Committee Reports > List of Committees > Dáil > 1997 > Committee of Public Accounts > Report No. 02 - Value for Money Examinations

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

AN COISTE UM CHUNTAIS PHOIBLÍ

COMMITTEE OF PUBLIC ACCOUNTS

Déardaoin, 27 Meitheamh 1996.

Thursday, 27 June 1996.

The Committee met at 11.30 a.m.

DEPUTY DENIS FOLEY IN THE CHAIR

Mr. John Purcell (Comptroller and Auditor General) called and examined.

Mr. Jim McCaffrey (Department of Finance representative) in attendance.

Mr. Tony Gallagher (Department of Finance representative) in attendance.

REPORT ON VALUE FOR MONEY EXAMINATION - MEANS TESTING

Mr. Edward McCumiskey (Secretary, Department of Social Welfare) called and examined.

Chairman: Mr. McCumiskey, you are welcome. You might introduce your officials.

Mr. McCumiskey: On my right is Eddie Sullivan from the Department of Social Welfare and on my left is Anne Tynan, the accountant in the Department.

Mr. Purcell: For some years there has been a general concern about the proliferation of means tests. The previous Committee of Public Accounts in particular, on a number of occasions questioned the need for piecemeal testing by Government and local authority agencies, on the grounds of economy and efficiency. In response to the Committee’s express concern, I have carried out an examination in this area to see whether there were identifiable inefficencies in current means testing arrangements and to establish whether scope existed for simplification and rationalisation. Around the time my examination started, the Government gave outline approval for the development of an integrated social services system with the intention of co-ordinating administration, delivery and management of statutory income support services. A working group was set up to consider the matter in detail. Part of its work was to address the question of how to rationalise means testing, both from the point of view of providing a better service to the individual and of getting better value for money. I understand the group’s report was recently finalised. It was hard to get a handle on what the current arrangements are costing. We reckon it is at least £15 million a year. That is a conservative estimate.

Our report identified three principal inefficiencies; firstly the re-testing of individuals who are already in receipt of a different welfare payment; secondly some duplication of testing where an individual is on supplementary welfare allowance while awaiting social assistance and thirdly, the testing of those who are subsequently found to have no means. Changing the current arrangements will not be easy as there are legislative barriers. At a more practical level, much of the means-related information outside the Department of Social Welfare is still held on paper files, which would rule out automatic access by interested bodies. The report goes on to suggest a number of options which could be considered, including the creation or designation of a single means testing agency, greater categorisation of claimants on the basis of risk to reduce the incidence of tests, integration of schemes to make service delivery more client-centred, linking assistance schemes so the qualification for one scheme may serve as a type of passport to other schemes and the adoption of a common definition of means. Before deciding on the implementation of these or other suggestions, it would be necessary to assess in detail the potential cost benefit and the impact on the quality of service. This can be done best in the context of the development of the integrated social services system.

Chairman: Mr. McCumiskey, what is the latest position in relation to the integrated social services working group?

Mr. McCumiskey: I am pleased to say the working group has completed its report. We sent the report to Government and it approved it yesterday. The Government also approved the publication of the report and I hope to have it published within weeks. In its approval of the report, the Government recognised there is a huge job to be done here. The report is quite comprehensive and I would be pleased to give the Committee details of its recommendations. The Government has set up a management group across a range of relevant Departments to cost the various elements in the report, because there will be costs in various Departments, and basically to get on with the work.

The feeling of the committee that drew up the report is that it obviously cannot all be done together. The report discusses a time range of between three to five years to fully implement its recommendations.

Chairman: What consideration has been given to the setting up of a single means testing agency and would you consider this to be the best long-term approach?

Mr. McCumiskey: This was one of the ideas discussed by this committee, which embraced a wide range of not just Government Departments but also agencies within the Civil Service. The feeling was that because of the advances made already in relation to means testing that the issue of setting up a single agency was not wholly desirable, at least at present. The report recommended that this idea should still be left on the table. The type of thing which Impressed the committee, which was being done already, was the setting up of a means database on the Department of Social Welfare computer system. Up until recently, although we kept details of claims on our computers, we did not keep details of means. We have now set up a system for recording means. We have the means of something like 150,000 people on it. The committee recommends that this means recording system should be made available to the other agencies such as the health boards, the local authorities and people dealing with educational grants. There are some problems of a legal nature with this, raised by the Data Protection Commissioner. The committee feels that legislation may be necessary to overcome those difficulties. I can explain what they are if the committee is interested. They are real difficulties that have been raised. As one can appreciate, the committee has discussed the widespread sharing of data across Government agencies and from a data protection point of view, this raises certain concerns. To get back to the Chairman’s original question, the committee felt, and I would agree, that the question of a single means agency may arise in the future. We do not think it is relevant now because we have already done a lot of work in setting up the central means recording system in the Department of Social Welfare, which is intended to be open for use to all the public service providers.

Deputy Ellis: We are all running into this means test situation in Social Welfare regularly. So are health boards, etc. who are doing assessments. The one that gives us most concern relates to young people who are being assessed and who live at home for UA purposes. In many cases they are assessed with means that do not exist. They are forced to appeals and various other mechanisms to resolve the situation, whereas if they move around the corner they are given rent support and other types of support. Why are means that are not there being counted against these people in means tests? This is leading to a higher cost to the State than if they were allowed UA as they are claiming it.

