Plan to review 700,000 welfare claims by end of year to make ‘savings’ of €520m

The Department of Social Protection is planning to review up to 700,000 welfare claims by the end of 2020 as part of efforts to make “control savings” of €520 million, new documents reveal.

In briefing documents provided to the new Minister for Social Protection Heather Humphreys, officials in the department said there were plans to conduct some 700,000 claim reviews, inspections and investigations during 2020 as part of compliance and anti-fraud measures, although this number may be impacted by the pandemic.

Officials said the department’s special investigation unit comprises 114 officers, including 20 gardaí on secondment, to investigate and detect social welfare fraud.

They said that the purpose of secondment of gardaí was to “help ensure the effective investigation of social welfare fraud”.

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“The emphasis is on direct intervention, high-visibility activity and direct engagement.”

Officials said that in July a survey of 500 jobseekers benefit cases was planned.

“In 2019 over 9,400 jobseekers cases were selected for investigation. This achieved a non-compliance detection rate of 31 per cent,” the document states.

Concerns were also raised about an expected increase in collective redundancies in light of the Covid-19 crisis.

“Based on a significant increase in the number of collective redundancies notified to the Minister over the past number of months on foot of the Covid-19 pandemic, which is running at twice the number so far this year by comparison to the whole of last year, it is anticipated that there will be a significant increase in the number of redundancies processed this year.”

Despite this officials have cautioned the Minister against reintroducing a previous rebate system for employers.

Officials said that the previous scheme “was not a targeted use of the resources of the Social Insurance Fund and was abused by some employers”.

“Reintroducing the rebate scheme would have very significant budgetary implications, particularly at the moment with a significantly higher level of jobs at risk of redundancy than before the pandemic.”

Expenditure growth

Separate briefing notes for Minister for Public Expenditure Michael McGrath warn that “budgetary discipline” will be needed in the coming years in light of growing expenditure in a range of areas under his remit.

The document says that in the past three years “we have already seen expenditure growth rising at a faster than planned rate in response to both political and public demands for policy action, and weaknesses in budgetary discipline in certain areas”.

“Outside of policy decisions, cost pressures arise each year relating to demographics, inflation, public service pay and pensions and areas of expenditure that are demand-led. Post-Covid-19 these pressures will need to be managed even more actively within the tighter expenditure limits that will be available.

“In addition, if staff numbers are not managed adequately, or if the Government were to accede to demands for additional staff numbers in certain areas – e.g. gardaí, nurses – the expenditure pressures would be intensified.”

On housing, the document says “while we will not know the full impact of the Covid-19 crisis until later, it is likely that the reduction in construction activity will have an impact on the number of housing units being delivered in 2020. Output for 2020 had been predicted to reach 25,000 units, however, a recent ESRI report suggests due to Covid-19 this could now be as low as 15,000.”

Pay top-up

Meanwhile, three Ministers of State who sit at Cabinet who were to receive a controversial pay top-up have agreed to gift some of the money back to the State.

In a statement on Tuesday the Government said that the “three Junior Ministers who sit at Cabinet, Minister Jack Chambers TD, Minister Hildegarde Naughton TD and Minister Pippa Hackett, have decided to waive and gift back to the State the increased allocation which was approved by the Dáil last week”.

“This is in addition to the 10 per cent pay cut for all Ministers, which was collectively agreed by Cabinet yesterday.”

While the extra third allowance of €16,288 will be waived, the three super-juniors will share the remaining two allowances ,meaning each will receive an extra €10,000 .

Taoiseach Micheál Martin has said he would be “gifting back” almost €25,000 to the State, but confirmed that it will not affect his pension entitlement.

He is returning a portion of his salary to the State as part of the 10 per cent pay cut he announced on Monday for all Cabinet members and Ministers of State. The going rate for his salary is €207,590, and with the cut he will receive €186,331.

Minister for Transport Eamon Ryan said the ministerial pay cut announced by Taoiseach would save the exchequer more than €600,000 per year.

Speaking at the launch of public consultation for the Luas extension to Finglas, Mr Ryan said the cut was “not tokenistic, it is very real, and it is just a statement by the Cabinet recognising we are in difficult times”.