim?

Mr. McCumiskey.—In relation to the first part, yes, people turn up more than once in this emergency file, as it is called. In fact, it is probable that the 1.3 million does not represents a lot more than, perhaps, half a million people altogether. Similarly, in relation to the 143,000, it would not be 143,000 separate individuals. It is probably something in the region of half of that. As I described, the last, or failsafe, operation on these unrelated records is of course when the client claims benefit from us. We feel confident that at that stage the client himself or herself will remember where he or she worked and will give us the information to enable us to do this. But I would not like the Committee to think that we do not do anything about it until that stage. We actually do continuous processing on these things, in so far as we can.

Deputy Flood.—I am quite alarmed at what we have been discussing here this morning. It is an extraordinary situation that so many records are floating around between the Revenue Commissioners and Social Welfare without the RSI numbers. Basically, what we are saying here is that if a person claims entitlement he will first be told “No, you are not entitled” on the basis of the information that is available to the Department of Social Welfare. Then only when the person protests that he has, in fact, made contributions, based on remembering previous terms of employment, can the matter be checked out and things put right and the benefit paid to the person that is entitled to it. I find that an extraordinary and unacceptable situation. The relationship between the Revenue Commissioners and Social Welfare could only, in my opinion, be described as a complete shambles, going on the information that is provided to us here. I want to know, Chairman, on this total breakdown in communications and in record keeping, if we can have an assurance that it is now going to be brought to an end, that it is going to be rectified and that we are not going to have a repeat of this kind of report in our next and subsequent reports before this Committee. That is the first point I wish to make.

The second point I wish to make is that reference has been made that the cost does not justify checking or cross-checking. I do not think that that should enter into it either. The fact is we have got to get our record keeping right and correct and nowhere is it more important than in this whole area. To suggest that there are 1.3 million items unrelated and untabulated is, in my opinion, an extraordinary state of affairs. I am sure that there are people out there entitled to benefit who once they are told no would unfortunately accept that as being fact and will not proceed to claim. It is not their fault. I would say that it is just unacceptable and I want to know from the Accounting Officer what is going to happen to ensure that this desperate situation is not allowed to arise again.

In the 1987-88 year I note that 45,000 unidentified cases had RSI numbers assigned following review. That in itself is an extraordinary figure. Forty-five thousand, can you imagine. If any banking system or any major financial institution ran their business like that I am afraid they would certainly be out of business very quickly. We are dealing here with people who are in difficulties and who have need to do business with the Department of Social Welfare.

I would like to know what arrangements are now being made with the Revenue Commissioners to ensure that appropriate information is passed to the Department of Social Welfare. I would like also to make the point that these 1.3 million items seem to have built up over eight or nine years. That was even in times presumably, when the Revenue Commissioners had the sort of staff levels that they might feel they needed to conduct their business properly and effectively. It is not something that has emerged just because there has been a restriction in numbers in the Revenue Commissioners. As far as I know, additional staff have been allocated to the Revenue Commissioners and in that area are the staff being used to try to get to grips with this? My final point is: are we satisfied that the State has not lost any money in all of this?

Mr. McCumiskey.—Well, there were a lot of points raised here. I will try to take them one by one. The concern that insured persons are being denied benefit is, obviously, a concern to the Department, and we pride ourselves on the level of service we give and we put a lot of effort into this. The fact of the matter is, of course, that is a very high percentage of insured workers who claim insurance benefits qualify for those benefits and qualify for them at the maximum rate straight away,. I am not sure what the level is, but it is up in the 95 per cent level. I just want to dispel any impression that there are large numbers of workers coming to us and being denied benefit because of this. For the few who cannot qualify, because they do not satisfy the contribution conditions, we can tell them quite readily what contributions they have paid so that they can readily identify where the missing contributions are. There is, too, from the client’s point of view, a certain amount of self-help in relation to this. What we are looking at here are cases that have come through the system without any RSI number on them. The onus is on the worker to get his RSI number and to furnish it to his employer so that the employer can associate it with the contributions.

I might mention, too, that the absence of RSI numbers is not only an inconvenience but there is an actual cost, as has been mentioned, not only on the Revenue Commissioners but also on employers in relation to it because employers get a great many inquiries from us throughout the year in relation to missing RSI numbers. It is an ongoing process. We process these kinds of things continuously.

In relation to the question was the State losing money on this, I mentioned that there must always be an overhead in relation to any things of this nature, but the fact is that unlike the old system — before PRSI was brought in — with the stamped cards, where perhaps a person would not stamp a card at all, in these cases we are looking at situations where the contributions actually have been paid. It is simply that there is temporary difficulty in relating them to the insurance records, so in a sense the system is a gain.

In relation to the point about certain exercises being cost-justified, this was said in relation to the Revenue Commissioners. Obviously I must be hesitant about commenting in relation to another organisation, but it is a fact of life in any organisation that we live in times of economic constraints and we must look carefully at every exercise we undertake to do it in the most cost-effective way. We all have to live with that. What I tried to say earlier, and perhaps not too well, was that there is a whole range of things that we do to try to prevent this type of situation and, when it has arisen, to try to remedy it. There is a whole range of options starting right at the beginning with the advice and information we give to clients and to emloyers, to the exercise the Revenue Commissioners do, to what we do, to what our Inspection Branch do. We simply try to sort out from those things what is the best use we can make of our reserves to achieve this in the best possible way.

You mentioned too. Deputy, the relationship with the Revenue Commissioners. The Revenue Commissioners collect the PRSI contributions from employers all over the country, they then put them on their computers. They do a certain amount of processing on them and they are sent to us, after the end of each contribution year, in large numbers in what is known as the end-of-year records. However, all through the year, up to the time that our new benefit year comes into payment, they are continually sending us amendments and refinements on those records which are continually being processed and integrated into our record system. The connection between our two organisations is obviously very close in this whole area. I hope that I have addressed myself to most of the points.

Deputy Taylor.—I do not want to be repetitive of what has been said but I must admit that I am aghast at the material shown here. Perhaps I am naive, but it comes as a complete surprise to me, even after the number of years that I have been in politics, to find that this situation exists as between the Revenue Commissioners and the Department of Social Welfare. I had always assumed and, indeed, in my many dealings with the Department over the years, I always assumed, perhaps naively, that when information was given to me by the Department of Social Welfare as to what contribution conditions were, these could be relied on. In my opinion, what is disclosed here is nothing short of a scandal. It is quite outrageous. I just do not understand this reference to cost-effectiveness. Cost-effectiveness has no relationship whatsoever to this position, in my opinion. Cost-effectiveness, as I understand the term, is appropriate where one has a certain amount of money and one is considering whether it is worth while expending it for a particular purpose, whether it would produce a worth-while return, or produce worthwhile results, or something like that. This is a case where people have paid in money as part of an insurance scheme and where the benefits they are to get are dependent on their being credited for those. The question of cost-effectiveness does not arise. This is a question of people’s entitlements. The fact is that when a great many people refer to the Department of Social Welfare, examine their records and see so many contributions in 1977 and 1978, would just accept that and would not be in a position to go back and calculate how many weeks they worked or did not work in that particular year, perhaps two, three, five, seven years ago or whatever. They accept that as being right. This is just not acceptable. I could not accept it.

