Paul Murphy highlights underpayments in social welfare audits

Sorry, I have been going in and out and up and around. Thanks a lot for the presentation and the work. There has been a lot of talk about overpayments and I want to focus on underpayments. The Control Order and Order General report on regularity of social welfare says that as a result of a control survey into job seekers allowance, 4.1% of claimants surveyed were being underpaid and the same survey for the state pension non-contributory found that 6.3% of all claimants were being underpaid. Have you got any kind of total estimate of how many people are being underpaid or all you have is that kind of control and then you can extrapolate from that? I don't have the figure with me but all our control surveys calculate the numbers. I can certainly send it in to the notes committee. We have been doing these control surveys for a long time so we can do a pretty decent estimate of what the amount of underpayments is. If we identify an underpayment deputy we correct it and we back pay it. There's no question. Yes. But it has to be identified and very often it's the same reason as an overpayment. People don't tell us that actually I've got less days of work or less income. They just don't think to tell us and that's the main reason. And obviously that figure wouldn't capture someone who doesn't, that captures those who are on the payment but are not getting a sufficient amount of the payment. It doesn't capture someone who hasn't applied for the payment or perhaps was previously denied the payment and hasn't reapplied for the payment or something like that. There's another portion of underpayment or non-payment sitting out there separately. So I think definitely you're right. If somebody doesn't apply we obviously don't know. If somebody has applied and we've granted a payment, I think the evidence is the amount that we grant at the time is the correct amount. It's because circumstances change. So people need to tell us their circumstances have changed both so that we don't overpay them, both so that we don't underpay them. And I suppose, particularly in job seeker schemes, as I said, Deputy, most people are in and out of job seekers quite quickly. So they might well be underpaid but they might think it's worth a candle to come in and get an extra 20 euro for three weeks or whether, you know, they're back at work and that's the end of it. Yes. And so we've got 4 percent, 4.1 percent in job seekers, 6.3 percent in non-contributory state pension. In terms of other social protection payments, do you think the figures are similar? They'd be similar, definitely. I don't have the data in front of me but we'll get it to you. It is an issue. Overall, the net overpayment rate is still the 3 percent because the net overpayment rate takes account of overpayments and underpayments. Yeah, but obviously I'm sure you agree that for the person who's getting underpaid, it's a cold comfort that someone else might be getting underpaid. Payment integrity is not just about overpayments, it's about underpayments. And we do try to communicate to people. And to be honest, and I'm saying something here which is true in my experience, we have inspectors and a lot of our inspectors, particularly pensioners, spend most of their time helping the pensioner to get the correct amount. Because when they go out to do a survey, they find actually you have entitlements that you haven't claimed or your circumstances have changed. Yes. Like they're human beings at the end of the day, they're going out, they're trying to look after people rather than penalise them. Good, that's good to hear. Yeah, if you could get me figures on the estimated number of underpayments over the past number of years across the board, that would be interesting. Then to go on to the payments that are not taken up. I don't know if you have a term for that similar to underpayments. Effectively, we spoke previously about the tax gap, which is the gap between what's raised and what should be raised. Effectively, a social welfare gap of people who are not claiming who could be claiming. I think you could describe it as unclaimed entitlements. That's it. I mean, technically, you're not entitled to it until you apply for it. You could be entitled to it. That's the take-up. There have been some studies. The two main schemes, Deputy, that would appear to be underpayments are a working family payment, because we know it's an income-based payment. The SRI have estimated the underpayment rate of somewhere between 30 and 50%. Yeah. And paternity payment, which we know, I don't have the number in front of me, but we know the take-up of paternity should be roughly the same as maternity, and it's not. So we know there's an underpayment. Now, what you call it as an unclaimed entitlement, as the controller said, if you haven't claimed paternity, it's likely you're still getting your salary. So people are saying, well, do I give up my pay in my employment for a week to get the estate payment? On the working family payment, the one caveat I'd have about the ESRI estimate is about 60% of our loan parents would be entitled to working family payment, and they do sums in their own heads about, am I better on the loan parent payment or the working family payment? Okay. So it might be that the level of underclaiming and WFP is actually compensated by some element of people taking a choice as to which payment is better for them. But the working family payment is definitely underclaimed. And we've done a lot of promotion on that scheme, a lot of promotion on it. Okay. Well, I was going to come to that precisely. I mean, do you have an opinion as to why some payments have lower levels of uptake than others? Sorry, definitely I missed that. No problem. Do you have an opinion as to why some types of payments have lower levels of uptake than others, higher levels of unacclaimed entitlements? I think if you're sick or you're unemployed or you're disabled or you're a carer, you know, but the payment, if you're somebody in work, it doesn't cross your mind that working family payment. There isn't the awareness. It's an awareness issue. And so that's something we do have to look at. Is there a relationship with means testing in your opinion? Well, on the working family payment, it's an income test rather than a means test. And the income test is done once a year. So it's a once a year income test on a person's