THE Government may yet regret it ever decided to try to discover the "real" level of unemployment. For the results of a survey comparing the live register with this year's labour force survey indicate widespread fraud in the system and present the Cabinet with a big political headache. They also raise major question marks over the control systems operated by the Department of Social Welfare in recent years.
A reasonable interpretation of the survey shows that up to one-third of the £1.06 billion unemployment budget - some £350 million - may be fraudulently claimed.
The short-term political response has been to announce a further clamp-down on fraud. But such is the extent of the problem that Ministers know it will take years to tackle.
Ironically, because the labour force survey data is confidential, the Department of Social Welfare enforcement section will not be able to pursue those identified by the CSO survey.
What the Government decided to do was to get the Central Statistics Office to compare the monthly live register details with this year's labour force survey. The survey, completed' every year, involves collecting information from a sample of households, including the names and addresses of those living in selected homes and details of their employment.
There has been considerable speculation about why the live register was showing a much higher level of unemployment than the labour force survey - 80,000 higher by the latest count.
The results of a sample of those on the live register covered by the labour force survey - involving about 2,600 cases - has thrown up explosive results. It showed that 16 per cent of those in the sample were working full-time and therefore not entitled to claim unemployment payments. A further 14 per cent were not resident at the address shown and could not be traced, while in an additional 14 per cent of cases relatives were living at the address mentioned by the claimant.
Obviously in the case of those working, welfare fraud is involved. A mixture of explanations could be advanced for why claimants were not at the addresses shown on their claims. However, in many of these cases fraud must also be involved. In some cases, for example, people living with parents may be giving an address apart from their home address, in order to claim higher welfare payments. Full details are to be published shortly by the Central Statistics Office.
How much is social welfare fraud costing? The Minister for Social Welfare, Mr De Rossa, believes that a stepped-up anti-fraud campaign could save £100 million a year. However, on the basis of the survey, the full extent of fraudulent claims could be much more, probably more than £350 million.
This is a significant sum in budgetary terms - a Minister for Finance would be glad to have this much for Budget day tax cuts and welfare increases.
The Ministers for Enterprise and Employment and Social Welfare have promised to bring forward a range of anti-evasion measures, including better controls, more targeted field investigation and closer working relationships between departments and agencies.
However, what is in question is the whole operation of the social welfare system. This will cause political difficulties for Mr De Rossa in particular, but also raises serious questions for his Department to answer surrounding how such wide-scale abuse has been allowed to build up over the years.
Representatives of those genuinely unemployed and seeking work were correctly pointing out yesterday that such results do a disservice to their members. But the fact is that the survey is the strongest indication yet of widespread cheating of the system which, if rooted out, could fund higher payments for those genuinely out of work as well as lower taxes.
