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Ó Snodaigh introduces Social Welfare Amnesty Bill

18 January, 2013 - by Aengus Ó Snodaigh TD


Sinn Féin Social Protection spokesperson Aengus Ó Snodaigh today moved the Social Welfare Amnesty Bill in the Dáil to allow those in receipt of overpayments in social welfare payments, often through no fault of their own, to come forward without fear of penalties, prosecutions or demands for repayments, and regularise their payment and have a line drawn in the sand over the past.

Speaking after Minister Burton rejected the bill in the Dáil this morning Deputy Ó Snodaidh said “it is regrettable that the minister has turned her nose up at this amnesty and the €50 million in savings that it would have made.”

Speaking during the debate in the Dáil this morning Deputy Ó Snodaigh said;

“Today Minister I believe that what I am putting forward is an innovative and practical proposal to deal with a situation many on social welfare payments find themselves in. I hope you will give it serious consideration and at the very least allow it to go to committee stage to allow for debate.

“A Social Welfare amnesty would allow those in receipt of overpayments in social welfare payments, often through no fault of their own, to come forward without fear of penalties, prosecutions or demands for repayments, and regularise their payment and have a line drawn in the sand over the past.

“There is no denying that there are a number of people receiving more than they are entitled to but they are afraid to put their hand up and alert the department because they simply could not afford to pay it back. They are caught in a bind, if they come forward they will end up with less money weekly and they or their kids will suffer. You may say its money that doesn’t belong to them, that it the state’s, it’s the taxpayers’ and yes technically you may be right, but I will show you how this state has one yardstick for the poor, and another for the rich.

“A report in the Irish Examiner on New Year’s Eve said it all for me, while the State will attempt to recoup every last cent from a pensioner, or a single mother who erroneously received an additional €10 a week for a year, no attempt will be made to recover the €160,000 overpaid in error to the HSE director designate Tony O’Brien since 2006. This despite the Department asking the HSE to take corrective steps.”

ENDS

Full text of Deputy Ó Snodaigh’s speech follows:

Aengus Ó Snodaigh TD
Social Welfare Amnesty Bill

Ba mhaith liom ar dtús báire buíochas a ghabháil leo súid a thug cabhair dom an bille seo a chuir le chéile agus siúd a thug comhairle dom maidir leis an tairiscint difiriúil agus abhfuil samhlaíocht ag baint leis atá san bille seo. Ach go háirithe luaim mo comhairleoir parlaiminte Miriam Murphy atá ar sos máithreachas faoi láthair, mar gan í ní bheadh críoch curtha leis an bille seo, ón chéad uair a dhéan muid plé ar an choinceap breis is bliain ó shin.

An fáth ar dtús gur thosnaigh muid ag plé maithiúnas ná chun deileál leis an sáinn ina bhfuil siúd atá gafa san córas leasa shoisialta a shíleann, nó atá fhios aca, go bhfuil iomarca á fháil aca, nó a fuair iomarca sa thréimhse atá thart ach atá eagla ort sin a adhmháil toisc nach mbeadh sé ar a gcumas an airgead a aisíoc in aineoinn nach ortha an locht go minic.

Today Minister I believe that what I am putting forward is an innovative and practical proposal to deal with a situation many on social welfare payments find themselves in. I hope you will give it serious consideration and at the very least allow it to go to committee stage to allow for debate.

A Social Welfare amnesty would allow those in receipt of overpayments in social welfare payments, often through no fault of their own, to come forward without fear of penalties, prosecutions or demands for repayments, and regularise their payment and have a line drawn in the sand over the past.

Minister are living in very distressing times, and everyone has been focussed on the economy and the cost of everything in recent years. Irish people are probably the most knowledgeable people on how an economy runs and falters in the world. But because of the scale of the collapse, because of the huge burden of having to shoulder the repayment of a debt that not theirs, and because the approach of this and the previous governments is failing and in fact is increasing the burden on ordinary people, people are looking as the saying goes, outside the box, they are being imaginative. I have been lobbied as have other TDs by many citizens with interesting proposals on how to extract ourselves this state out of this crisis, how to share the burden more fairly or land it where most of the fault lies, the gamblers, speculators the financial institutions themselves.

I and my party have been challenged by this government and the last to come up with alternatives, and we have. And we have published them annually as alternative budgets, only to have it rejected without analysis by blinkered government ministers and their backbenchers. I urge, especially Labour TDs, even at this late stage to pause, take time out read the Sinn Féin submissions, or if you are afraid it may contaminate you, try reading the TASC, Social Justice Ireland, and even the trade union movements alternatives. They all have a logic behind them, that there is an alternative to austerity, there is an alternative to the course Fianna Fáil took and now adopted with gusto by this government.

There is always an alternative, sometimes not palatable, sometimes riskier, sometimes more complex, but there is always and alternative. The common thread between all the submissions I mentioned is that they seek protect the vulnerable in the first instance and go after the wealth that is being held by a few in our country.

