We will engage with the Department of Social Protection to examine its 2024 appropriation accounts. I welcome Mr. John McKeon, Secretary General, Ms Teresa Leonard, deputy secretary general, Mr. Niall Egan, assistant secretary general and Ms Deirdre Shanley, assistant secretary general. We are also joined by witnesses attending in a representative capacity from the Department of public expenditure and reform, Mr. Robert Scott, principal officer, and Ms Niamh Ní Shúilleabháin, assistant principal officer. From the Office of the Revenue Commissioners, we are joined by Mr. James Twohig, assistant secretary general of the personal division, and Ms Leeann Kennedy, principal officer. We are joined by officials from the Office of the Comptroller and Auditor General, including the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness to the committee, and Mr. Ronan McCabe, audit manager. They are all very welcome.

Before we begin, I wish to explain some limitations to parliamentary privilege and the practice of the Houses regarding reference witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. This means that they have an absolute defence against any defamation action for anything they may say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks and it is imperative that they comply with any such direction. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity.

As members are aware, the Department of Social Protection plays a key national role in the distribution of income to assure social cohesion and improve the equity of economic outcomes, and in ensuring the efficient operation of the supply side of the labour market. To these ends, the Department operates a wide range of income support, welfare and labour activation schemes. Expenditure on the Department schemes is divided between two accounts, the appropriation account for Vote 37 and the account of the Social Insurance Fund. The Vote account is funded mainly through direct Exchequer issues while the Social Insurance Fund is financed mainly from pay-related social insurance contributions paid by workers and their employers. Transactions between the two accounts are numerous and complex.

A useful appendix to the appropriation account aggregates the Department’s scheme expenditure by broad categories, such as pensions, support during illness or disability, or support for those of working age. The appendix indicates that the Department’s overall expenditure on scheme payments in 2024 totalled nearly €26.2 billion. This represents an increase of 8.4% from the €24.2 billion expended on schemes in 2023. Within the total, spending on State pensions was up 10% year-on-year, reflecting both payment rate increases and strong demographic impacts.

The Department’s expenditure on administration costs is distributed between the Vote and fund accounts and totalled a net €731 million in 2024. This included pay costs of €371 million and payments for agency services totalling €153 million. In addition, the Department avails of a network of premises provided and paid for by the OPW and has its headquarters in a Dublin building owned by the Social Insurance Fund. Pension payments to former staff of the Department are paid separately from Vote 12 - Superannuation. Members may wish to note that the Social Insurance Fund comprises both a current account and an investment account. The investment account, which is managed by the Minister for Finance, holds the fund's reserves accumulated from annual surpluses. At the end of 2024, these reserves amounted to €8.8 billion. This was up from reserves of €5.2 billion held at the end of 2023.

As part of my remit, I am required to report to Dáil Éireann any case where my audit has identified public expenditure which is used to a material extent for a purpose other than that for which it is provided. This is generally referred to as irregular expenditure. By that definition, any payments that are in excess of claimants' entitlements under the terms of statutory welfare schemes are considered irregular. Such excess payments can arise due to suspected fraud, a failure on the part of claimants to disclose to the Department relevant facts or evidence, or errors made by the Department staff. I drew attention in my report on both the Vote and fund accounts to the likelihood that there is a material level of irregular payment on welfare schemes. This is a concern which arises each year and the basis of the concern is explained in chapter 16 of my 2024 report.

Because of the scale of the Department's scheme expenditure, even a small level of irregular payment represents a significant loss to taxpayers. For this reason, my office carries out a cyclical programme of examinations of the Department's controls and systems, typically resulting in three to four reports each year for the committee's review. These examinations may focus on the processes and controls associated with individual welfare schemes, or more broadly on the Department's key operational functions such as PRSI income collection, means-testing of scheme applicants, or identification and recovery of welfare overpayment debts. In general, our objective is to gain assurance that schemes are operating as intended, and with minimum achievable losses due to irregular payments.