Paragraph 2 says that the Revenue Commissioners’ computer systems have the facility to run programmes showing what the entitlements are, but such an exercise has not been carried out since 1983. Why not? If they have the capacity in their computers to do that, why has it not been done since 1983? I want to know what steps the Department of Social Welfare have taken to insist that it be done and I want to know from the Revenue Commissioners and the Department of Finance representative who may be here, why with that facility and that capacity, it has not been done. I am quite certain that there must be thousands of families who literally have been deprived of what they are entitled to and what they paid insurance premiums to get. That situation runs into thousands and I am aghast that that position is presented to us and there is no programme laid on, or assurance to be given to the Committee now, that this is going to be tackled and rectified.

I do not think it is good enough to put the blame, or some part of the blame, on employers or on the unfortunate person who goes into work with new RSI numbers and so on. It seems to me that the Revenue Commissioners have the information for the most part. They have it on their computers, they could run programmes but they have chosen for some reason best known to themselves not to do it. Whatever resources are required to do that should be supplied to them. It is not cost-effectiveness, it is a matter of people’s entitlements.

Mr. McCumiskey.—Obviously, there is a very real concern here which has come up a number of times, that people may not be getting their entitlements because of this phenomenon. This is a concern that we share. Our examination of these records shows that the majority of the people seem to be young people, students, who are taking temporary work, short term, temporary, part time work as it were and who move into and out of the system so quickly that they do not register the proper RSI number. They are paying their tax, they are paying their PRSI, otherwise they would not be on our books at all.

Deputy Taylor.—But would it not also refer to contributory old age pensions for example? Would that not be relevant too, where contribution conditions would apply?

Mr. McCumiskey.—Well, eventually I presume students will get to the age where they will be claiming——

Deputy Taylor.—People who are now claiming contributory old age pensions, the contribution conditions will be a critical factor, the number that they had averaged out over the years and so on, old people with old age pension entitlement — would they not be affected here?

Mr. McCumiskey.—In theory they could be affected, but the system has, in any event, been here for just ten years. Our examination of these records so far has indicated that most of them are very short-term employments. As I said, the typical duration of an emergency record is just five contributions and it seems to me that despite the difficulties that may well be involved, if a person is applying for an old age pension there can and will be a very thorough investigation of that person’s insurance record and that person should well be able to remember, if the need arises, the employers that he or she worked with during the last ten years. Most of these records do not appear to be of that type of client, but simply of young people. I mentioned that when young people, and particularly students, join the labour market on a full time basis we do, in any event, give them pre-entry credits which would tend to compensate for any loss that they may have experienced here.

May I go on to say in relation to the cost-effectiveness that you mention, that what I was trying to convey was that in any exercise of this kind, we can only do so much. That is a fact of life. Our resources are limited and it is a question of judgment as to whether we are doing the right things. Over the years, as I mentioned earlier on, we have been watching this phenomenon and we can see that changes are going on out there in society, in the labour force, to which we need to adapt. One of our big concerns has been the whole question of RSI numbers. At present these numbers are allocated by the Revenue Commissioners because when the PRSI system was set up it was decided that the Revenue Commissioners would collect the contributions. So it seemed only appropriate at that time that they would continue to use their tax number which became the RSI number.

Arising out of this type of difficulty, we have in fact agreed with the Revenue Commissioners that the future for RSI numbers should be somewhat different from what it is at present. We will be making two major changes to the system. One is that we have agreed, in principle, with the Revenue Commissioners that the allocation of RSI numbers would be taken over by the Department of Social Welfare and we hope to get that going reasonably soon. A certain amount of computer changes are required in both our organisations to do this. Secondly, we are doing quite a clean-up, a thorough vetting of the whole RSI data base because there are references, as you will see in this report, to people having been issued with more than one RSI number during their lifetime. We need to clean that up and get all these various numbers linked with one another. Within the whole question of issuing RSI numbers, we envisage situations where we may have to issue RSI numbers to people before they actually enter the labour market. For example, we might consider issuing RSI numbers to students before they leave school.

Part of the problem at the moment is that people come in and out of the labour market fairly quickly. The system does not appear to be able to respond quickly to them, particularly if they do not take the initiative themselves, as they are required to, to go looking for their numbers fairly quickly. I want to make the point in relation to this use of resources that we are thinking about this and we do have plans. We are moving along the way of changing the emphasis that we are putting on various control procedures in a way that we hope will solve this problem over time.

Chairman.—Given this long discussion, we have a lot of paragraphs to go through.

Deputy Taylor.—Could we find out from the Department of Finance why, since 1983, the Revenue Commissioners have not run the programmes of which they are capable?

Mr. Guilfoyle.—I do not know why they have not run them. I presume that it was a judgment that the resources that would be necessary in order to run them could be better occupied in other quite important work that Revenue does. I cannot really pass a judgment on that myself. It is a matter of a managerial decision by the Revenue Commissioners, having regard to the kind of resources available to them and the value of actually doing it. I have not seen the details so I am afraid that is all I can say.

Deputy Taylor.—It seems to me that these programmes should be run. We are talking here about giving entitlements to people who have paid in money through the system and are not getting their entitlements to it because the Revenue Commissioners are not running this programme. They just run the programmes for tax and so on, for money coming inwards. They also have an obligation to run the programmes to give benefits to which people are entitled in the outward direction as well. It is not acceptable that they sacrifice the entitlements of people on the outside, many of whom would be in poor financial circumstances. I would ask, Chairman, that we consider taking this up with the Revenue Commissioners.

Chairman.—I shall ask the Revenue Commissioners for a written report as to what is being done in relation to this currently. Is that agreed?

Deputy Dennehy.—I have just one question. It is a point that has often come up and Mr. McCumiskey came very near to it in his final contribution. I think, up to now, the only thing that has prevented the assignment of some kind of ID number to everybody when born, literally, is the question of the “Big Brother” concept. People are afraid of this thing being tagged by the State. If you are going to go back — and it is logical to go back — to the point of pre-school leaving, why not go back further than that? The greatest problems arise every time the State changes its method of accounting or its method of identifying people; the difficulties are obvious. They are repeated a million times over.

The logical thing is to assign an ID to people, literally, when born. You are now talking about ID cards, school identification, about 20 different things, tax identification and so on. There is a whole range of things. People seem to be afraid of this. They say it smells of the “Big Brother” concept and they back away from it. Mr. McCumiskey is obviously moving towards that in suggesting that they might assign an ID before school age. I am saying that that is only part of the way forward and it can lead to other difficulties that we could foresee now if we want to. What would he think of the suggestion of assigning an ID immediately on birth?