Mr. McCumiskey: The assessment of means in the cases raised by the Deputy is done under the unemployment assistance scheme. It is done because there is a requirement in the legislation to do so. There is a specific provision in the legislation saying that among the means to be assessed is the value of any benefit or privilege that the person enjoys. That in common language is taken to be the value of board and lodgings. If they are in a situation where they are being provided with a roof, food and shelter they are in a better position than someone who is not being provided with these. That is the legal basis on which the assessment is made. There has been a lot of debate on this issue, not just in this Committee but in other fora, and a report is expected today from a group dealing with the integration of tax and social welfare which has looked closely at that provision. While the report is not due out until this afternoon, the committee was conscious of the cost involved in not operating such a measure but felt in general that its application - particularly to people over 25 years of age - was somewhat doubtful and I believe among its proposals is a suggestion that that aspect would be examined.

The basic reason is the question of cost. The Deputy mentioned situations in which young people may leave home and go into accommodation on their own and by reason of that claim rent allowance on their own. This undoubtedly happens but the evidence I have is that it does not happen to any great extent and where it does happen there are invariably good reasons for doing so which are not economic but are connected with other facets of the situation. An example is the need to look for work, etc. If the benefit privilege-provision was not applied to young people generally, the cost would be very high.

Deputy Ellis: On DPMA, which will be coming under Social Welfare shortly, is there any research being done on the possibility of having a single means testing agency which would deal with everything and also, having a single guide on the value in assessments of various matters such as board and lodging or property ? Do you envisage this happening in the next five years? Also, where do you stand on data protection?

Mr. McCumiskey: The ideal situation would be as the Deputy is suggesting. There should be the same criteria for all the schemes. Over the years this has been examined and even in our organisation there are differences in the assessment of means within our own schemes. That is not to mention schemes run by other Government departments. With any suggestion to change the means to equalise them, there is an unwillingness to disimprove the situation for anyone. One ends up with a situation of levelling up and the costs tend to be an inhibiting factor. We have begun on this with DPMA. We have lined it up with means testing from our other schemes and this needs to be done. It is referred to in the ISSS report to which the Chairman drew our attention at the beginning. Whether it be done in the three to five years I cannot say. There is greater willingness to do so and recognition of the disadvantages of the present system. Not alone is the present system difficult for the citizen to understand, it is difficult for the administration to operate. It is undoubtedly costing us more than it should.

Deputy Connor: The report shows that some means tests are done on the basis of gross income and others use net income. The benefit is determined on that basis. There is an interesting comparison in paragraph 2.56 where it states that a couple with three children applying for a medical card, their income threshold is £166 per week white for the same couple applying for unemployment assistance - a basic income - it is £139.60 per week. Would Mr. McCumiskey comment on this and the matter of means testing on gross and net income?

Mr. McCumiskey: It is difficult to comment on matters like this. In doing so I would usually have to go into each scheme and explain that each scheme grew differently over time, even with different organisations. Simply, when the criteria were adopted, there was no perspective across all of the schemes. Perhaps there should have been. One can point to the means and needs of people differing according to their situation. The most obvious example is the different treatment of lone parents and the ordinary unemployed person. Whether one agrees or not, the system is saying that the needs of the people are slightly different and the schemes are different in many respects, not just the means levels.

On the gross and net incomes, I cannot say why that is done in many cases. I suspect that the differences have arisen as much because of the administration of the scheme as the situation of the people involved. I suspect gross income is far easier to assess than net income and proof of gross income can be obtained far more readily with employers’ statements, whereas net income requires more work to determine. That issue has arisen many times on Family Income Supplement and there are arguments on where the balance should lie. The purpose of the scheme is to ensure that people have enough money to meet the contingency which they are suffering, employment, lone parenthood, etc. I cannot justify these differences. It is clear from the Comptroller’s report that these differences have grown over the years and schemes with different criteria have been allowed to stand. The purpose of the study being done by the group I mentioned in my opening remarks was simply to try and bring a rationale back into this. Those matters were on the minds of the committee when the recommendations were made. I hope that over the years those differences can be ironed out but it will not be done immediately because there will be cost and administrative issues. The legal basis of all of the schemes will also have to be changed to allow this but I hope that over the years these differences will be ironed out.

Deputy Connor: Is there any element of notionality in the way in which means are assessed now ?

There was what used to be called a “notional assessment” for a small farmer, for example, for unemployment assistance or old age pension. Is there any element of notionality left? It was changed in the early 1980s to a factual/actual system.

Mr. McCumiskey: The Deputy’s comment is correct. The notional method was used to describe a system that related the income solely to the PLV of the holding. It was found to be unconstitutional and it was changed to the factual system. The word ‘notional’ is also used, I think a little improperly, in relation to some of the factual assessments on the self-employed as a group. There is a provision in the legislation whereby when we are assessing the income of the self-employed, which would include farmers, in the absence of other evidence we have to look at the income in the previous year and project that forward. That is sometimes described as a notional method of doing so. It is done primarily where there is not any evidence to the contrary. If the person concerned can show evidence that their means are higher or lower that has to be taken into account. The factual assessment is meant to be as near as possible an estimate to what the person is earning at present.

Deputy Connor: It is my experience that when a notional element is used the person involved has to state a fact, of the value for the sale of animals, for example. If the officer is not satisfied a notional estimate is applied. The notional estimate is always greatly in excess of what is stated to be the fact. In other words the notional system is always used to the advantage of the Department of Social Welfare and the disadvantage of the client.

Mr. McCumiskey: I have no evidence of that. I suspect that what is happening in such cases is that the investigating officer is perhaps not happy with the evidence being given and ascribes an estimate of his or her own to the matter. Presumably, that arises in contentious cases where there is a difference of opinion. The reason for the difference of opinion is that the officer feels the claimant is not giving a full and true declaration of earnings.