Where appropriate, we aim in our reports to recommend potential practical ways to minimise the incidence of losses, or to improve the efficiency of the Department's systems, including through effective utilisation of claimant information collected by the Department or taxpayer information collected by the Revenue Commissioners to which the Department has access. I am happy to say that the Department is generally open to considering the recommendations we make and to their prompt implementation.

The committee has received briefing on the six reports listed for today’s meeting. In the interests of economy with the committee's time, I do not propose to itemise the findings of those reports here. I am happy to expand on any points for the committee as required. I might point out that I also published a report last September dealing with the important issue of classification of workers for PRSI payment purposes. I note the committee's intention to examine that report at a future meeting. Finally, the committee may wish to note that I drew attention in my report on the Vote account to the Accounting Officer's disclosure in the statement on internal financial control of a material level of non-compliance with procurement rules.

I thank the committee for inviting us to discuss the matters referred to by the Comptroller and Auditor General. I am joined, as the Cathaoirleach said, by Ms Teresa Leonard, Mr. Niall Egan, Ms Deirdre Shanley and Ms Philomena McShane, the Department's chief accountant. I may, with the Chair's permission, rely on them for assistance in answering some questions that come up. I arranged for an advance copy of this statement together with briefing material on the Department to be circulated and I hope the committee found that useful.

I am aware that for most members of the committee, this is the first occasion on which they will have reviewed the accounts of the Department. If I may, with the permission of the Chair, I would like to start by repeating some remarks made about the Department's work at previous meetings. I spoke at those meetings about the role of social welfare in compensating for and mitigating the impact of failures in the market economy. It is the mechanism through which the gains from economic activity can be shared with people who do not have capital or who cannot, for whatever reason, supply or earn enough from their labour to participate fully in that market economy. It is also the main mechanism through which the value of non-market activity, such as caring and homemaking, can be recognised and remunerated. In doing this, I emphasised that expenditure on social protection should not be seen solely in terms of a cost but rather as an investment and set out our view that social protection has cohesion, investment and expenditure effects that are critical to economic growth and societal well-being. It is important therefore to see social protection not just in terms of its primary purpose of protecting the most vulnerable in society but in terms of its secondary effect of improving outcomes for all of us, including those who see themselves primarily as contributors rather than beneficiaries.

We are all beneficiaries. Unfortunately, this is not an understanding that is evident in some public commentary and analysis, but it is a view that is increasingly being supported by data and research.

I also spoke about how our staff are acutely aware, through their everyday interactions, of the impact of their work on the lives of individual citizens. I emphasised that while some people baulk at the use of the term "customer", we use it because it transfers agency to the people we serve, reminds us that we are a service organisation, and reinforces our commitment to always treat the people we serve with dignity and respect.

We are responsible not only for the provision of policy advice and the delivery of the traditional range of cradle-to-grave welfare services but also for employment services, general registry services, citizens information and advice services, pensions supervision, and, newly, with the launch of MyFutureFund auto-enrolment, for the provision of occupational pensions. We also provide a range of services, on an agency basis, for other Departments, including the operation of the redundancy and insolvency payments scheme, the operation of the accommodation recognition payment scheme, the payment of daily expense allowances, and the operation of the Magdalen laundries scheme. We also provide a range of IT access and services to many other public bodies, most notably through the operation of the MyGovID system. To put all of this in context, during the next three hours or so the staff of the Department will host about 500 employment service meetings, process over 10,500 claims, make over 160,000 payments, answer about 10,000 phone calls, complete just under 2,000 control reviews and spend about €55 million of taxpayers' money.

In monetary terms, the expenditure of the Department equates to about 28% of Government current expenditure in 2025. In staff terms, the Department employs about 15% of all staff in the Civil Service. Most notably, if a single statistic can encapsulate its impact, it is that the schemes and services delivered by the Department reduce the risk of poverty or exclusion by some 51% compared with that which would otherwise pertain. That is an impact that places Ireland among the Benelux and Nordic group of countries.