Mr. McCumiskey.—It is a matter which, obviously, we have looked at and we have not come to any final conclusions on this. The reason I mentioned schoolchildren is because we have information on our Child Benefit file in relation to most children in the country. One of the disadvantages of giving a number to children at birth — quite apart from whatever the public perception of it might be, and this is something we would all have to think about — is that the person might go abroad as a child. Also, the family might move out of the country and possibly we would be holding more numbers and records than we would need. It has struck us that if we were to give a number to children, let us say just at the point before they leave school, we would have a better chance of giving out more useful numbers. Giving the numbers at birth, too, would require a degree of integration with the whole registry of births and that end of things. It is something we would want to look into. There may be technical problems involved in that.

Deputy Dennehy.—Could I just say that 1984 has come and gone and George Orwell made his forecasts and we should not worry too much about them. We have just come back from the UK where we discussed the difficulty faced by many elderly people who went to Britain and worked on building sites. I think the marital rate is about 10 per cent for those who worked on building sites and now find themselves drop-outs and so on. That is an extra reason for registering people, people who may be emigrating, particularly young people who go on this kind of trip.

We should be able to tag people. We should be able to identify our own people. There are one million people over there. We should be able to identify those. We have a responsibility and I would put that up as an extra reason for actually identifying them. Hopefully, it is something that will be considered and, as I say 1984 is gone, and the public will probably accept that concept now.

Chairman.—Perhaps we could ask the Comptroller and Auditor General to keep us advised on developments in these areas. We will get a note from the Revenue Commissioners and we will note these paragraphs for now. There are related matters in the following paragraphs. Paragraph 59 is probably the reverse of the situation.

Paragraph 59 of the Report of the Comptroller and Auditor General reads:

Although recognising that the deficiencies noted in the previous paragraph would call into question the completeness and accuracy of the information recorded in the central records, a review of the information as recorded was also carried out by my staff. This revealed a number of further deficiencies including the existence of dupicate contribution records and the failure to update to the correct records information on credits awarded to persons in receipt of unemployment benefit or assistance.

The Department’s system for the payment of disability benefit is also computerised and although the transfer of information from that system to the central records is automated, several instances were noted in which information regarding the existence of claims which were being paid did not appear on the central records, thus exposing the Department to the risk that duplicate claims or claims to other types of benefit might be inadvertently admitted to payment.

The Accounting Officer stated that the existence of duplicate records arose mainly where persons re-entered employment and in the case of women whose RSI numbers change on marriage. To overcome this difficulty agreement had been reached with the Revenue Commissioners on more secure methods for allocating RSI numbers and on procedures for dealing with the allocation of numbers to married women and these would operate from 1990 onwards. Under the revised arrangements DSW would allocate RSI numbers to all new entrants to Social Insurance and would apply extensive computerised checking to ensure that a number had not been allocated previously. In the meantime, DSW were currently using specially developed computer programs and techniques to identify and remedy the more obviously duplicated records.

The Accounting Officer informed me that the erroneous updating of information to records and the inaccuracy of the updating generally in the case of unemployment credits was being addressed by various temporary measures including the furnishing of printouts to each Employment Exchange for verification at source of the data being recorded. In the longer term, computer linkages which were being developed to register new claims and record credits would be implemented and, according as the computerisation of the unemployment payments system was extended to all offices, these developments were expected to eliminate the weaknesses adverted to.

While the Accounting Officer acknowledged that the differences between the information recorded on the central records and on the existing computerised disability benefit payment system was a known hazard he did not consider that the risk of incorrect claims being admitted to payment was significant as firstly, he contended that it was not possible to have two disability benefit claims in payment concurrently and secondly the drawing of another Social Welfare payment in conjunction with disability benefit would be unlikely as the claimant would be unaware of his status on the central records. However, as part of a systematic programme of development work to ensure a high level of consistency between the various computer systems, improvements in the existing systems for recording disability benefit claims on the central records would be made as other pressures permitted.

He also informed me that DSW had formulated proposals to extend the central records database to cover all persons with whom DSW do or might do business and that this long-term project would have positive implications for the completeness and accuracy of the central records system.

Mr. McDonnell.—In regard to paragraph 59, what happened was that, while being aware that the information on the central records was affected by the problems you have just been talking about, we did look at the information as it stood. The paragraph deals with our findings there. What we saw was the existence of duplicate contribution records. We noted the failure to record properly credits in cases of unemployment and failure to record on the central records the fact that disability benefit was being paid. We felt that, one way or another, these could perhaps lead to incorrect payments of benefit.

The paragraph is very long but it will be seen there that the Accounting Officer attributed the existence of duplicate records mainly to persons re-entering employment and to changes in the RSI numbers on marriage and he says that a more secure way of allocating RSI numbers and better computer screening should improve this situation.

In regard to the credits, he outlined certain short term and long term measures which were expected to eliminate the weaknesses identified by us on audit. In relation to the failure to record disability benefit claims — that is to say, to have on the central records an indication that there was a disability claim in existence — the Accounting Officer acknowledged that this problem did exist but he felt that it was not as serious as it might otherwise appear. In relation to all of this, he explained that the Department concentrate on giving priority to the productive anti-abuse measures and that sometimes this may result in a lesser priority being given to ironing out some inconsistencies perhaps in the record, even though there may be inadvertent over-payments arising from this. But generally he said that improvements would be made in all this area as other pressures permitted. You will see there at the end of the paragraph that I mentioned what the Department aspire to as the ultimate shape of the central records, but I suppose, being realistic, that may take some time to achieve.

Chairman.—Mr. McCumiskey, this is again related to the correct reconcilation of the data bank and its correct use and to ensuring that correct amounts are paid and that duplicate payments are not made but at the same time that people get entitlement for the contributions made, where duplicate records are kept, for instance, that the total contributions made are added together and that people get credits where they are due those credits. Can you assure the Committee that before your next appearance at this Committee this matter can be dealt with?

Mr. McCumiskey.—I can give assurance that the matter is being dealt with. I cannot obviously give an assurance that the matter will be completely cured. I wish to say something on duplicate records. Perhaps I could describe roughly what is involved and how it arose and how we are tackling it. It has been a feature of the system that people have been issued with more than one RSI number and examples were given by the Comptroller and Auditor General. The most common one is that when a lady gets married she tends to take her husband’s RSI number with just an added letter at the end of it. People coming into and out of the labour market sometimes do not get numbers at all, as we mentioned earlier. Sometimes they get one number and then another number the next time. There are obvious difficulties in bringing these records together. We do much work on this. This phenomenon is continually being processed and refined as we go along. If a person makes contributions under two insurance records, the first important factor is that first of all, we have these records on our system — that they are not lost. As we are discussing duplicate records these records have RSI numbers by definition. The next important consideration is whether we have linked the two records on our computer system. Do we know, in fact, whether they are linked? We do, with a great many of them. The problems arise with the unlinked ones where there are records on our system where an individual may have more than one record on our system but we simply do not know about it. As I mentioned earlier, in most of these cases when a claimant comes to claim, the claimant will generally be able to help himself or herself in giving us the numbers. All our literature stresses that the persons should use and give us their RSI number and give us any other numbers that they are using as well. The mere fact that we have some idea of the number of duplicate cases we have comes from the fact that we have been searching through the file with the aid of the computer software, to identify them. Again, we have already begun work on this. What we do is that we have the computer, to the best extent possible, bring together what it thinks are duplicate cases. These cases are then all examined by our staff and it is a very labour intensive job. Where the staff are satisfied that these cases are good matches, they are matched. We keep them as duplicates on our files just in case the claimant claims under one RSI number or the other and does not give us both numbers. We link them and things are all right.