That is an inevitable aspect of any type of means investigation system where, particularly in the case of self-employment, one has to make a reasonable estimate over a period of time. It would simply not do just to look at the earnings for the previous week as one might do with an employee. By way of consolation, there is an appeals system whereby the person concerned can have an oral hearing and have the case gone into again. The inspector then has to justify to the appeals officer why he or she made the estimate.

Deputy Connor: I have taken an interest in this matter and I have attended appeals to put cases on behalf of my clients. I always find that the appeals officer is inclined to take my point of view. I have not yet seen situations where this system of the notional valuation is usually used that it was not used but only to raise the value of the sales of animals or decrease the value on the expense side. It is not fair and is a throwback to the old notional system. The notional system operated nowadays is purely to create an advantage for the Department of Social Welfare and a disadvantage for the client.

Deputy Finucane: Politicians contact the Department of Social Welfare more than any other Department. I find the Department very professional in its approach in dealing with us and I presume that percolates to the public. To what degree is the Department up-front in its explanations to people who apply for social welfare and where the means criteria are applied? The means criteria and the formulae used confuse us politicians and if it we are confused by them to what degree can the ordinary people who apply for social welfare appreciate what the Department may try to explain to them?

Mr. McCumiskey: I have to admit this is a fairly frequent matter of concern raised with us. There is an underlying problem here in that the means provisions in the legislation and the regulations are not simple, to put it bluntly. In many cases they are woefully complicated and they differ from scheme to scheme, as the Comptroller and Auditor General has pointed out in his report. This of itself is a difficult beginning in relation to this.

We are conscious of the need to give the best possible information to the public and the people who apply to us. In our defence I would say we have improved in this regard over the years. It is clear from the reports of the ISSS group that we have more to do. I agree with the Deputy’s sentiments that it has been our experience that the more and better the information we give the public the easier it is all round. Far fewer appeals are made and we end up with more satisfied people.

We have been doing a lot of in-depth customer surveys recently, at our local offices and nationally. While we have found a high level of satisfaction with our service generally, within that the question of information is one on which the public is most critical of us.

With regard to information in relation to means it is vital that people should know the basis on which means were assessed, the how and why it was done. We have put a lot of work and staff training into this matter. although I agree we have a lot more to do.

Deputy Finucane: I am pleased the Department has taken over the disabled persons’ maintenance allowance. I have experience of dealing with it. I have found that progressing applications for the allowance can be a slow process. There is a medical element involved which may be similar to what the Department deals with in relation to other payments. What would you consider an effective period to deal with a DPMA application? A means factor is involved in DPMA also.

Mr. McCumiskey: When we take it over it will become one of our schemes in that we will apply the normal criteria to it which we apply to handling our other schemes. One of the advantages is that it will be dealt with by a central organisation and we should at least be able to make the applications uniform throughout the country. At the moment there are wide disparities. I do not know how long it will take to process applications. We will have to wait until we get the scheme running.

At present we monitor all our schemes frequently as to the times taken to settle claims and make payments. For example, we normally do invalidity pension claims within three weeks. I am hopeful we can do something similar with the DPMA but I really would not like to say until we have the scheme up and running. A lot of this falls out of the practicalities involved - how good the claim forms are, how long it takes the medical aspect to be done etc. I hope we can speed it up and make it more efficient, but I will not set targets in that regard until we have the claims on hand and get practical experience of the scheme. It will be treated exactly as any other schemes and we will apply the same standards of urgency and accuracy to it.

Deputy Finucane: I wish to raise an important point which is related to social welfare although not to means testing.

Take the murder of Detective Garda McCabe recently in my constituency. Many pensions are paid out at post offices in recent times and many of the changes the Department of Social Welfare has introduced have necessitated people going to the post office instead of the social welfare office. An increasing amount of money is being paid out of the post offices and everybody knows when to collect their payment. Therefore, there is nearly a set programme of An Post deliveries of these payments to the post offices. For example, if the van leaves Limerick, it arrives in Adare at 7 a.m., the next place at 7.30 a.m. and the following town 8 a.m. The fact is that it is programmed, the date is known and it is also known that An Post is carrying large sums of money. In contrast, when banks transport large amounts of cash they usually use convoys consisting of Army and Garda personnel and a security van which acts as a natural deterrent. An Post vans make deliveries at times of the morning which are quiet when there is no great activity, as was the case recently. Most post offices have a safety system and they have time-lock safes. Why must there be such a programmed schedule when the payments could be made at any time and put into a safe? If that were the case, the situation would not be programmed from the criminal’s point of view. The Department must look at the present system and try to avoid transporting large sums of money because it is possible to have the payments in the post office safe over a period of time.

Chairman: I have allowed you to make your submission, Deputy Finucane, but I would prefer to return to the issue of means testing.

Deputy Finucane: I was just making a general point. The Department of Social Welfare and An Post should look into this because these are the Department’s cheques.

Mr. McCumiskey: I am conscious of what is being said here. Cash is a problem and it creates security problems no matter what we do. First, we took money from our local offices and distributed it to the post offices. There are many more post offices than local social welfare offices so we reduced the bulk in any one area. Second, where we can we encourage people in all our schemes to avail of electronic transfers of money, that is, money is sent straight into recipients’ bank or post office accounts which can be collected at any time. The take up is growing gradually and more and more pensioners and people on child benefit are agreeing to that method of payment. This reduces cash deliveries. Third, payments are made on particular days. The public do not have to collect them in many cases on those days; they just feel they need to do so as it is the tradition. People are also very attached to their local post offices, and that is possibly why we use them. We work closely with An Post on this issue and on the particular security matters to which the Deputy referred. We are not unaware of them by any means.