In delivering on this brief the staff of the Department strive to always deliver an effective, courteous and efficient service. However, we are not perfect. We do make mistakes and it is inevitable, given our breadth and scale, that failures will occur. I am pleased, however, but not complacent, that our efforts are reflected in strong customer feedback with high levels of satisfaction consistently reported in independent tracking research. Our efforts are also reflected in the low level of appeals, in the accreditation for service quality excellence by the International Social Security Association, in the award of Quality and Qualifications Ireland, QQI, certification, and in the recent recognition as the JAM card partner of the year award for neurodiversity-aware service delivery, and in the positive feedback we routinely receive from the Ombudsman's office. This is not to diminish the cases where we have failed or could do better. We have to recognise and learn from these cases. That is why the work of this committee and the Comptroller and Auditor General are so important to us.

I shall now turn to the matters under examination and scrutiny today. On the accounts, as the Comptroller has already said, our payments fall into two categories: those which are based on social insurance contributions and those which are mainly means-assessed welfare payments, which are paid for via the Exchequer. or example, a person who suffers from a long-term illness or disability can. If he or she has enough social insurance contributions avail of an invalidity pension payment from that fund. If he or she does not have enough contributions, he or she can apply for the means-tested disability allowance from the Vote.

The committee will note that the 2024 accounts show total expenditure on Vote services of about €13.35 billion. This represents an increase of 6.9%, or €860 million, compared with 2023. Expenditure on fund services accounted for €13.45 billion, which is an increase of €1.15 billion or 9% compared with 2023. Looking across both, the total increase in gross expenditure was about €2 billion and this, in part, reflects the supplementary provision for one-off and bonus payments of about €1.7 billion during 2024. Leaving aside the impact of these payments, a key driver of the trend of increases is the demographic effect. Pension expenditure increased by just over €1 billion year-on-year, or 10%. Similarly, illness and invalidity payments increased by €508 million, or 9%. By contrast, other payments increased by about 6%.

As previously discussed at this committee, these demographic trends are likely to continue, with significant implications for expenditure and funding of the social welfare system. The most recent actuarial review of the fund, for example, indicates that social insurance contribution rates would need to double, from 2024, in order to maintain the fund in balance over the next 30 to 50 years. Stated another way, pension payments in 2024 were equivalent to about 22% of all tax and PRSI receipts. Over the next 30 years or so this is likely to increase to between 40% and 50%. In response to these trends, the Government has agreed and is implementing a series of PRSI rate increases. Between 2024 and 2028, all PRSI rates will increase by 0.7 percentage points. A new actuarial review is due in 2027 and will inform future policy changes.

Chapter 16 of the Comptroller's report is concerned with control over welfare payments. One of the challenges faced by the Department is to strike a balance between, on the one hand, designing and managing large-scale service processes that are reliable, efficient and effective for the overwhelming majority of customers and, on the other, implementing controls and checks to assure payment integrity. However, we are mindful in doing this that our primary purpose is to support people who need support and we cannot pursue the elimination of error, or fraud, at the cost of unreasonably denying entitlement to service or frustrating access to that entitlement. Looking at the report, I believe the key figure 16.1 summarises the level of excess payments due to error or fraud. Similar figures were included in previous reports. The key takeaway from these data is that although the level of excess payments varies by scheme, the overall level of excess payment across the schemes surveyed in the past ten years is estimated at about 3.25%. The Department's own analysis of a wider range of schemes, which were surveyed in the last 12 years, indicates that the level of overpayment is between 2.5% and 3.1%. While it is material, this level of excess payment is similar to that measured in peer organisations. For example, the Department for Work and Pensions in the UK has an excess payment rate of about 3.3%. When compared with commercial organisations, this level of excess payment is also similar to what is seen in terms of the rates of bad debt and shrinkage in commercial industry. The Comptroller does not make any specific recommendations in his report. However, we do take note of his observations, for example with regard to the use of data analytics. That reflects the fact that overpayment rates are reducing, particularly for jobseeker schemes.