In cases where we cannot match them or where we think we may have a match but we are not absolutely certain, we have now started writing out to clients. Since the publication of the Comptroller and Audutor General’s report we have sent out several thousand simple inquiries to insured people saying that we have these numbers for them, asking if we are talking about the same person, or if they would give us their correct address, or date of birth, or whatever information is missing from our files that does not allow us to rectify the matter.

You mentioned my next appearance. I would stress that this is a long process. We are depending in many cases on the public replying to us and then the processing of their replies is labour intensive and will take time. The job is well under way and I am reasonably confident that we will have quick progress on it. It is one of the jobs that we have to have done before we can effectively take over the RSI numbering system in a way that will not create more duplicates.

Chairman.—Let us see if we can make progress on these paragraphs. We have many things to go through. Deputy Flood and McGahon are offering.

Deputy Flood.—Very briefly, with regard to the payment of disability benefit, because of the difficulty here on the record keeping have your Department ever had to contact a recipient of disability benefit to say that because of the inadequacy of the records he or she is not entitled to disability benefit and that they now want it refunded? Does that happen, or has that happened?

Mr. McCumiskey.—We are talking about a situation in which we may have, in fact, paid benefit in error because of the internal records system in the Department. I am not aware of a case but I do know that there are obviously cases in which benefit is sometimes paid in error. It does not arise very often, but it can happen. Errors do occur. Perhaps the record has been incorrectly read off the screen or something of that nature.

Deputy Flood.—For claimants, if they were not aware that they were getting benefits to which they were not entitled — either at the incorrect rate or whatever — your Department would then approach that claimant and say that they must now refund what you have effectively by their mistake overpaid them. That can cause serious problems for people.

Mr. McCumiskey.—Yes, obviously, if a situation like that arises it would cause problems. Our position would be that, if we had paid benefit out in error, that money would be due back to the Exchequer or the Social Insurance Fund and we would be required to ask the claimant for it. It is not a situation that arises with any great frequency.

Deputy Flood.—Could you quantify the amount?

Mr. McCumiskey.—No, I am afraid I do not think that we keep records of that particular type of case.

Deputy Flood.—I think you should. I would like to have some information with regard to the number of reclaims that the Department have made in this particular year.

Chairman.—Perhaps you would drop the Committee a note on that, Mr. McCumiskey.

Mr. McCumiskey.—Yes, I think the situation is that we do not actually keep records of that particular type of case — of benefit paid out in error which we have asked back — but I could certainly look at it and give the best information that we have.

Deputy McGahon.—Mr. McCumiskey said that sometimes they have to ask people to send them in details of any numbers that they may have and that is the kernel of the problem. In talking about the two paragraphs here, it is the involvement of two agencies that is causing the problem. I would support Deputy Dennehy’s claim or belief that a number for life would eliminate most of these problems, whether a person got married or not. It is a very simple thing. The involvement of different insurance numbers and different PRSI numbers is obviously the source of the problem. Considering the number of cases the Department would deal with, I accept that difficulties would arise. Obviously, the Revenue Commissioners do not regard the transmission of information to you as a priority; but, as Deputy Taylor has said, it is an absolute priority to the unfortunate person who is claiming his entitlement. The fact that 45,000 unidentified cases were involved is staggering. How many people accepted the statement from the Department that they were not entitled to benefit? Many of the problems TDs experience is having to take up the cudgels on behalf of constituents to fight their cases. In the light of computerisation the fact that there is such a lack of co-ordination between the Revenue and Social Welfare is surprising. That should be a priority for your Department to get the Revenue Commissioners to accept that they have abandoned their duty when they fail to pass on information of that nature for the people who are paying the contributions. The underlying point I want to make is that a number for life will eliminate many of the problems you are experiencing.

Mr. McCumiskey.—In relation to the number, it is under very active consideration with us and we have not come to a firm conclusion. I agree that each individual should have a unique number and that number should not be changed. I would not wish to have been responsible for giving an impression that the Revenue Commissoners do not feel responsible in relation to the data and that they do not act responsibly. This is simply not the case. Part of the way in which the system operates is that as soon as they get the information they tend to get it to us as rapidly as they possibly can. They will carry out their own initial processing up to the level which they consider appropriate and with which I am generally happy. They will then send it to us so that we can have it on our machines as quickly as possible. There is an element of time here because the contributions in one contribution year give entitlement to benefit in the next calendar year. They give us the information and then throughout the year they are continuously sending us up-dates, as they get improvements, new information, changes and whatever they have discovered through their own inspectors and through their own relationships with the employers. In relation to the checking duty, my understanding is that that check is a check that the right amounts of money have been paid in a particular case. I do not think it was a check in relation to PRSI numbers. It was some kind of an overall calculation on a particular case.

Chairman.—Just for fear that a unanimous view is thought to be going out from here that we should have one number for life, if this were to be the case there would have to be a strengthened Data Protection Act to ensure that the rights and privacy of people are properly protected.

We have given this whole area a good airing in the three paragraphs, so perhaps we could ask the Comptroller and Auditor General to keep us informed on this paragraph from time to time.

Paragraph 60 of the report of the Comptroller and Auditor General reads as follows:

Certain weaknesses in organisational controls and in controls over access to the system were also noted. For instance, computer development staff appeared to have unrestricted access to the system and it was noted that the system contained fictitious data which had been used for test purposes. In addition, the separation of functions within the Central Records Section was insufficient to ensure that claim recording, record creation and amendments to contribution data and permanent information were performed by different persons. In such circumstances there appeared to be a danger that internal irregularities could be perpetrated by the creation of fictitious records which might remain undetected, as occured on previous occasions and as referred to in my Report for 1982.

The Accounting Officer assured me that, in the future, test records would not be used in the live file except in exceptional circumstances and that new procedures were now in place so that it would not be possible to create such test records without the approval of senior management. He stated that these test records appeared to have been introduced in the early 1980s when the computer system was being installed. He felt that the existence of the test records might give a misleading view of the normal separation of functions which existed between computer development staff and central records staff. As far as he could determine all the test records had now been removed.