It is in that context that I set about my social welfare amnesty proposal. But rather than just propose a small saving to the Exchequer and let the minister dismiss it, I decided that I would put meat on the bones of an idea. An idea which I was looking at after listening to discussions with yourself, minister and your predecessor, and also with her officials in Social Protection Committee about Control Savings, Fraud, and Overpayments.

Many people are caught in a bind, we are acutely aware that most social welfare payments are inadequate to meet the needs of dependents. Many social welfare dependent households are well below the poverty line, struggling to pay the bills or put food on the table. If they were receiving through human error, theirs or the departments an additional five or ten euros a week, it would make a huge difference to their lives.

Some don’t know they are getting over the odds, others do but won’t say, and others set out to get it. But what links all of those together is that they couldn’t if asked when the overpayments are discovered repay it or the fine and /or interest on top, especially if it had built up for a number of months or years.

I will quote from two of the organisations who responded to the public consultation on this bill. The Free Legal Advice Centres said that “FLAC are also convince that many of the mistakes in the system which give rise to waste and inefficiency arise through the sheer complexity of the system and the inability of those who seek to access it to understand it. Indeed as you will well know, very often even those who operate the system don’t understand it properly,”

While the INOU had a number of concerns relating to what would happen to those who didn’t realise they were being overpaid and who didn’t avail of amnesty and the need to change the onus to correct the error away from the applicant, they did say “in general we would be supportive of the scheme” and that “it could usefully be used to resolve existing issues”.

I would gladly, if the minister would allow this bill go to committee, try to address those concerns there and alter the bill if needs be to allay any fear of a victimisation of those genuinely unaware of being in receipt of overpayments and there are I believe thousands.

Anyway back to the concept in the bill. Quite regularly there are media headlines screaming at us about dole cheats, fraudsters and figures of €500 or €600 million are bandied about, whereas in fact the real figure is much much less. The actual figure recovered last year for instance will be near €30 million, and it has been in the €20 millions for the last few years. The hugely inflated figure is in fact what is known as a control saving.

There is no denying that there are a number of people receiving more than they are entitled to but they are afraid to put their hand up and alert the department because they simply could not afford to pay it back. They are caught in a bind, if they come forward they will end up with less money weekly and they or their kids will suffer. You may say its money that doesn’t belong to them, that it the state’s, it’s the taxpayers’ and yes technically you may be right, but I will show you how this state in one example has one yardstick for the poor, and one for the rich.

A report in the Irish Examiner on New Year’s Eve said it all for me, while the State will attempt to recoup every last cent from a pensioner, or a single mother who erroneously received an additional €10 a week for a year, no attempt will be made to recover the €160,000 overpaid in error to the HSE director designate Tony O’Brien since 2006. This despite the Department asking the HSE to take “corrective steps”.

Any of us here in this chamber could list of cases upon cases of under and overpayments, and the struggle sometimes to regularise the payments.

One case which came across my desk when I was preparing this legislation was a person moving from a disability payment to the Partial Capacity payment. The women in question spotted an error, reported it, but then it fell to her to pay it back. This a very stressful time of her life, as her brother had just died, she was very sick and at same time she was being told that out of the meagre payment she was getting that she would have to fork out for somebody else’s mistakes.

When the media run their banner headlines, fed often by the ministers of social protection, about “€600million in social welfare fraud” they forget to say that most of it is in fact error, clerical and applicant. They forget to say that the reason for such a high level of error is due to the complexity of the various social welfare schemes, the means tests employed and the complexities in some of the forms that need to be filled in. Don’t forget that upwards of 20% of the Irish population have poor literacy skills.

If any further proof were needed as to the level of error and the complexities, one need only look at the level of social welfare appeals which are successful. More proof can be found in the Comptroller and Auditor General’s Report – the Department’s Fraud and Error Survey which reported in September 2010 on a random sample of 1,000 job seeker allowance cases.

This review found that 16% of claims were either being over paid or underpaid and these were adjusted or terminated accordingly. The reason given for the adjustment/terminations were suspected fraud (3%), claimant error (8%) and departmental error (4.4%).

If the error is not detected quickly, and most of them are not, then the sum of overpayment mounts very quickly, and it becomes daunting to the applicant when they discover or they are informed by the department of the figure. An extra €10 a week for two years is over €1,000 which the Department then demands be repaid. And obviously is somebody is in receipt of the full rate they don’t have an alternative source of income so it must come out of their weekly stipend from the state. Anybody here in the chamber, if any, who had to eek out a life on social welfare payments will understand how daunting having to pay back a €1,000 would be for that person. That is why many take the chance and say nothing, they literally can’t afford to say anything.

To answer critics who may say during this debate that a social welfare amnesty would reward benefit cheats, I will point out that similar to all amnesties offered by police or the authorities, like the tax amnesties or knife amnesties. It’s about drawing a line in the sand, it’s about making the situation better, whatever may have happened in the past. In this amnesty it’s about saving the state, the taxpayer money.