Chapter 18 of the 2024 report sets out the approach to managing the redundancy and insolvency payments scheme. This is a scheme the Department operates on behalf of the Department of Enterprise, Tourism and Employment. In essence, employees of firms that become insolvent and are certified by a registered auditor as being unable to fund redundancy payments are entitled to receive their statutory redundancy and other entitlements from the fund. When this occurs, the Department raises a corresponding debt on the employer concerned and becomes a preferential creditor. In other cases, employers may be able to continue to trade, in which case the practice is to agree and put a repayment plan in place. Where there is no record of a liquidation event, employers not engaged in a repayment plan are targeted. We note and agree with the Comptroller's recommendation that the targeted review process should be placed on a formal footing.

Chapter 14 of the report concerns the winding down of the job initiative scheme. This was a scheme that was closed to new participants in 2004 having been set up by FÁS in 1996. The Department inherited the scheme when it took on responsibility for employment services from FÁS in 2012. In practice, there is a large overlap between the purpose and operation of this scheme with other employment schemes such as community employment or CE, Tús and the rural social scheme, RSS. When the scheme was closed to new participants, the then Government gave a commitment to participants that they could remain on the scheme until reaching State pension age. Since then, the numbers on the scheme have reduced year on year, with just 250 people, plus 20 supervisors, currently remaining on 35 schemes. Recognising that the commitment to allow people remain on the scheme will create a long tail out to 2046, the Comptroller has recommended that we review the scheme on a three-yearly basis. This review is currently under way. It is likely that we may propose that the remaining schemes merge with CE schemes but participants retain their current terms on a personal to holder basis.

Chapter 15 of the report relates to control of the free travel scheme. It includes a number of recommendations, including with regard to the greater use of the integrated ticketing system or tap-on recording of journeys. With respect to the recording of journeys and payments, increased use is being made of the ITS system, starting over the past year with larger operators as suggested by the Comptroller. In addition, an interdepartmental group has completed a review of the funding model and prepared a draft report, including with respect to payments. As some of the recommendations might have significant implications with respect to cost allocations, I have asked for the report to be shared with the Irish Government Economic and Evaluation Service for review. Increased use of spot checks and updated service level agreements have also been progressed, as recommended.

Chapter 16 of the report relates to the use of real-time PAYE data from Revenue. The report notes that the Department utilises a real-time look-up facility across many of its schemes, both in the assessment of claims and in the post-award review and control of claims. The report recommends that the Department should monitor and report on the usage of that facility and consider expanding its use as an automatic part of the claim process on all means-tested schemes in the manner we currently use for the working family payment scheme. The Department has progressed both of these recommendations, with data on the use of RTLU now being recorded and reported. The automatic use of RTLU as part of claims assessment has also been extended to pay-related jobseeker processing. The value of extending its use as an automatic element for other claim processing is not as evident but will be kept under review.

Chapter 24 of the 2024 report relates to the collection and allocation of the PRSI receipts and, in particular, as it affects the allocation of revenues between the fund and the National Training Fund. It includes three inter-related recommendations which are aimed at improving the timeliness and level of detail of data supplied by Revenue to the Department adjusting the approach used to allocate revenue to the National Training Fund, and adjusting the memorandum of understanding between the Department and Revenue. A subgroup of the high-level group that already exists between Revenue and the Department has been established to progress these recommendations.

While I agree with the recommendations and, in fact, would argue that the transfer of National Training Fund receipts should in an ideal world be made directly from the Revenue to the National Training Fund, I understand this would require legislative change and moreover some significant and complex IT system changes within Revenue. The benefit of pursuing these changes, given there will be no net increase in overall revenue for the State, and any adjustment of the allocation between the Social Insurance Fund and National Training Fund is also likely to be relatively small, may have to be carefully examined.

I conclude by acknowledging the staff of the Department and thanking them for their commitment to public service. I see everyday how the managers and staff of the Department work hard to deliver services to the communities from which they come and in which they live, conscious that it is their families, friends and neighbours who not only depend on these services but who, through their social insurance contributions and taxes, pay for them. Having said that, as I said before, we are not perfect and we do not always get things right. This process today plays an important role in reminding us of our purpose, helping us to identify areas for improvement and to learn from our mistakes. It is through such a process that we hope to continue to improve. I and my colleagues are happy to take any questions members may have.