income. Once you're in, you're in for the year. Then we do your test a year later. So there shouldn't be a concern. We don't look for your bank accounts. We don't look for your assets. It's just purely your employment income. I mean, the SRI in that paper make the point that age-related benefits or universal child-related benefits tend to have relatively high take-up rates. Benefits with complicated eligibility criteria in which are means tested tend to have much lower take-up rates. Would that be accurate in your assessment? I think that is fair, definitely. But I'd go back to the point. I'd say, for example, a child support payment is a supplementary payment if you're a carer or you're unemployed or you're disabled. So there's no barrier really to claiming it. I think the take-up on those, the child support payments or those schemes is okay. I think when it comes to children payments, the working family payment is really the one I'd focus on. The child benefit is universal and the other child payments, they're automatic with your primary payment. I don't think there's too many people who are unemployed who are not claiming the unemployment payment or disabled not claiming the disability payment and the child payment comes with it. So, yeah, I mean, in terms of, I mean, the problem with the, or the troubling thing with the non-take-up of the working families payments, taking on board your point in terms of lone parents, but is that potentially almost half of those who are entitled to this important payment, which is preventing people being in deep poverty while in work, are not taking it up. Could you explain to me what what work you are doing and, if you can, what money you're putting into promoting people taking their entitlements? Oh, Niall, maybe. Niall would actually have the responsibility for our communications areas. Question? Thank you, Deputy. So, as the Secretary has said, we have promoted the working family payment extensively over the last number of years. I don't have the exact figures to hand just on how much the communications campaigns have actually costed in relation to it. But what I could say in relation to it, working family payment is one of our in-work benefit supports. So, by default, you don't have to necessarily be in receipt of a core primary social welfare payment. So, you're coming up against an issue that a lot of people in receipt of working family payment would have migrated, as the Second General has said, from an existing core weekly social welfare payment, whether it be lone parents or job seekers. So, they would have been familiar, they would have been informed about it by our case officers. It's that cohort that are already in employment that don't have that necessary need that we have to really target. And this is going to be a long-running issue that we're going to have to continuously promote and continuously always-on communications campaigns in relation to it. Because, as you've identified, there is significant issues in terms of take-off. The other thing, Deputy, I might quickly say, previously, we required recipients of working family payments to get their employer to certify their hours they worked. And we got feedback from customers that that was a barrier. So, we did remove that in the last few years. And we have seen in the last, particularly in the last year, an increase in take-up and working family payment as well. Thanks a lot. Just finally, or almost finally, one of the striking features of our social protection system compared to other European countries is the very high percentage of means testing. So, about a fifth of ours compared to about a tenth, I think, compared to the EU average are means tested. I know the department started a review of means testing, I think, more than three years ago. Where's that at? Why hasn't it been published? When will it be published? I think it's important to say international comparisons are fraught with danger. In a lot of countries, the measure of social protection spend is on the central or federal spend. And actually, in a lot of European countries, it's municipal authorities and state authorities pay the means tested. So, they're not counted. So, it looks like a huge amount of social insurance in a small amount, but they're not counted in the international comparisons. And actually, if you look at the poverty reduction rate of social protection expenditure, we're in with it many looks Nordic countries in terms of the effect of social welfare. When it comes to the means review, I got a draft of that review in the summer. I've sent it back for more work. The reason I've sent it back for more work is it was started, as you said, a number of years ago. There's commitments in the program for government which make a lot of the work redundant. For example, it would take the, to eliminate the means test on the carer's payment, introduction of a working age payment, pay-related benefits. So, I've asked for it to go back and be worked in the context of the program for government commitments and the changes that have happened in the meantime. I expect to get a new draft of it early in the new year and I'll be bringing it to the Minister. And then just finally on that. So, with the kind of reworking of the report, is that with an idea to meeting the commitment of the program for government to carry out a comprehensive review of means tests across the social welfare system? That is going to be that. That's going to be it. And I think, again, I've said this before, but it's important. The outcome of a means review, the social welfare system has developed incrementally since 1838. Deserted wives had one means test, loan parents had another one, job seekers, a different one, disability. If you try, but some people think it's going to end up with one means test for everybody, it's going to be impossible. And if you did, it would either be far too expensive or you'd end up with a lot of losers. So, I think people's expectations of what's deliverable in a system that fell out over nearly 200 years in an incremental fashion, just to put that caveat out there, and the complexity of this is very complex. But that complexity also has real costs. There's a whole bunch of people in your department working on these. It's not just a stress for the people who are doing it. So, I do think it's more policy point, but moving as much as possible towards universal benefits has significant advantages. Thanks a lot.