Republic’s Social Protection budget leeching €100 million pa…

Interesting editorial in today’s Irish Times on the inefficiencies in government spending… The biggest culprits? Social Protection and Education. Hardly surprising. But still at a time when the exchequer has long since gone dry, the Times calls for a toughening on the rules:

The Department of Social Protection made welfare benefit overpayments of almost €100 million – nearly double the 2007 figure. In all 63,310 claimants were overpaid. Fraud accounted for one-third of these excess payments, and human error – by those applying for benefits – for almost half. Of the remainder, 12 per cent involved overpayments to those no longer alive and 6 per cent were described as errors by the department.

The department’s failure to prevent these irregularities was compounded by its inability either to recover money from those who had fraudulently obtained €35 million – or indeed to prosecute the offenders. The CAG’s report notes that the recovery rate of fraud-related debt is unknown, while fewer than 3 per cent of fraud cases are referred for prosecution.

This is not about cutting benefits. But adopting best practice from the tax raising end of government, the Revenue Commissioners:

Last year Revenue collected €34 billion in taxes, thanks to high levels of compliance by taxpayers, and its willingness to use tough enforcement procedures. One department of state – it would seem – can ignore high levels of fraud, fail to recover most of the money owing, and also fail to prosecute welfare fraudsters.

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  • Greenflag

    Perhaps it’s just as well that ‘leeching ‘ has been in effect .

    At least to judge by Nobel Prize Winner Economist Joe Stiglitz who said that austerity has “almost never” worked as a solution to economic downturns.

    Joseph Stiglitz said the speed of political change is too slow
    He said austerity instead turns downturns into recessions and plunges recessions into depressions.

    Professor Joseph Stiglitz was speaking at the opening of the International Bar Association annual conference in Dublin last night.

    The Nobel laureate in economics said there must either be more Europe, through a common banking system, or less Europe, through a partial eurozone breakup. Professor Stiglitz said the present “half-way” position is not viable.
    He warned that the speed of political change is currently too slow for economics and that Europe will stay in or near recession for “an extended period of time”.

    Interestingly at the British Labour Party Conference Ed Milliband becomes the first major western politician to open his mouth on the fact that the ‘banking system ‘ needs major reform which it appears unwilling to ‘self regulate .
    Neither Obama , Romney nor Merkel nor Hollande nor Cameron have had the gall to suggest a ‘tougher ‘ stance with those responsible for the current world wide monetary and banking chaos .

    ‘One department of state – it would seem – can ignore high levels of fraud, fail to recover most of the money owing, and also fail to prosecute welfare fraudsters.’

    One Department of State ? What a joke . Just have a count of the number of Governments (USA , UK, Ireland , Germany etc etc ) who have allowed /permitted /turned the other cheek and enabled the largest banks and financial institutions on the planet to indulge in a decade long international ponzi scheme launched from their weapons of mass financial destruction -CDO’s -leveraged derivatives and fixing of Libor rates defrauding millions of savers etc .

    100 million euros is nowt . It’s about what two CEO’s of any of the major large banking or financial institutions would earn in a year when bonuses and stock options are added in !

    Their bonuses are now being paid for shedding surplus to requirement financial executives in the City of London and Wall St .

  • Greenflag

    The Milliband threat to break up the banks !

  • Henry94

    Without wanting to resort to rhetoric the leeching of billions from the economy to pay back bond-holders makes the over payment of a social welfare look like a drop in the bucket.

    Yes, fraud must be curtailed and efficiency improved but unless and until we address the bank debt we are going nowhere anyway.

    We abandoned free-market economics when we agreed to the bail out so the only question left is what form of socialism do we want. One where the state looks after the rich at the expense of the poor or the other way around.

    We need tax increases on the wealthy in Ireland to meet the demands of that class of people for state handouts. The traditional argument against progressive taxation is that it distinctiveness enterprise and discourages risk-takers. But we didn’t have risk-takers. We had each-way gamblers who couldn’t lose because the state was underwriting the risk. So the state was the real risk-taker. Time to pay the piper.

    Social welfare payments largely get spent in the local economy so the 100 million was just put into circulation not taken out of the economy. Payments to bond-holders is dead money.

  • gendjinn

    OMG!!!! THE CRISIS!!!!

    64,000 people on welfare got e30 more a week. Oh the humanity!

    The sole reason this is even raised as a problem is because capitalists who made reckless investments suddenly embraced socialism. It is disgusting that they get an interest rate on their investment without any risk, its one or the other not both.

  • Greenflag

    @ Henry 94 ,

    ‘Yes, fraud must be curtailed and efficiency improved but unless and until we address the bank debt we are going nowhere anyway.’

    Indeed but the elected politicians those in power are afraid to do anything and those not in power are afraid to say anything bar the exceptional Ed Milliband who seems to have found his voice and not before time .

    Don’t know if anybody above picked up on this ‘gem ‘from an American Conservative on the Beeb

    Some extracts

    ‘I did not vote for him in 2008, but I expected at least that I could count on a liberal Democratic president to rein in Wall Street’

    ‘Economically, Mr Obama has continued Bill Clinton’s practice of letting Wall Street dictate economic policy.’

    ‘The best that can be said for him is that he hasn’t done as poorly as he might have with the terrible hand that was dealt him.’

    ‘No doubt Mr Obama will be more sensitive in addressing the enormous economic inequality in the US, and hostile to the concentration of power in the financial sector than Mr Romney, the extremely rich former chief of the investment firm Bain Capital.’

    ‘But given how close the Democrats have become to Wall Street since the Clinton era, he will not be much better.’

    Sadly I have to agree with Mr Dreher . Which is why barring a black swan event President Obama will be re-elected and the USA is in for another 2 years of stasis until the 2014 mid terms .

    the full story