In regard to the separation of functions within the Central Records Section he stated that, while a computerised control and management system enabled the Department to restrict user access on an effective basis, rigid restrictions were not possible as the day-to-day work involved certain transactions common to more than one area within the section and this, coupled with the need for flexibility in deploying staff, especially when working overtime, restricted the extent to which a definitive separation of functions could be achieved. He considered, however, that improvements in control would result from the recent accommodation of the clerical staff and computer facilities of the Central Records Section in one area and, in the longer term, that the problem would be addressed by the reduction of the extent to which clerical updating of information between the central records system and other computerised systems would be necessary.

Mr. McDonnell.—What I am addressing here is the question of internal control over access to the contribution records and assistance. Obviously, access is a critical factor in minimising the possibility of internal irregularity. The first point I mentioned relates to computer development staff, as distinct from the day-to-day staff dealing with the payment of claims and so on, and development staff having unrestricted access to live data in the contribution records. The Accounting Officer has assured me that this loophole has now been closed and I am satisfied with that.

There is another point, which deals with the staff involved in processing benefit claims having the ability to amend contribution data on which entitlement would depend. While I do appreciate what the Accounting Officer has said about the need for flexibility in trying to keep the system operational and efficient, I do think it is a serious control weakness if, for instance, staff processing benefit claims are in a position, if they choose to act in an unscrupulous way, to increase the number of contributions recorded as paid. The system would not prevent them doing that, obviously, if they can carry out a certain number of the operations involved. The Accounting Officer has told me that it will be possible to introduce better access and control measures with the reorganisation of the clerical and computer facilities of the sections. One would hope that this would minimise the risk involved in this area.

Chairman.—One thing that disturbs me about this, Mr. McCumiskey, is that your own Department did not tighten up on this or discover the weakness before it came to be examined by the Comptroller and Auditor General. What is your opinion on that?

Mr. McCumiskey.—Well, in fact we had introduced a new system of menus onto our screens. We are at the stage where we had made some changes, but obviously had not made enough. We were only at the beginning stages at that time. I am not underestimating the importance of what is being said here. This is a concern that we obviously share with the Comptroller and Auditor General, this segregation of duties. This is always a weakness in any computer system.

Chairman.—Is there somebody in your Department who specifically has responsibility to ensure that computer security is properly looked after, that it is regularly monitored and that malpractice is not allowed to creep in?

Mr. McCumiskey.—Yes. First of all, we have our own large internal audit unit who have made very specific investigations of our computer systems and of the way in which they are used. The whole question of computer security has always been very high on our agenda. We have regular meetings and discussions on it. We look at practices abroad and in other organisations. It is a matter of quite deep concern to us.

Chairman.—In view of the comments that have been made by the Comptroller and Auditor General on the changes that have been made, I think we can probably note this paragraph.

Paragraph 61 of the Report of the Comptroller and Auditor General reads as follows:

As stated in paragraph 57, credits are awarded weekly in respect of periods of disability or unemployment so as to maintain the contribution records of insured persons. The total number of credits awarded to an insured person should therefore, in normal circumstances, not exceed 52 in a full year.

It was noted in the course of audit that a review of the central records system carried out by DSW brought to light 21,453 annual contribution records relating to the period 1979/80 to 1987/88 in which the yearly total of credited contributions exceeded 60. An examination of the records by my staff, using the yardstick of yearly credits in excess of 55, showed that in the period 1979/80 to 1988/89 some 33,535 annual contribution records fell into his category, of which 3,968 related to the 1987/88 contribution year.

Small samples of the 1987/88 cases separately selected by DSW and by my staff were examined in detail and these examinations revealed that in 8% of the cases in both samples there was concurrent claiming of disability benefit and unemployment benefit or assistance. The examinations also showed incorrect or duplicate recording of credits on the central records system.

In view of the relatively high level of concurrent claiming detected in the samples, I asked the Accounting Officer if he needed to carry out a full review of all cases from which the samples were drawn in order to establish the extent of concurrent claiming. Having regard to the apparent failure to detect concurrent claiming as part of the normal control procedures. I also inquired as to whether any measures were proposed which would ensure that, when a claim was being made for benefit or assistance, any attempt at duplicate claiming would be detected.

The Accounting Officer informed me that DSW would fully analyse all the cases from which the audit sample was drawn and, where overpayments came to light, they would be investigated fully and recovery action initiated. He stated that DSW would seek to bring the abuse or weakness highlighted under control by including assistance cases on the central records and by automating new claim processing and the recording of credits. He felt that this would eliminate overlapping claims and the danger of making clerical errors. In the meantime, staff would be reminded of the need for care and vigilance when compiling information on credited contributions awarded and updating the central records.

Mr. McDonnell.—The Committee, or some members of the Committee, will recall that a matter of concern in one of my previous reports — in 1983 — was the danger of abuse of the system through concurrent working and claiming of benefit or assistance. At that time I posed the question on the basis of statistics which showed paid and credited contributions exceeding 52. In this report in 1988 I am raising, not the question of working and signing, but the possibility of simultaneously claiming two types of social welfare payment. There would obviously be one possible explanation for credited contributions exceeding the plausible maximum. Credited contributions are given for periods of unemployment, or disability and so on. That paragraph gives the results of a review by the Department of Social Welfare and a separate review by my staff along the same lines. The results were remarkably similar. There are figures quoted in the paragraph. The one giving cause for concern is, obviously, the 8 per cent of cases in both samples where duplicate claiming seemed to have taken place. You will see at the end of the paragraph that at that stage the Accounting Officer had told me that he intended to look at all the cases meriting further scrutiny. What they intended to do was to look at the just under 4,000 cases relating to the 1987-88 contribution year, to see the extent to which duplicate claiming might exist. I do not know what the outcome of that has been, or how far it has progressed. He did also, of course, indicate steps that the Department were taking to try to counteract this kind of abuse, but there is some evidence that some duplicate claiming was going on.

Chairman.—Mr. McCumiskey, when you did your own research and you found that there was an average of 60 contributions either credited or paid, did that not ring alarm bells? Did it not indicate that there must be duplicate payments being made? Also, could you quantify for the Committee, in terms of expenditure, what 8 per cent translates into? With regard to the analysis which you informed the Comptroller and Auditor General you were carrying out, would you tell the Committee the outcome of that analysis and what steps have been taken to ensure that this possibility of claiming both DB and unemployment benefit or assistance is eliminated

Mr. McCumiskey.—The first question asked, in relation to the situations where there were more than 60 credits, if it raised alarms with us. The fact is that we had known for sometime that the recording of credits had been prone to error in certain cases. The reason is simply that it is a manual system. Most of the credits we are talking about here are credits awarded to people on unemployment payments. These credits are noted in our local offices. They are recorded manually. They are sent up on sheets of paper and they are then keyed into our central computer system. Apart from the very last action, in fact, all the actions are clerically based. We have had difficulties over the years in getting this process to be as accurate as we would like. In fact, we had already tackled this problem in so far as we had known that the only longterm solution to it would be to computerise the whole process. Unfortunately, that means computerising all our local offices.