I thank Mr. McKeon. We will suspend the meeting at 12 noon, or shortly thereafter, for ten to 15 minutes. I open the floor to members. The lead speaker is Deputy Bennett who has 15 minutes. All other speakers will have ten minutes. On conclusion of that, if time permits, I will allow members back in for a short supplementary.

I welcome everybody from the Department of Social Protection and I thank the C and AG for all his work and all his office does in relation to the public accounts committee.

The Department has €18.3 billion worth of receipts, is that correct?

The Social Insurance Fund is €18 billion this year. There is €15 billion in the account under review.

That was in 2024. In 2023, it was only €16.8 billion. How did it increase by so much?

It is employment growth. The Social Insurance Fund is outperforming the projections of the last actuarial review. Based on the economic forecast of the Department of Finance, the last actuarial review saw employment growth of about 1.5% to 2% per annum. In fact, in some of the years under review, it has grown by 3% to 6%. We did have 2.4 million people in employment and we now have 2.9 million. It is overwhelmingly due to increased employment.

It is increased employment.

It is. A lot of that, and I say this because I am conscious of a lot of the criticism about migration, would not happen without migration. Nearly of all the growth in employment is through bringing workers in.

Is a portion of that additional money in social protection invested? How much of that is invested on a yearly basis?

The current surplus in the fund is approximately €13 billion. This year, the surplus will be €2.5 billion to €3 billion. The responsibility for investment of the Social Insurance Fund is split in two. The Minister for Social Protection has responsibility for the expenditure side, which is through the annual budget process, and the Minister for Finance controls the surplus of funds through the NTMA, which invests the money. This year the returns from investment by the NTMA come to approximately €171 million extra into the fund.

The increase in receipts is put into an investment fund that the Minister for Finance has control of.

That is right. It is through the NTMA.

What does the Minister for Finance do with that fund? What is it used for?

As I understand it, it is invested predominantly - and it is really a matter for my colleagues in the Department of Finance and NTMA as we do not have any input or control on where it is invested – in Exchequer notes.

It goes into the Exchequer.

It gets a return on it. It part funds the Government's borrowing requirements. It is Exchequer notes.

Mr. McKeon said that in 2027 there will again be an increase in PRSI for people paying their taxes. Are all of these additional taxes people are paying into the Social Insurance Fund going back into the Department of Finance? Is that correct?

That is correct. It is important to understand the fund is ring-fenced. It is not used. The money in the fund is the fund’s money. The reason there is an increase in the rate of 0.7%, as said in the opening statement, is that with the demographic trends, we will not have enough receipts in ten years' time to cover the payments out of the fund, so we need to build a surplus to be able to meet the payments at that time. If we are to have a balanced fund and if we are to be able to afford to pay pensions, in particular, in ten, 20 or 30 years' time, we have to increase revenue now, as it will not be available in 20 or 30 years' time. The fund is ring-fenced. The NTMA invests it and makes the decision as to where it gets the best return. Its judgment, as I understand it, is that it gets the best return in Exchequer notes. It earns interest on that and it comes back to the fund.

What is the return?

The Department of Finance would have the answer to that. As I said, it was about €176 million on the investment in the past year.

Is it correct that there was an increase of €1.3 billion in contributions between 2023 and 2024?

Yes.

Going forward will there be that much of an increase?

This year the surplus is about €2.5 to €3 billion, although closer to €3 billion.

I find it mind-boggling that people are paying all this additional money all the time. People that are working hard every day have to pay this additionality in contributions. Mr. McKeon said that in 2027 there is going to be another increase. How much is that going to be?

That will be 0.15 of a percentage point. Perhaps I am not making myself clear. The fund has always operated on a pay-as-you-go basis. If we think about the contributions people are paying now, it is mainly to pay for their pension when they retire. The amount of money going in is not sufficient to pay for their pensions. The money going in now will help. They will get it back when they retire. It is not lost money. The other thing that is important to realise is that about three quarters of the payments are employer contributions. Of the €18 billion we have collected, some €14 billion is employer contributions and €4 billion is employee contributions.

So people are paying for their pensions and will have a good pension in later years.