When looking at this idea we looked for previous social welfare amnesties, while there were two, one in 1991 and one in 1993. Both of which were unmitigating failures because they offered so little in way of an incentive for people to engage. They only guaranteed to waive the interests on the overpayments, and Dr Michael Woods when introducing them made it clear that you could still be prosecuted and that only in the rarest of occasions would part or all of the overpayment be waived.

These earlier amnesties were something of an afterthought designed more to take some pressure off a government that was offering tax amnesties to the rich, and they were pitched mainly at the self-employed and at employers. Interestingly, the now retired big Stick Proinsias de Rossa, then leader of the Democratic Left before he took over your party minister said the amnesty in 1991 was designed to give a bogus veneer of equity to the tax amnesty and was intended to “salve the consciences of the Labour Party Ministers who so meekly went along with Mr Albert Reynolds’s proposal to wipe the slate clean for major tax cheats”. Only 17 applied for the amnesty from the 500 or so enquiries made. While the 1993 amnesty saved over €1.25 million it had nearly 600 cases dealt with. The US state of Colorado offered a similar fraud amnesty in 2011, waiving penalties on those who availed of the amnesty for incorrectly collecting unemployment benefits while working or incorrectly reported (knowingly) their hours and earnings. New South Wales in 2008 introduced an amnesty to try tackle fraud and overpayment of a rental rebate. This provided protection from prosecution and debt recovery of overpaid rental rebates if person came forward during the three month amnesty period with a promise of tougher provision to follow after the amnesty against those who failed to avail of opportunity.

Just because it has been successfully tried elsewhere doesn’t mean it can’t work here. It can’t hurt to try, at very little cost to department and state you could dangle this carrot and save the taxpayer in the forthcoming year a small fortune. If we estimate that say 10,000 people avail of this amnesty, a small number considering the numbers in receipt of payments, and we take the average of those cases the department reviewed to come up with the famous €600million savings they predicted, the average control savings from those being overpaid is over €7,000 gives us a figure in a partial year of €55million. Not to be sneezed at minister at any time, but considering your cuts in Budget 2013, could be usefully used to reinstate some of those cuts.

You may ask yourself why come forward, well unlike the amnesties in the 1990s this would ensure that for those availing of it there would be no penalties, no prosecution and no demands for repayments. A line in the sand – a clean slate. But let me be crystal clear, minister in case you try to misinterpret, mis-represent what is intended here, this amnesty will not be available to serial fraudsters, those involved in identity fraud. It will not cover anyone making multiple claims in multiple names, nor would it cover someone who is collecting the pension of a dead person. I have been accused by the minister as not supporting action ask welfare fraudsters, but I have minster called for prosecution for these fraudsters, and if at any stage a social welfare bill is dealt with properly in the house, with a proper committee stage rather than the usual guillotine, maybe you would hear that support fully.

Write down of bank debt, rescheduling of loans etc.

Interestingly Small Firms Association in 2011 called for a social welfare amnesty. Other than a fraud amnesty offered by the State of Colorado in 2011

Most up to date figures out of a Social Protection budget of €20 in 2010 overpayments were in the region of €83million, nearly €48million of which was down to error, and less than a third was suspected fraud.

What the Bill provides for those people caught in the bind is a one-off opportunity to come clean without fear of punitive measures or of being crippled by debt. And it allows the department to drawn a line under these cases, and to then with a clearer conscience pursue those who are still illegally.

The amnesty would be followed by a two month intensification of the department’s standard anti-fraud and control measures. Knowledge of this will help to enhance take up of the amnesty.

The amnesty would involve the Department foregoing the back payment of the overpayments. But this would be very significantly outweighed by the size of the control saving. The reality is that the Department only ever re-coups a tiny fraction of its overspend. Sometimes this is because the person no longer receives social welfare payments, or that to take anything greater than a negligible sum would cause the whole family to become destitute. Or, as in the majority of cases, there is simply no way to establish when the over-payment commenced.

There are a number of people I want to particularly thank for helping me prepare this bill, in particular my parliamentary assistant Miriam Murphy who is currently on maternity leave and wasn’t hear the debate, but I know she will unless in maternity ward be following the debate from home. I also want to thank the staff in the Library here who undertook an initial piece of research on social welfare amnesties in other countries, which proved to be useful in framing our approach as I put this legislation together. I also wish to thank a number of organisations who after I had circulated the heads of the bill, commented and made useful suggestions around the approach I was taking. They included the INOU and FLAC and also want to thank my colleagues who also commented and gave constructive criticism and helped me put together what I believe to be an innovative approach to dealing with the stressful situations a small minority of those who are in receipt of some of the 1.4 million social welfare payments weekly, where they know or suspect that they are in receipt of an overpayment, yet know they can’t afford to repay that money.

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