This is an ongoing process, as I am sure the Committee have been informed before. We have computerised all our local offices in Dublin and a number of outside offices. Over one-third of the live register is computerised at present. The important part about that system is that credits will be automatically checked and automatically updated on to our computer system, so that this type of problem should not arise again.

In relation to the question of the cost involved. I would find it very difficult to say anything precise on that. The number of cases found, of course, are very few indeed. The 8 per cent. for example, in the case of the sample taken by the auditor, represented four cases. In relation to the social welfare sample, it represented 15 or 16 cases. The number is so insignificant that while one could add up the cost in relation to those cases, I doubt if I would feel happy about extrapolating from that.

Chairman.—Is it not a fact, though, that internal or external audit sampling of this kind usually reflects what can be found in the system and that it would be reasonable to suspect that the level would be of the order of 8 per cent?

Mr. McCumiskey.—I think that that would depend on, for example, the size of the sample. We took a further sample out of the same pool. A year later we did this exercise and we found instead of an 8 per cent of cases of overpayment 1.5 per cent. The explanation for that is that a year later these cases had come up against our own internal processing because, as I said before, cases are continually being looked at, being cleaned up in one way or the other, so that perhaps during that year we had been able to come across these overrecordings of credits and done something about it. It is for that reason that I must hesitate in trying to extrapolate from that sample.

Chairman.—If you cannot take the percentage, what about the actual number — 33,535 annual contribution records fed into this category? Surely that is a very substantial number of records and it is possible from the number of records to quantify in terms of expenditure what that equates to.

Mr. McCumiskey.—I think that is an accumulated figure over a large number of years.

Chairman.—The years 1979 to 1989.

Mr. McCumiskey.—Over ten years. If one considers that in relation to the total number of records that we have on our system, while in absolute terms it may look big, in relative terms it is not very significant.

Chairman.—Are you telling the Committee in your best estimation the amount of duplicate payments is relatively small, that the sample is unrepresentative and that it is so small that we need not concern ourselves with it?

Mr. McCumiskey.—Could I just refer to the third point of your question which would lead me into it? The Comptroller and Auditor General mentioned the 3,900-odd cases which the Accounting Officer undertook to examine. Our examination of those cases is still not completed. Of necessity, it is a long process. We have, up to the present, resolved 2,300 of these cases and we have found no evidence of overpayment in those 2,300 cases so far. I cannot pass any comment on the remaining cases because we simply have not yet processed them. Obviously, I would be reluctant to speculate on what might come out of them. All I can say is that number of cases, which is more than half of them, that we managed to rectify so far, we have found no evidence of overpayment.

Chairman.—So in your view it is a minimal exercise and there is really no cause for concern?

Mr. McCumiskey.—No. I think there must be a cause of concern in anything of this nature. I would suggest, however, in terms of the overall size of our operation and the overall size of our expenditure that the amounts involved here will not turn out to be significant.

Chairman.—But the problem is that you have not been able to quantify it in terms of expenditure, so how can you say that?

Mr. McCumiskey.—No, what one could do in relation to the actual samples is quantify the amount of money involved in the cases drawn in the samples. The amounts of money involved are quite small. Perhaps when we have completed our investigation of the 3,900 cases we might have a better idea of what the size of the overpayment problem is.

Deputy Rabbitte.—Briefly, I imagine that it must be very difficult in a Department such as yours. Mr. McCumiskey, to have all the records in absolute order. I did not come in on the earlier paragraphs, although I share concern where people will be paying in their contributions and are disentitled because of problems on your side. With regard to the possible duplicate claims, disability benefit is one of the areas mentioned. Reverting to your earlier point about cost-effectiveness and so on, do you consider that it is cost-effective to have the number of people who seem to be operating now in respect of disability benefit where, as far as I can see, people are being arbitrarily cut off disability benefit at certain stages of their being on such benefit. There is also the incredible, tedious procedure that is involved to rectify that situation, to appeal it, and the very severe hardships caused to genuine people because of these arbitrary decisions.

Mr. McCumiskey.—First of all, may I say quite categorically that there are no arbitrary decisions taken to put people off benefit. All decisions taken to put people off benefit are done by deciding officers in the Department on the basis of medical information. In practically all clases in relation to disability benefit, unless it is a case, for example, where we find the person to be working or something of that nature, where a person’s entitlement is brought to an end, we will have brought that person before one of our medical referees for medical examination. The medical referee will have given an opinion on the basis of that examination and a deciding officer will decide on the basis of that opinion whether the person is entitled to continue benefit or not. If the person is found not to be entitled he or she may then appeal the matter and the Department will ask the person to appear before another medical referee examiner before judgment is made.

Deputy Rabbitte.—I do not want to interrupt you, but I know the procedure. I anticipated that you would say that there are no arbitrary decisions. I am saying that in my opinion and in my experience arbitrary decisions are being made and that this matter is now being policed, probably arising from abuse in the past. It is now being policed to an extent that is punitive on people who are genuinely unfit for work. There is a conflict of medical evidence often involved where the person’s own general practitioner submits the exact contrary view to that of the medical referee selected by the Department.

I do not want to labour this point but I think it should be made, you are the Secretary of the Department. I have a particular case in which I am trying since last November to get an oral appeal. This is not so unusual. This concerns a person who for 33 years was in permanent employment and paid in her contributions for those 33 years. She is manifestly unfit for work, having regard to the kind of work she did in a sewing factory.

Initially the file was lost and initially her appeal was lost. I applied in November for an oral appeal on her behalf and I still cannot get a date. I suggest that for a person who for 33 years paid her taxes to this State that is not acceptable. I do not take the attitude of hounding the civil servants or the Accounting Officer at this Committee. I think they have a very difficult and complex job and if the private sector was run like we expect the public sector to be run there would be nothing done out there. I have a balanced view of it. I am concerned about this area and I would like to take this opportunity to put this on the record.

Mr. McCumiskey.—Obviously I would be concerned that there would be a case of that nature. It is true that we have been tightening up our controls in relation to all our schemes in recent years. We make no apology about that. In relation to the disability benefit scheme we have, for example, increased our number of medical referees. We are a lot more selective in the cases we send before our medical referee for examination. These cases are chosen under reasonably objective criteria. I known this does not explain the individual case you mentioned but I do not know the details of it. We put a lot of thought and effort into choosing the people who are sent for medical referee examination.

The person’s own doctor has the opportunity to write to or appear before that medical referee if he or she wishes. Once an appeal is brought up we send them to a second medical referee. By this stage, if the person is going to an appeals officer, two different medical referees will have in their medical judgment found this person to have been capable of work. Our medical referees are carefully recruited with the best medical qualifications and are very experienced. Obviously I cannot enter into the area of conflicts of medical opinion. That, in this case, would be a matter for the appeals officer. We do have to be reasonably firm on this. I feel that the system we have is a reasonable system. It is not going to be loved by everybody and obviously not by people with whom we do not agree. I am reasonably satisfied that it is a fair system and it is doing the job which it is meant to do.