That is the intention. To be honest, the payment rates will have to increase quite significantly over the next number of years to make that happen. The actuarial review estimates they will have to double.

PRSI contributions will have to double. Everybody paying taxes will have their PRSI doubled. Does Mr. McKeon not think people are going to go mad about this?

It is a choice. The reality at the moment is that the pensions of the older people of today are being paid for by the workers of today. As the population ages, there will not be enough workers left. It has been well-documented that we are going from four workers per pensioner to two. There will not be enough contributions. To be fair to the workers of today - and I am 63 years of age so it will not bother me - if I am a young person in my 30s or 40s, I am looking at a situation where older people will, in a few years' time, be getting a pension I will be paying for but there will not be enough young people when I am in my 60s and 70s to pay my pension. It is important to put the money in now.

Mr. McKeon is saying we are going to be paying double our contributions. That is very unfair.

On top of that, there is going to be auto-enrolment coming online.

Everybody has to pay for auto-enrolment into a pension as well. How does this add up? People will have to make a double contribution to PRSI and pay into auto-enrolment.

Auto-enrolment is voluntary. People have been opted in but they can opt out. It is not compulsory. The idea of auto-enrolment is that, outside of the public sector, only about one third of workers have occupational pension coverage. There are three elements to the pension system, classically. That has been subject to review. It is called the three-pillar approach. There is the State pension, which is a basic retirement income of about €15,000 per year at the moment. Then there is the occupational pension and private savings. For somebody to have a decent standard of living when they retire, they need at least two of those pillars. They need the State pension plus the occupational pension or savings. When one third of private sector workers do not have occupational pension coverage, notwithstanding the huge financial incentives in the form of tax reliefs, the pension industry has not really been successful in getting people to take up such coverage. The State decided-----

Is it not true that if somebody retires at the age they get the State pension and has paid a pension through their employment, they are taxed on that again?

They are taxed at that point but they get tax relief on the contributions they make.

You get tax relief at the time you pay but it is taken back off you eventually.

Economists will argue differently. You get 42% tax relief on the way in and get tax relief on the investment growth. Most people pay tax at 20% on the way out, so there is a big advantage.

Okay, thanks for the clarity on that. The auto-enrolment scheme is coming in across the board. The likes of childcare providers will be forced to pay into it but the Government does not seem to make any contribution towards that auto-enrolment. It will be a big issue come January and February when the auto-enrolment kicks in. Childcare providers which are semi-funded by the State will have to pay that additionality in the auto-enrolment. Has Mr. McKeon come across that?

From our Department's perspective, the auto-enrolment system is a voluntary opt-in, opt-out system and we have published the impending introduction of it in great detail over two or three years. We have told employers, including in the community and voluntary sector. In the normal course of events, it is up to those employers to prepare their budgets.

Childcare providers get core funding. Are they getting an increase in that funding to help subsidise auto-enrolment?

That is a matter for them and their sponsoring Department. We fund some in the Department, including community employment, Tús and RSS. Our sister Department, the Department of Rural and Community Development, has factored in the increased costs. I cannot speak for every Department. It is similar to the PRSI increase or a taxation increase. These are published things. When firms, including those in the community and voluntary sector, are preparing their budgets, they need to account for the changes and make the case to their sponsoring Department.

How do they account for it in a budget if they do not have it?

They need to make the argument to their sponsoring Department. It is up to the sponsoring Department.

So Mr. McKeon is saying for them to go back to the Departments and ask for that increase for the auto-enrolment.

If they have not already got it, I think they need to consider that. All sponsoring Departments were aware this was coming in. The Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation through its Vote process was aware. I have heard the point raised in general but have not come across a specific issue.

Thanks for the clarity on that. The Christmas bonus payment in 2024 was provided through Supplementary Estimate rather than the standard budgetary process. Why did that happen? Why did it not go through the standard budgetary process?