Deputy Finucane: Often when a person applies for social welfare, whether it is unemployment assistance or another payment, there is a valley period in which the person needs finance while the assessment is ongoing and he or she is paid supplementary welfare allowance. A person must present his or her case for supplementary welfare allowance and he or she is given a certain amount of money. When the issue of the social welfare payment is resolved, the health board gets a refund and the differential is paid to the client. If a process of assessment takes the Department a couple of weeks to process, why is it necessary for a person to go with great humility each week to the community welfare officer to look for money for that week as he or she is still awaiting the processing of the claim? Surely, it should be possible, based on the Department’s statistical information, to equate a period of time with how long it takes to process a claim and pay the person’s supplementary welfare allowance on a weekly basis. The Department should know it will take about four weeks, for example, to process a person’s claim. Therefore, if the person was to go to the community welfare officer, a married man with two children would probably get £100 per week to tide the him over. The person should not have to explain the situation to the community welfare officer every week while he or she waits for social welfare. There must be some provision to fill such a valley period and provide the client using the system with a certain amount of dignity.

Mr. McCumiskey: The SWA scheme is the responsibility of the Department of Social Welfare but it is run by the community welfare officers who are employees of the health boards. This division is at the bottom of the kind of difficulties which the Deputy mentioned.

In redesigning the Department’s computer systems we have created an integrated system for all our short-term payments. In other words, the computer system looks as though it is one unified system and we have included the supplementary welfare allowance on it. In fact, we have made a beginning in Tallaght. We will put all the community welfare officers on that computer system. Organisationally, it will be the same as if they were working within the Department of Social Welfare. The purpose of this is to cut down the duplication which is going on at present. Basically, it means that if a person is on our books or has applied for unemployment assistance, the community welfare officer will have instant access to that information and will not have to go through the whole operation again.

There is also a slight legislative difference between unemployment assistance and supplementary welfare allowance in that there is a three day waiting period for unemployment assistance which does not apply to supplementary welfare allowance. Until that is equalised - I am not sure how it could be - there is an earlier title to supplementary allowance so there will always be a little hiccup of that nature in the beginning.

The Department pays a huge number of unemployment assistance payments almost instantaneously by desk interview. In other words, while some years ago we used always investigate claims by sending inspectors to people’s houses, about one third of them are done by the person simply coming into a social welfare office, sitting down with the officer and explaining what they have by which means we can establish title quickly. We found as a result that far fewer of those people must go to the community welfare officer, so that was the first thing the Department did.

Second, as I mentioned, we have integrated the supplementary welfare allowance scheme on the Departments computer systems. There is money involved in doing this because we must extend computer screens to the various health boards. The health boards have invested money in building up their system too. It means that over a period of time all the community welfare officers will be able to access the Department’s computer system and the means data system to which I referred. It should eliminate much of this unnecessary duplication which occurs at present.

Deputy E. Byrne: I am not sure why Mr. McCumiskey, as Accounting Officer of the Department of Social Welfare, is taking all the questions because this report covers not only the Department of Social Welfare but also the Department of Health, Dublin Corporation, other local authorities, rent assessments and everything else in the basket. In fact, there are 42 means tested schemes. I presume one of the reasons Mr. McCumiskey is here is that the Department is probably the biggest spender under these schemes. Having said that, I congratulate the Department of Social Welfare and anybody from the Department of Health or the Eastern Health Board who is with Mr. McCumiskey today for opening that state of the art computer network to which he just referred. I understand the Department has linked 500 community welfare officers at 800 locations throughout the country using state of the art technology to facilitate anybody looking for supplementary welfare allowance from a health board clinic in Dublin and eventually nationwide. Those applying for supplementary welfare will be happy that they no longer have to queue in what tend to be decrepit, underfinanced health board buildings. Congratulations are in order.

I read this report last night. I am still confused on the recommendations made by the C&AG. This is a value for money report on means testing. The examination identified a number of possibilities for achieving more efficient means and outlined six potential options. However, it does not say that savings will accrue if one or all six are adopted.

The figure that strikes one immediately is that administrative costs amount to £15 million per annum for processing 600,000 means tests annually. Is there any way of putting this into context? This is a value for money survey but it does not say if that we are not getting value and that the present system is giving bad value. This is confusing. Perhaps the C&AG would clarify this.

Deputy Broughan: Perhaps the Deputy will allow others to ask questions also.

Deputy E. Byrne: I have asked the C&AG a question.

Deputy Broughan: Other Deputies also have questions.

Mr. Purcell: It is not an easy job to quantify the amount of savings. It was difficult to try to quantify the amount of expenditure on the means testing arrangements and to identify what constituted pure means testing on the one hand and the processing of applications on the other. We started from an indistinct base.

I would not describe these as recommendations but as options. There are savings to be made and the amount of money put into means testing could be reduced while improving the quality of service. There is no one correct answer, for example that we establish a single means testing agency. It is the type of activity that needs much research. The Accounting Officer mentioned that a working group, which was broadly based, sat for the past two years and has now reported. A commitment of time and money is involved in investigating the different options and getting the proper mix. In the context of this report and the resources available to my office we could not do this but we could identify certain areas where some improvement could be made, including savings, unquantified at this stage.