Deputy McGahon.—Chairman, over the years I have been critical of the Department of Social Welfare, mainly for their naivety. I would take a different opinion on this from that of Deputy Rabbite. I believe it was not without reason that there was a tightening up in the area of disability claims. We must have been the unhealthiest country in Europe; the number of young men with vague pains in the back amounted to an epidemic.

There are one or two points I would like to ask you. For instance, are deciding officers doctors or are they obliged to act on the recommendation of a doctor? Do they make their own decisions? Why should they be at variance with the opinion of a doctor and does that happen?

In relation to unusual type problems, for instance, phobias from which some people suffer, have people the right to ask for a consultant rather than a GP to examine them for that particular ailment? Have people the right to ask for a consultant, a specialist, no matter what their ailment is, rather than a general GP? I know a young man who suffered two serious accidents and has received an award from your Department of 35 per cent disablement for life. He receives a monthly payment of £110. On 6 December he lost his disability payment and was declared fit to work. Is that not contradictory?

Mr. McCumiskey.—In regard to the first question, about deciding officers they are not doctors, they are not medically qualified people. My answer would also apply to appeals officers. Their job, essentially is, to arbitrate between the evidence given to them and, in most cases, quite obviously the deciding officer would follow the medical advice. However, in cases of conflicting medical advice decisions have to be made. This becomes more evident at the appeals officer level, where people do, quite frequently, convince appeals officers, in the middle of this conflicting advice, that they are simply not capable of work. This happens with considerable frequency. The appeals officers and the deciding officers are not medically qualified as such.

In relation to unusual diseases or phobias, this is a problem that arises with us quite frequently. You asked are the people entitled to go to consultants. Of course, they are entitled to go to consultants. People quite frequently do and they bring in consultants’ advice. Perhaps you were asking me whether in fact we should have a consultant as a medical referee. We do not do that as a matter of course. Most of our medical referees have specialst qualifications of one kind or another. For example, some specialise in industrial accidents and diseases, some specialise in other things. We do try in particularly difficult cases to steer the client towards that particular medical referee, if that is possible. New ailments and new diseases are continually coming up and the medical referees try to keep themselves as educated as they can. They attend courses, they acquire qualifications. I suppose that there will always be a certain amount of difficulty when a new thing comes for the first time. There are new diseases that do appear and they become in time identified and I feel sure that our medical referees give them a good airing. The third matter raised relates to a particular individual and it is always difficult to comment on a particular case.

There may be an apparent contradiction in finding a person to be disabled to a certain extent and yet being capable of work. However in ordinary usage of the word disabled it is possible for someone who is slightly disabled to be able to work. In fact, many of them do.

Quite clearly then a disabled person can be found to be capable of work, or found not to be capable of work depending on the circumstances. Obviously, with a degree of disablement so high there must come a point where that cannot be so; but I feel that a deciding officer or perhaps an appeals officer, has made a judgment in this case that the degree of disablement is not so high as to prevent this person from being found to be capable of work. I could not really say very much more on that case.

Deputy Flood.—Just briefly, the difficulty I find sometimes relates to decisions by the medical referee in saying that a person is fit to return to work and then the works doctor says: “Sorry you are not fit to return to work”. The unfortunate claimant is then caught in that situation. That is an area that will have to be dealt with once and for all. Mr. McCumiskey, related to that, is it not true to say that the Department are setting up an independent referee system and how far advanced is that? I would also say that I believe it is not widely known by disability claimants that they can, in fact, bring their own doctor to the examination. I think it may already be on the record — I cannot recall if it is — but in any notification to a disability claimant in connection with calling them for examination, I think it should be clearly shown that they are entitled to bring their own doctor. Maybe it is on that document but I am not sure if it is. That fact should be spelt out.

The second thing that I want to say is that I am increasingly coming across situations where claimants are called for examination and the appropriate medical referee is not in attendance and they are sent home again. That has happened on more than one occasion to at least one constituent of mine who has been with me. No excuse or apologies are given. They are sent away and told: “We will contact you again”. I do not think that is good enough. There should be a system whereby, in the event that some referee cannot turn up for work, or whatever the case may be, the person who perhaps trudges all the way into town from Tallaght or Clondalkin, or any other part of the city, or wherever, should not just be told: “Go home and we will call you again”. That is happening too frequently, in my opinion.

Mr. McCumiskey.—The first point that you mentioned was the conflict between doctors. This is what this is all about in many cases. I cannot give an answer to that when there is no answer to it. Each case has to be looked at on its own particular merits. Sometimes the deciding officer will find in favour of one rather than the other. I suppose it all depends on the circumstances of the case. All I can say is that these are not arbitrary decisions, they are made in the light of whatever evidence we have.

You mentioned the GP being able to attend. In fact, when we summon a client before a medical referee we write to the doctor as well and notify him of what is happening, telling him what I just mentioned. It is not a facility that is used to any great extent that I know of, but it is there.

Deputy Flood.—But is the claimant being made aware of it? It is all very well writing to a doctor but, with all due respects to the medical profession, they might decide that they might be more usefully employed elsewhere. If patients were aware that the doctor could attend, I think they would demand a little bit more of the doctor. They might decide to start changing doctors, which would not necessarily be a bad thing in this situation, if they are not getting the support to which they feel they are entitled.

Mr. McCumiskey.—I am not absolutely certain whether we tell that, whether that is in the notification to the client or not, but I do know that we tell the doctor. We would have thought that the client-doctor relationship in that sense would have been a unitary kind of thing.

Deputy Flood.—You might rectify it now, I take it.

Mr. McCumiskey.—I cannot promise that I will rectify it. I am not absolutely sure that we do it at the moment. I can certainly look at it.

Deputy Flood.—If you do not, are you giving me an undertaking that you will?

Mr. McCumiskey.—I cannot give that undertaking because I am not absolutely clear as to, first of all, the usefulness of it and, secondly, it might actually in some way be taken to be an interference in the doctor-patient relationship, which may not be acceptable, for example, to the medical profession.

Deputy Flood.—I feel that it is important to come back on this. If claimants are entitled to have their doctors with them, then I think that fact should be made clear. It is simply a fact and it should be stated in any communication to the claimants that they are entitled to that facility. It is a matter then for the doctor, as to whether the doctor is going to respond to the claiment’s wish in this regard if the claimant does make a request to his or her doctor that the doctor attend. I am not satisfied that we are getting as clear an answer as we are entitled to here. I am just asking that what is fact be made known to the claimant. I think a claimant is entitled to that information.

Deputy Rabbitte.—Could I just make an additional point? Is it not also true, Mr. McCumiskey, that it is just not about the conflict of evidence, that it is about the manner in which this “fit for work” or “fit to work” is being interpreted? For example, where somebody has been 33 years a machinist where manual dexterity is required and that person is now manifestly crippled by arthritis, for somebody to conclude that that person is fit for work, presumably meaning to be a telephonist, or security person, or something like that, is arrant nonsense and unfair and unjust. That is the manner in which “fit for work” in the legislation is being interpreted throughout the system.

