THE GOVERNMENT has agreed to permanently write off €83 million that was overpaid by the Department of Social and Family Affairs to recipients of welfare benefits.
Records obtained by The Irish Times show that officials believe the money is “irrecoverable” as it would not be economically viable to pursue those who received overpayments.
Most of the €83 million represents excess benefits made to more than 200,000 people. Most of these occurred prior to the year 2000.
The decision to write off the payments follows the establishment of a new computer system to manage the department’s debts. Officials decided not to transfer outstanding cases that were more than eight years old or involved sums of less than €5,000.
Correspondence from the Department of Finance shows that senior officials have agreed to the sums being written off, subject to a number of conditions.
These include ensuring that in future the Department of Social and Family Affairs informs the Department of Finance on an annual basis of progress made in the recovery of its remaining outstanding debt.
A spokeswoman for the department confirmed yesterday that the sums had been written off, adding that most sums were less than €2,000 and had already been written off for accounting purposes.
“The department is committed to ensuring social welfare payments are available to those who are entitled to them,” the spokeswoman said.
“We are also determined to ensure that abuse of the system is prevented and is dealt with effectively when detected. In this regard the control programme of the department is carefully monitored and the various measures are continuously refined to ensure that they remain effective.”
Overall, the Department of Social and Family Affairs had about €150 million in overpayments to welfare and other recipients on its books at the end of last year.
Many of these overpayments are believed to be as a result of fraud or payment errors.
Details of special “fraud and error” surveys conducted into various welfare schemes obtained by The Irish Times show tens of millions of euro are being lost on individual schemes.
For example, the total exposure annually as a result of fraud and error is estimated to be about €36 million for child benefit, €17 million for the State pension (non-contributory), €5 million for the family income supplement and €3 million for illness benefits.
These surveys involved social welfare inspectors reviewing a random sample of cases – generally in the region of 1,000 – to assess the fraud or error.
Officials say the results were used by scheme managers to address the risks identified.
The highest rate of fraud in the schemes surveyed was found in child benefit.
This scheme involved surveying 500 Irish nationals and 500 foreign nationals.
Fraud rates were 1.7 per cent among Irish nationals and 13.9 per cent among foreign nationals, giving an overall level of fraud of just over 2 per cent when weighted against the overall client base.
The highest error rates were found in the State pension (non-contributory) affecting some 17 per cent of cases.
A spokeswoman for the department said these surveys were a key element of its control strategy. The information helped officials identify where there was a high risk of fraud or error and to address these issues in a systematic way.
She said over 600 staff at local, regional and national level were engaged on a full- or part-time basis on work related to the control of fraud and abuse of the social welfare system.