Deputy E. Byrne: The Committee could ask you to consider suggestions and undertake further research on where savings may be achieved. It is an ambiguous area. Page 13, paragraph 2.32 states:

From a test examination of the files in the DSW and health boards, we found that DSW means tests for new claims are more rigorous that the equivalent test in a health board. The health board normally limits its checks with the local DSW office to the establishment of the bona fides of the individual seeking SWA…

There is nothing more annoying - we know this from the sad death of Ms Guerin - than the knowledge that people, apparently known by their neighbours and friends to have money, are in receipt of benefits. We do not want to antagonise the unfortunate genuine applicants seeking rent allowances or any form of supplementary welfare allowance because means testing can be very provocative.

I am irritated when I see people abusing the system. For example, a constituent of mine, Liam Boland, was recently jailed for seven and a half years. An application form from the Eastern Health Board for assistance in paying the rent on his so called luxury apartment at Harold’s Cross was found on him. Mr. Boland drove a 1995 Nissan Micra and he lived a good life style although he drew the dole as an unemployed person. He is serving his jail sentence because heroin, estimated to have a street value of £100,000, was detected in this flat for which a rent supplement was being drawn.

This is the reality of life on the street with the drug dealers and drug barons. The stated policy here is that community welfare officers are not as rigid in applying social welfare criteria as they are in the Department of Social Welfare. Apparently all they do is check with the Department of Social Welfare if a person is drawing unemployment assistance. In this case, Liam Boland was drawing it. However, you took their word as gospel, yet this individual had all the outward appearances of a lifestyle incompatible with being unemployed. How can this irritating state of affairs be overcome and reconciled with the genuine rights of those seeking rent allowances or subsidies?

Mr. McCumiskey: It is not an easy problem. I suspect the number of cases involved is minuscule as a proportion of the number of cases we deal with. We risk categorise claimants, an aspect mentioned in the C&AG’s report. This means that, as best we can and with a view to getting the service done quickly, we rank the claimants. Our first objective is to get the people at very low risk into payment immediately. We undertake a minimum amount of investigation at the outset, pick a random sample afterwards and then undertake an in-depth investigation. At the other end of the spectrum there are people at high risk - perhaps they have defrauded the Department previously - and we give them a more rigorous examination.

One would expect the Department of Social Welfare to undertake more rigorous examinations than the health boards. They may only be dealing with supplementary welfare allowances which may only last a couple of weeks, whereas the Department may deal with unemployment assistance or a pension which could last for a long time. The degree of investigation must bear some relation to the nature of the payment. The more expensive the payment, the more rigorous the investigation.

With regard to the type of situation outlined by the Deputy, the bottom line is that we must operate in accordance with the law and act on evidence. Although some of the evidence may appear afterwards it is not evident at the time - many of these things are seen in retrospect. If we get evidence we use it as such. If we get evidence that people have means which they are not disclosing it puts them into the high risk category and we must undertake a more thorough investigation.

Where it becomes clear to our investigators that people are living a life style or have assets such as cars or houses that are unaccounted for we tend to decide, without any specifics, that the person has failed to satisfy the Department that they satisfied a means test. It is not something we like to do because the legislation requires us to be very precise in our judgment. However, we have done that a number of times. This is a continuing aspect in any means test situation. People generally do not want to disclose means and it is our job to get it properly. Much hearsay is readily available but hard evidence is not that easily come by.

Deputy E. Byrne: Mr. McCumiskey must carry the burden for the Health Boards. However, when one looks at the case of Liam Boland, does Mr. McCumiskey agree the Health Boards and the Department of Social Welfare failed to protect taxpayers’ money? Whatever about hearsay, what about somebody who is driving a 1995 car but is deemed to be long-term unemployed? Their social welfare record shows they never worked a day in their life and they are drawing unemployment assistance. Those of us who are lucky enough to have a decent income know that running a car is expensive. Tax and insurance are also expensive as is petrol or diesel for the car. Does Mr. McCumiskey agree alarm bells should sound that something fraudulent is occurring in relation to somebody who never worked a day in their life and is deemed fit for unemployment assistance through the system but is driving a car? One cannot afford such luxuries if one is living on unemployment assistance.

The means testing document is rigorously applied and poor unfortunates who are £1 or £2 over do not qualify. Yet gangsters who engage in drug peddling are not only claiming unemployment assistance but benefit from rent supplements from the Eastern Health Board. This must be rectified as part of an ongoing upgrading of policies regarding the application of means tests. Mr. McCumiskey will appreciate the liberal attitude to people in that category is no longer acceptable. People are infuriated that others, whom the cats and the dogs on the street know could not have accumulated their income from anything other than illegal activity, can apparently access the system so easily..

Deputy B. O’Keeffe: We have gone over old ground in terms of the amount of money defrauded in the system and I will not dwell on that aspect. However, it cost £15 million to administer 600,000 means tests. Such tests are carried out for unemployment assistance, but 121,000 means tests were also carried out for medical cards. If somebody is entitled to unemployment assistance, they should automatically be entitled to a medical card. As a layman considering the system, it is fair to point out in terms of the £15 million for means tests that approximately half the tests carried out by various agencies, such as the Department of Social Welfare, health boards or local authorities, are duplicated. Has any effort been made to integrate this area and thereby make significant savings in the administration of the structure?