I came back to the Department in 2010 and for a long time even before I was in the Department that was the process. Normally, budget 2026 would only consider matters for 2026. The exception in social protection is budget 2026 looks at the Christmas bonus for 2025. It is not provided in the Estimate out of budget 2025. It is brought forward in the budget for 2026 and provided by means of a Supplementary Estimate. That has been the practice since God was a boy, to be honest.

Would it not be better to calculate how much you will give out in the following year, instead of having to estimate it?

It is a matter for Government, really. The Government has always since God was a boy taken the view-----

It probably depends on the year. Does it?

The Government likes to see how the Exchequer returns are going during the year to see-----

Or what is coming up that year, maybe an election or something coming up at the end of the year.

I will not comment on political issues.

It might happen like that.

It is €370 million so it is a lot of money. As a civil servant, I would say it is a prudent approach.

It is a good way to buy votes at the end of the year. Coming up to an election, it would be a good stance by a Government party to actually-----

It is paid every year, so it is not just election years. I cannot get involved in political commentary.

No problem at all. I want to ask about paternity leave. The woman is off for maternity leave and then both partners get paternity leave after the woman has had the child. Can that paternity leave be shared between partners?

There are three types of leave. There is maternity leave, which is obviously for the mother; paternity leave, which is obviously for the father; and parent's leave, which is two weeks for each parent. It is common around Europe, not just in Ireland, though in some countries it is different, that it cannot be shared. I remember the debates because I was interested for other reasons. The debates in the Oireachtas at the time were about forcing the father to take some time off. There is a gender equality issue. It is not fair it is always the mother who takes time off. The father should be obliged. He loses the leave if he does not take it. That was the tenor of the debate and the decision taken.

Could you not leave the option for parents to make that decision?

It could be done. It would be a matter for the Oireachtas. It is a legislative requirement. If I recall correctly, all parties agreed with the approach at the time. I had a personal interest in it.

It is just a question I have been asking myself: why can parents not share parent's leave? I thank Mr. McKeon.

I welcome the witnesses and thank all the staff in the Department of Social Protection for everything they do and for liaising with our constituency offices and members of the public. How many social welfare branches does the Department have across the country?

I will ask Ms Leonard for the answer to this but we have about 120, split between our own offices and branch offices.

The Secretary General is correct. We have 60 departmental offices and 60 branch offices. Like the Christmas bonus, they have been there since Adam was a little boy and they are contracted to do a lot of the work the departmental offices do in relation to payments and customer services. There are 120 offices throughout the country.

Very good. In 2024, there were two temporary contracts for branch managers in the Midleton and Roscrea branches totalling €455, 231. The timelines on those temporary contracts are extremely vague. What was the timeline on both of those?

I will come back to the Deputy with the exact timeline. As Ms Leonard said, the branch offices have been there since before the foundation of the State. The way they were set up involves indefinite contracts or lifetime contracts, a bit like sub post offices. They go from family to family. What sometimes happens is a family member ages out and does not want to do it any more.

Did that happen in both of these cases?

I think that was the case in both of them. The family members did not want to take over so we had to publish a notice.

I think we have probably given a short-term contract for approximately three years temporarily. In some actual cases, we would revert and put in the departmental offices. Up in Monaghan, we put in a departmental office.

In Midleton and Roscrea, the Department gave two temporary contacts.

Yes.

For how long?

I honestly would have to come back on that, no more than the Secretary General. I do not have that information off the top of my head.

Has Ms Leonard an estimate in that regard?

I would imagine it is probably for about three years-----

Three years.

-----but I would have to check that. To go back to what the Secretary General said, some people have lifelong contracts but in later years, we have been putting shorter periods on the contracts in relation to renewable contracts. There are some locations where it may be appropriate to put in departmental offices for additional services.

That was not the case in Midleton or Roscrea, was it?

Not at the minute anyway. They are still-----

They are not temporary anymore. We have found somebody to run those offices.

Yes, temporarily.

The longest will be for three years. Generally speaking, we are looking at less than a year because what we need to do is get somebody to take it on pending recruitment.

Generally speaking, a temporary contract would last less than a year. Is it a possibility that contracts in Midleton and Roscrea were for less than a year?

It is. We would need to come back with the data. I will get the data for the Deputy.