Mr. McCumiskey.—Again, without seeing the details of an individual case it is difficult for me to reply.

Deputy Rabbitte.—It is a general point.

Mr. McCumiskey.—I do not accept as a general point that decisions are being made in manifestly unjust and unfair way. The fact of the matter is that we call people for medical referee examination, as I explained, on a certain basis. Many of them send in final medical certificates before they come to us at all. When they come before the medical referee a certain percentage of them are found, in the judgment of that medical referee to be capable of work. Many others are found to be incapable of work and entitled to continue claiming benefit. They are capable of work. It is not a question of doctors finding the vast bulk of them capable. It is a very cautious procedure in its own way. It has a safeguard, as I explained, in that when the person objects we will then arrange for that person to be brought before another medical referee, quite a different person, at a different time, when the matter can be gone into all over again. It is only in the event that we have judgment of two of our medical referees that we then send the cases to our appeals officer:

Our appeals officer, as I explained, is a lay person who will listen to the client, listen to what he or she has to say and in some cases find in his judgment, despite the medical evidence, that that person can be found to be incapable of work. That occurs occasionally. As I said, I would have to refute any broad suggestion that our medical referees are acting in an unfair manner. They are very professional people with very good medical qualifications. I feel confident, overall, in their judgments of individual cases.

Deputy Taylor.—The medical referees are GPs or are they consultants?

Mr. McCumiskey.—They are generally of GP status but many of them have extra qualifications.

Deputy Taylor.—When these examinations take place by the medical referee, according to the reports given to me from very many people who have attended them, they are very quick examinations. They may take from five to ten minutes. They are very cursory examinations and very superficial examinations and, by and large, little regard is paid to the note which people bring from their own doctor. I know of no case — it may happen in some cases — where a medical referee ever found it necessary to send that person for forensic tests before coming to a conclusion as to whether he was fit or not. I know of no case where a person was ever referred by the medical referee for an X-ray or for a blood test, to go to the hospital for a detailed examination. I find it extraordinary in a case where a person would be attending a hospital under extra consultant care requiring forensic tests, examinations and so on, that a medical referee in so many cases feels confident to take it upon himself — a GP for the most part — after a cursory ten minute examination, to knock that person off. Where the person protests that he is unfit and has his own medical note to confirm that and he is under hospital treatment or treatment with his own doctor, would the medical referee, before coming to a decision, refer that person to the hospital for a consultant’s opinion, where a speciality is concerned? That is one question.

Mr. McCumiskey.—I think the first thing I should say is that in most cases people called before a medical referee for examination who are found to be of the situation described are found to be incapable of work in any event. We are talking here about cases where doctors or medical referees have given the opinion that they are capable of work. People are referred to consultants, particularly in cases of occupational injury or diseases, for specialised advice. When a person is coming before a medical referee that person will come armed with whatever medical advice or medical notes he has, whether they be from a consultant or a GP. I can assure the Committee that these references are taken into account, and are read carefully and evaluated by the medical referees before they come to their opinions.

Most clients come to us simply from their own GP and what we are looking at is a case of where the local GP would be issuing a certificate saying that a person is incapable of work. The medical referee would then be passing a judgment on whether that decision, which may have obtained in the past, still obtains, or whether the person has recovered sufficiently to enable him to work from now on.

Deputy Taylor.—Deputy McGahon referred to fogeys but there are a number of speciality areas in the medical field, which relate to the question of capacity or ability to work. It seems to me that the medical referees who, as I said are GPs for the most part, are at a serious disadvantage here. In many cases they are called upon to fulfil tasks and give judgments which — and it is no disrespect to them or no reflection on them — they are not qualified to make. We are dealing in many cases, for example, with psychiatric illness where people suffer with their nerves or complaints of different descriptions. It would require a qualified consultant psychiatrist to reach a decision as to whether such a person was or was not fit for work. We are not talking about a physical disability, such as a person with his leg in a plaster cast which is an obvious thing. We are talking about a psychiatric illness, an increasingly prevalent thing in our society, and it seems to me that the medical referees are not qualified, nor is a second medical referee. They get it wrong very often and very often their decisions are overturned by the appeal’s officers who, I have to say from what little experience I have had with them, are extraordinarily fair and objective in reaching their decisions. I cannot recall ever having had a disagreement or finding a fault with a decision given by one that I was personally involved with.

There are a number of serious defects in the system and I would like to put this to Mr. McCumiskey. First, from the look of the thing, the appeals’ officers are not independent judicial officers. They are performing judicial functions but they are officers of the Department. Second, it is a bit like a court case in some sense. In the overwhelming bulk of cases, however the unfortunate people who are the appellants are unrepresented and do not have the ability to put over their case to the appeals’ officer. That is a very serious defect in the system and a very serious injustice. I know it is invidious to quote isolated cases, but everyone else has done so and I will quote one as an example.

It was a case of a woman who had a serious nerve disorder and she told me that when she went in to the medical referee and ultimately, on appeal the same thing happened. She was just unable to speak and tears poured down her face continuously. She was quite distressed and was quite unable to articulate her position. She was found fit for work at the initial hearing and at the appeals’ hearing. The woman quite clearly was physically fine but, from a mental or a nervous point of view she might as well have had two broken legs in so far as ability for work was concerned. What I am concerned about is that there should be greater use made of specialisation and that medical referees should not consider themselves fit from a ten minute examination of a person who has a long history to knock him or her off. They should make more use of forensic tests and forensic ability in the hospitals, and referrals to specialists for guidance. That would apply in a very large proportion of cases and that does not happen and is a serious defect in the fairness of the system.

Chairman.—Deputy Taylor made that point at some length because other members raised similar points. But I would like to remind the Committee that we are talking about the possibility of claiming two types of payments. So the points being made are relevant but they are more relevant to the Votes than to this particular paragraph. Mr. McCumiskey, would you like to reply to Deputy Taylor and we will try to discharge this particular point.

Mr. McCumiskey.—I have noted very carefully what the Deputy has said. In relation to our medical referees, many of them have additional qualifications and in difficult cases they do tend to consult with each other and also with the chief medical adviser. There was a brief reference made to our appeals’ officers and I was glad to note that the Deputy felt they were acting properly and independently. Measures are being taken that the appeals’ branch will be given a higher degree of independence in the future.

Chairman.—Mr. McCumiskey, can you let the Committee know when you have carried out your full analysis of the 3,900 cases you mentioned.

We have two more paragraphs in the Vote to go through and there are some matters under any other business. It is inevitable that we are going to bring back Mr. McCumiskey, so is it agreed that we terminate at this stage? Thank you Mr. McCumiskey. We will be in touch about a further appointment. That concludes the public session of the meeting.

The witness withdrew.

The Committee adjourned.