Mr. McCumiskey: We agreed there is duplication. At the same time, a number of points should be made about means testing. It is a salutary exercise to look at the cost of means testing and the money it saves. The Comptroller and Auditor General estimated means testing costs my Department £4.4 million. I estimate those means tests save the Exchequer something in the region of £500 million a year. If the means test was abolished, all the people on reduced means at present would get the full rate of benefit. This would cost more than £180 million a year. The remainder of the £500 million would come about from people who do not qualify at all at present.

Much means testing is done not just at the initial stage of a claim but when it is progressed - what we call reviews. These reviews save many millions of pounds; I am examined on this aspect when the Department’s accounts are examined. If one looks at the level of overpayments and savings we strike up every year - £12 million in relation to means tested schemes in my Department - most of them come about by means of reinvestigation which many people might regard as duplication or unnecessary. It is important to make this point. Once a system is geared, whether one likes it or not, to give money to those in need, some type of means testing system is required. If one divides the total cost of means testing, which appears huge, by the number carried out, the amount per means test is quite small. In my Department’s case it is only about £25 a test. In terms of the overall saving, it is good value.

Regarding the medical cards, I agree with the Deputy’s point. In health boards the practice more or less is that if a person is receiving a non contributory old age pension or unemployment assistance, the degree of examination in relation to a means aspect of a medical card is minimal. In many cases I understand it is done automatically. This brings up the question on which the Comptroller and Auditor General put his finger regarding the idea of one payment acting as a passport for the other. In other words, if one is receiving one, why cannot one get the other automatically?

The group I mentioned, whose report has been approved by the Government, also drew attention to this aspect and I think a drive will be made to consider whether more of this can be done. It happens to a certain extent at present. It is not part of the legal basis of the schemes but it is done in a pragmatic type of way. If somebody qualified for unemployment assistance, particularly recently, the community welfare officer will normally be happy to say those are the person’s means and then consider the medical aspects in relation to the card.

Deputy B. O’Keeffe: There was no suggestion that means testing should not be carried out. The Comptroller and Auditor General did not deal with reviews, which are a necessary evil for some people who are in receipt of benefits. However, the example of a lone parent relates to Mr. McCumiskey’s Department. A person applies for a lone parent allowance and children’s allowance. If the person is seeking an emergency payment, an application is made for a supplementary welfare allowance. If the child needs a school uniform, an application is made for it. If the person is in a local authority area, an application is made for a local authority house or rent subsidy. If the lone parent is asked to pay service charges, an application for a waiver is made. If the child is attending school, an application for a book scheme can be made. The person can also apply for a fuel allowance.

Seven separate applications are made on behalf of an individual but, having passed the first test, they should be automatically entitled to the others. There is tremendous room for manoeuvre and savings, even within the Department of Social Welfare. If there are 42 means tested schemes, there must be room for rationalisation. There is duplication across the board. FÁS has one stop shops and perhaps it is time the Department of Social Welfare had just one application form which would cover all the various benefits. Should there be one application form for all benefits?

Mr. McCumiskey: I agree with those sentiments. There is a problem identifying people across a range of schemes. One of the recommendations of the ISSS group is that the revenue and social insurance number should be used for all claims, which would automatically channel the application back to source. The Deputy might remember I mentioned that we are setting up a means recording system on our computers, which we hope to make available to various authorities involved in such schemes, subject to agreement by the Data Protection Commissioner and the law being changed. It should operate on the principle of the single local contact point or one stop shop, particularly where people are marking claims for any type of social services. It should be possible for the various authorities to deal with that in a composite way.

Ideally when a person makes an application for a means related service, as much information as possible should be obtained from the person to satisfy a range of schemes. Such information should then be allowed to stand for a minimum period of time - I do not know how long - and if the person applies again within that time, an automatic assessment should be done without the need for reinvestigation. The report suggests such recommendations and the Government has told the various Departments and organisations to see what costs and savings are involved. However, this is not just about savings, but about the inconvenience of having to go from one place to another.

I stress that this involves sharing data, which must be sorted out. Issues have been recognised and highlighted and the experts must look at the law to see what needs to be done because safeguards must be built in to prevent personal data from being readily accessible to people who are not entitled to it.

Deputy B. O’Keeffe: Such information, about which the Data Protection Commissioner has reservations, is shared by statutory authorities. I cannot understand why there would be a problem with that. If legislation is necessary, we should introduce it to ensure that our system is properly integrated.

Mr. McCumiskey: As I understand it, the Data Protection Commissioner has two concerns. He feels that any widespread sharing of information should be made known to the public and it should be the subject of public debate; in other words, it should not be done surreptitiously. His job is to ensure that when people give information, no matter who they give it to, it remains confidential and is only used for the specific purposes for which it was given. That is the law which must be upheld.

I share the sentiment that the public service should be treated as a unity. While the Commissioner would not be opposed to it in principle, he would feel it is a matter of concern which should be debated. His view is that it would be better to underpin that in legislation because the Data Protection Act requires each organisation in the public service to register separately - the Department of Social Welfare, the Department of Health and local authorities are registered - and to only transfer information among each other within the confines of the Act. We must inform the Data Protection Commissioner, which we have done in cases. The Department is free to exchange information with community welfare officers and that is how we are able to do what we are doing. The Data Protection Commissioner examined that and said it was within the legislation. We also exchange information with a number of local authorities about the various schemes they run. We must go through the formalities.

There is concern about data for obvious reasons. The Data Protection Commissioner, who is the authority on this issue, feels it would be better to change legislation to do that. This report has gone to the Government with the recommendation that this should be done. That will go back to the Department of Justice, which is the Department concerned. I expect to see action on that in the near future.

