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Deputy Sean Fleming:   From what?
Ms Niamh O'Donoghue: I beg the Deputy's pardon. It was €22.50 per month and it has been reduced to €9.50 per month. That is effective from January of this year.
Deputy Sean Fleming: How many people did that affect?
Ms Niamh O'Donoghue: It is somewhere in the order of 300,000.
Deputy Sean Fleming: They were all by and large State pensioners, people getting disability payments, illness benefit and such.
Ms Niamh O'Donoghue: It would be-----
Deputy Sean Fleming: The elderly and disabled.
Ms Niamh O'Donoghue: It is primarily elderly, those in receipt of carer's allowance who are resident with the person they are caring for. It is 397,000 recipients. We understand that Eircom has responded to that change and has got agreement from the regulator to introduce a basic-level package targeted specifically at people in vulnerable situations.
Deputy Sean Fleming: How much does that package cost? Is it approximately €19?
Ms Niamh O'Donoghue: It is €19.50 per month.
Deputy Sean Fleming: I received that information by way of reply to a parliamentary question during the week. That only applies to Eircom and the others may follow.
Ms Niamh O'Donoghue: People have choice as to where they take their business.
Deputy Sean Fleming: Am I correct in saying that the monthly reduction was €13?
Ms Niamh O'Donoghue: Yes.
Deputy Sean Fleming: At €13 per month, it would be €156 per annum which is significant for a person in receipt of the State pension, disability payment or carer's allowance.
Ms Niamh O'Donoghue: Again, this would have been a choice made by Government in terms of the budget.
Deputy Sean Fleming: I know it is a budget day decision. Apart from the telephone allowances, were there changes to the energy allowance or the television licence?
Ms Niamh O'Donoghue: There were changes made in relation to the energy allowance. Previously the payment had been based on a unit allowance and effectively-----
Deputy Sean Fleming: Of electricity.
Ms Niamh O'Donoghue: For electricity or gas. The change made was that instead of it being a unit allowance, which actually was very unpredictable from the Department's point of view because obviously the cost of units could change over the course of the year, it is now based on a cash credit in relation to a bill. That cash credit has been determined having regard to the average cost available from all of the suppliers. In essence what has happened instead of getting a unit credit, there is now a cash credit on individuals' bills or, for those who are not customers of Electric Ireland, its cash value.
Deputy Sean Fleming: What is the effective change for the old-age pensioners?
Ms Niamh O'Donoghue: It is a €35 allowance as cash credit.
Deputy Sean Fleming: What was the average value of the old one?
Ms Niamh O'Donoghue: It depended on the supplier.
Deputy Sean Fleming: What was the average the Department worked out?
Ms Niamh O'Donoghue: Sorry, that is the average value. It is based on-----
Deputy Sean Fleming: So there is no cut at all there.
Ms Niamh O'Donoghue: Depending on the supplier, that was the average cost based on average market value at the time.
Deputy Sean Fleming: The only change was really on the telephone allowance. For the average person there was no change for the electricity allowance but there was for the telephone.
Ms Niamh O'Donoghue: Yes.
Deputy Sean Fleming: The Department carried out a review of the domiciliary care allowance. What is the situation on that? It involves a thorny application process, with which I have to help people.
Ms Niamh O'Donoghue: As the Deputy will be aware, we discussed this at length last year. The review was set up. The review is all but finalised and certainly I hope the Minister will be in a position to bring that to Government shortly. The view will treat a number of different things - administrative process, medical process and some of the policy issues that would have been signalled. Certainly any improvements in the administrative process that have been flagged over the course of the review we are putting in place. We are taking on board the various comments of all the stakeholders because as the Deputy will be aware that review included a number of representatives from the different groups. The review process involved talking to everybody in receipt of DCA and providing for public submissions, so it is a very comprehensive review.
Deputy John Deasy: I welcome Ms O'Donoghue and the other officials. This is a complex area involving many payments. I deal with many social welfare queries in my office. I am not saying I know everything about it, but we are quite busy. We have a slight concern over deterrents and how people view the system before they engage in fraudulent activity in particular. I will give an example of an application I printed. In many cases the only deterrent is the warning printed at the bottom of a typical application that states: " Warning: If you make a false statement or withhold information, you may be prosecuted leading to a fine, a prison term or both." Looking at the figures, the chances of that happening are quite small compared with other jurisdictions - I will come to that later.
In its Fraud Initiative 2011-2013, the Department recognised that an effective deterrent regime is important. It noted that effective debt recovery is an integral part of the deterrent regime and that the Department would take appropriate steps to effect the recovery of the debt, which is fine. The Comptroller and Auditor General has very comprehensively dealt with the issues on the surveys on fraud and error. He has identified the shortcomings in the local offices as being training, recovery of debt, etc. However, I am not concerned about after the fact but what happens beforehand and the thought process when an individual is tempted. There is considerably more temptation these days to commit welfare fraud for the obvious reasons. This can be compared with Revenue, for example. Among individuals thinking about going down the road of committing welfare fraud, is there sufficient deterrent in their mind before taking that initial step? That is our concern.
When I look at all these figures - I thank the liaison officer for putting all this together for me - the one concern I have is that we are dealing with it after the fact. Every year the Department issues press releases on the reviews and the savings made across the different payments. However, we need to work out how we can be more effective in deterring people from going down that road at the very beginning. I ask Ms O'Donoghue to outline her thoughts on that, which is clearly something the Department has identified through its initiative.
Ms Niamh O'Donoghue: I will refer to two different points I made in my opening statements. One is that we have a role that requires us to take a balanced view. We have to try to support people through income maintenance who are in vulnerable situations and ensure that need gets assessed and that payments get into payment quickly to those who are entitled to them while at the same time being extremely mindful of control of fraud. I suppose one of the things I would point to, which I mentioned in my opening statement, is that the introduction of our new integrated service presents us with a real opportunity to represent a cultural change in our engagement with our customers. So the social contract that I referred to where people's responsibilities are very clearly outlined is a new dimension to our engagement with customers. Part of that engagement with customers is a much more frequent interaction with them, both in terms of helping them on progression paths but also in terms of reinforcing our control agenda and ensuring that they continue to remain eligible for whatever payments they are entitled to. Absolutely, I understand that it is perceived that the level of prosecution is low.
Deputy John Deasy: Because it is.
Ms Niamh O'Donoghue: Absolutely, I understand that, but what I would point to is the level of overpayment and particularly the number of overpayments that are attributable to fraud - the average overpayment is quite small. So we have to make a judgment when we are bringing things to prosecution as to the resources required and the level of evidence required to support a full-scale prosecution versus the likely outcome, particularly having regard to the circumstances. On that basis we have a matrix that we apply in determining whether we prosecute something. That has regard, obviously, to the amount of money involved. It has regard to the number of times somebody has been in offence.
Deputy John Deasy: I believe 2% to 3% of fraudulent cases are referred to prosecution.
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