Deputy B. O’Keeffe: There is a general welcome for the return of the DPMA scheme to the Department of Social Welfare. However, people are also concerned because we are giving another scheme, which will be open to appeals, to the Department when it takes six months in many cases before the results of an appeal are available. My health board wants to know if it will continue to carry out administrative functions. Will the Department’s medical staff interpret the medical condition of people or will the health board’s medical staff continue to play its role in this regard?

Mr. McCumiskey: I accept the point about the appeals system. The appeals will be coming to our appeals branch, which is a huge improvement on the present situation. This is a question of resources. The chief appeals officer’s most recent report stated that the average time needed for him to deal with appeals is 17 weeks. Some cases take longer than others.

Deputy B. O’Keeffe: That is not my experience or the experience of many Deputies in the House.

Mr. McCumiskey: His report for last year will be published in the next week or two and the Deputy will be able to examine it more carefully. Cases often require further medical examination or things of that nature. It is a question of resources.

As regards the Deputy’s second point, cases will be decided by the social welfare deciding officer, as we do in our own case. ¹We expect however that medical examinations will continue to be done by health boards only where other payments arise such as rehabilitation payments. In relation to DPMA, while medical examinations already performed by Health Boards will continue to be acceptable for existing cases, new cases will be treated analogous to our disability benefit scheme where we accept medical certificates from the person’s GP. The deciding officer will then make a decision and if we are not happy, the case can be sent to our medical referees. I expect we will have a similar structure for the DPMA scheme.

Deputy Broughan: I take up Deputy Eric Byrne’s point about major criminals and drug barons availing of social welfare and other supports through the health board system. The Comptroller and Auditor General states in paragraph 2.23 that he did not find evidence of any direct connection between the Revenue Commissioners and the means testing agencies. If that is the case, is it not outrageous? Paragraph 2.23 states:

We did not find direct contact between the Office of the Revenue Commissioners and means testing agencies regarding applicants’ means. However the major portion of DSW information on income of employed and self-employed persons is transferred to it on computer medium by the Office of the Revenue Commissioners and, in addition, much of the verifications process carried out on assistance applications generally involves the submission by applicants of Revenue documents.

The Comptroller and Auditor General is saying there was no direct contact in relation to people’s means. If that is the case, what guarantees can you give us that significant criminals will not be allowed to slip through the net?

Mr. McCumiskey: The Revenue Commissioners jealously guard their information for obvious reasons. We had to have the law changed to allow the flow of data between them and us.

We get a large amount of information from them for the operation of the pay related social insurance scheme, but much of that information is already out of date by the time we get it. We are in effect getting details of earnings in the last complete tax year and that is used as the basis for creating entitlement to the insurance schemes.

As I have reported to the Committee on previous occasions, on the ground, we operate joint investigation schemes with the Revenue Commissioners and we call them joint investigation units. These units are composed of tax officials and social welfare inspectors and are used for fraud cases. There is a full exchange of information in their cases, but on a day to day basis for most means testing, contacting the Revenue Commissioners is not likely to be very fruitful.

Deputy Broughan: With regard to Deputy Byrne’s example, would you have reported to the police or the DPP in the last year instances of intimidation of social welfare officials who administered means tests? We know of at least one case in the past where an official was attacked and seriously injured by an alleged serious criminal. Is there an element of intimidation which is difficult under the current regime? The Taoiseach made the point this morning that he is examining all aspects of an anti-crime package which may well involve your Department. Can you tell us whether there have been elements of intimidation in the last year?

Mr. McCumiskey: Cases of intimidation of our officers are few and far between. I cannot recall any case in the last 12 months. Generally our officers generally go places where they are wanted in relation to the ordinary means test investigations. Occasionally, life is tougher for the special units. Generally, cases of intimidation would be dealt with locally and the gardaí would be informed. Nothing serious has come to my notice in the recent past.

Deputy Broughan: Even in the last two years.

Mr. McCumiskey: Even in the last two years. Any case of intimidation I can remember had nothing to do with organised crime. They were simply cases where usually a small employer because irate with one of our officers and refused admittance for a period of time. I have had no evidence of anything of the nature the Deputy is suggesting, although I acknowledge that in the mid 1980s one of our officers was intimidated and shot because he had been involved in the decision of a particular case. It is a factor of which my staff and I are very much aware. We have to ensure we can do our job and that we do it properly. We behave as we see it entirely within the law. We call on the gardaí when we need their help but, by and large, our officers perform their work without restriction.

¹ See Appendix 5 - letter dated 17 July 1996 from Secretary, Department of Social Welfare.

Deputy Broughan: It is estimated that the administration of means testing costs £15 million. Another key table in the report states that 38 per cent of applicants have nil means. That being the case, would it not be possible to reduce greatly the cost of means testing. Is it not possible to introduce an integrated system? I accept what has been said about the DSS but this would greatly reduce this sum.

Mr. McCumiskey: I am not being facetious, but part of the problem about people with nil means is that one is never sure of that until the investigation is done. Unemployment assistance is perhaps the most active of our means tested schemes and we put the claimants into risk categories. We readily and quickly identify claimants, for example, who live with their parents and whose parents are already on social welfare payments and things of that nature. The assessment in their case is automatic and is not even given to an investigating officer. It is usually done over the counter immediately. At present that involves about 30 per cent of the people on unemployment assistance.

There is only so far one can go with this because at the end of the day I have to be sure that I have done an investigation of some kind because cases will arise in which I am simply not getting the full information. This Committee would be the first to point out the problems. There has been a concerted drive to identify nil means people and put them through the Smallest number of hoops possible. It is a theme which figures strongly in the report I mentioned.

Deputy Broughan: There are two areas which are of great concern to urban Deputies. The first relates to higher education grants. It is not an astonishing admission of this report that there are no home visits or interviews? The report also mentions that there is no direct contact between the Revenue Commissioners and the means testing agency on an ongoing basis. Is it not astonishing that very often people in rural areas, perhaps higher incomes, qualify for higher education maintenance grants while their urban counterparts do not? Is this not a great injustice?

This is not your direct area of responsibility, but you are answering for the whole system this morning. There is a dreadful bias against the urban household and in favour of the rural household. The Chairman might disagree but a report from two years ago made that quite clear. The means testing procedure for higher education grants is unfairly biased in favour of farming families.

The second area relates to the acquisition of medical cards. It was mentioned to me recently how astonishing it is that in a western seaboard county - not the Chairperson’s - virtually every family seemed to have a medical card. Deputy Byrne knows that in our area al income is ruthlessly and rigorously means tested. We fine that despite the discretionary aspect of the chief executive we are severely administered. Yet, in other health board areas and one in particular in the western area, almost every family seemed to have a medical card, despite what clearly were very high incomes.

Again in the medical card area there seems to be gross unfairness against the Eastern Health Board area and a bias in favour of some areas on the western seaboard. Since that is means tested, should we not do something to remove the discretionary element? Should we insist on fill information because people clearly are not declaring very high incomes?

In the areas of higher education grants and medical cards, is the means testing system not a total farce? The Comptroller and Auditor General could have said it in this report. We should have a much fairer system which would give poor urban households a decent crack of the whip.

Mr. McCumiskey: There has been widespread debate about the higher education grants and

I cannot really comment on the eligibility criteria.

Through this group we chaired and are responsible for, our Department will try to ensure as best we can that all the schemes in the public service area - including higher education grants and medical cards, which were mentioned - will use the same data.

Deputy Broughan: Would you agree that some official should, at least, visit the farm enterprise concerned?

Mr. McCumiskey: I cannot comment on that.

Deputy Broughan: By just driving up the driveway he might see that the person had an income of £50,000 or £100,000. yet was qualifying for a higher education grant.

Mr. McCumiskey: In my own organisation it is the practice when assessing means to go and see the property in most cases, but even within our own schemes we have to categorise claimants. As I explained, although we used to see all claimants at one stage we no longer find that efficient or effective. All these public service organisations will administer their own means tests in the light of their own priorities and criteria or the criteria laid down in the legislation. We will try to ensure that they are all working off the same base, that is an important aspect.

It does not cover everything the Deputy mentioned but it is a part of it. For example, for some years we have been giving young people social services cards so that they have RSI numbers. The intention is that the Department of Education and other Departments dealing with grants will use the RSI number to properly identify each claimant.

Deputy Broughan: Do you accept the Comptroller and Auditor General’s recommendation that we should consider a passport type of ID card for all State allowances, based on means testing throughout our lives? When I was in Russia a few weeks ago to help monitor the elections there, I was struck by how difficult it would be to personate in a Russian election because everybody has a unique card to show at the polling booth. That system obviously goes back to the old Soviet society but it had some merits.

Do you accept what the Comptroller and Auditor General is seeking so that we will all end up with an ID card containing a record or memory to provide a passport from lower schemes to higher ones? Would you follow that approach?

Mr. McCumiskey: I could go part of the way with that. I am saying nothing at all about a national identification card, which is a separate question raising many fundamental issues which would certainly require a wider public debate. Is not for me to comment on it. I am content with the notion that everybody should have a unique number for the public service, particularly for the social services within which I include education grants, medical cards and all social welfare schemes.

That is happening anyway. The Revenue Commissioners and the Department of Social Welfare came together some years ago and now use one RSI number as an identifier. Over the past number of years the Department of Social Welfare has been issuing a card which, while it is not an ID card, carries a minimum of information including a person’s name and RSI number. The card facilitates customers who can readily use it to reactivate claims or make new ones.

My hope is - and this is one of the recommendations that that kind of card would be used generally for all social services, but it cannot be used at present. The law simply does not allow that kind of thing because of data protection considerations. but the hope is that it will eventually be used in that way. I am clearly distinguishing that from an identity card for security purposes. It is not just that I do not wish to express a view on that, but it is a completely different issue.

I take the point that people moving from one social service to another in the State should not have to quote different numbers each time. Everybody should have a unique number backed up with something like the social services card that our Department issues. We have been issuing that card for some years to children when they reach 16 years of age. Eventually everybody who is in contact with our Department should have a facility of that nature.

Chairman: Many citizens are subject to means testing procedures each year. It is important that the means testing procedures used by State agencies are made as efficient as possible so as to avoid unnecessary inconvenience to applicants and to review the financial cost of means testing. Where possible a repeat means testing of individuals should be avoided because this has the most adverse effect on applicants and is also a severe drain on public finances. The Comptroller and Auditor General has pointed out possible ways by which to achieve more efficient means testing. We have also heard what the Accounting Officer had to say with regard to the deliberations and the report of the interdepartmental working group on an integrated social service system.

This Committee believes that both reports will form a sound basis for making means testing procedures more efficient in future for the benefit both of the applicants and the State’s finances. In view of the wide public and parliamentary interest in this issue I would ask the Accounting Officer to keep the Committee informed of developments in the means testing area.

The witness withdrew.

THE COMMITTEE ADJOURNED.