Will Mr. McKeon come back to me in writing?

Yes, in writing.

Have the witnesses the information now?

I do not think I have the information now. I will send a note to the committee. It is important to put it in context. Those are important offices for us.

Yes, absolutely.

Quite often, we get very short notice. The person who is running an office might tell us he or she is not opening next week.

I understand how important they are to communities. I have one in my own community in Mallow. I understand how important they are. The significant issue is that the timeline for those temporary contracts is extremely vague and the taxpayer and the Department spent €455,000 on these temporary contracts. It is disappointing that with the expenditure of €455,000 to the taxpayer, the witnesses do not have the timelines for these two branches.

May I give the Deputy a bit of comfort about the spending? The payments are set at standard rates for all branch offices. They are related to the numbers of transactions and the number of clients they serve.

How much would a branch officer earn?

It varies depending on the size of the office. Some would be very small amounts. Maynooth would be our biggest branch office, which would be over 1 million. The branch managers' remuneration in total in 2024, for approximately 60 offices, was €15 million.

That was for 60 offices.

Yes.

That is 60 branch managers.

Yes.

Do they vary or are they specific for each branch manager?

The rates are the same for all of them. There is a payment related to the claim load and transactions. It is a standard rate. Whoever got the temporary contract in Mitchelstown was not getting a special deal or special money in the payment. It is what we would have spent anyway.

The procurement of those temporary contracts are, as Mr. McKeon said, for such a short time. Are the positions advertised?

We advertise them.

Are they advertised as temporary contracts?

We would advertise the permanent one in local media. Where a replacement is sought, it would be advertised locally that we are looking for a new branch manager for Mitchelstown. I cannot comment specifically on Mitchelstown, but there are other branches with which I would be familiar. Sometimes you get very short notice. These contracts go back to before 2022. I am not exaggerating when I say that you might get somebody who has turned 80 and says he or she is not going to open next week.

I understand.

We have to go and find somebody in the community, maybe a shop owner, and ask him or her to run it for a while as we run the-----

I understand.

That is what happens. You cannot close the office.

It is important that Mr. McKeon comes back to us as quickly as possible with that timeline. We need to assess for how long we were paying the €455,000.

Absolutely, Deputy.

As Secretary General of the Department, how confident is Mr. McKeon that we will abolish carer's allowance in this period of Government?

That is a matter for the Minister and the Government to answer.

Does Mr. McKeon believe the Department of Social Protection is able to cover that cost?

It is up to the Government to decide what is available. We cover 28% of expenditure but the Government could raise taxes or cut expenditure elsewhere. Economic growth can fund it. There has been a significant increase in the carer's allowance disregard in recent years. It has more than doubled. That is evident. I do not want to get into politics, but I would say the evidence is that the Government is doing what it said it was going to do, which is to abolish it over the course of this Government. The payment has increased from €200 to over €625. It is now €2,000 for a couple. That is a significant increase.

With my tongue in my cheek, I will say that the amount of money that carers save this country is quite significant. I put that on the record.

I do not cast that in any doubt at all.

I do not expect Mr. McKeon to do so. I put that on the record. For administration and non-scheme expenditure, there is a total of €627 million for 2024, up from €600 million in 2023. Some €107.1 million was spent on digital capital investment and IT. What was that €107 million spent on in one year?

I could get the Deputy a detailed breakdown. We have probably the largest IT organisation of any business or company in the State. We make nearly 100 million payments per year. We process approximately 5 million claims.

Does Mr. McKeon know how much was spent in 2023 and 2024?

We have all that information and can get it to the Deputy. We have invested heavily in our online services. Most of our claims are now received online. That takes investment.

I want to know if there has been a significant increase across 2023 and 2024. The total of €107 million seems excessive. I am not sure if the Comptroller and Auditor General has the detail for the financial accounts of 2023 in front of him. He might not.

The actual figure for the IT spend in 2024 was €73 million. Part of that expenditure-----

It is outlined here under "administration and non-scheme expenditure". Under "digital capital investment and IT" is recorded spending of €107.1 million.

The capital amount is €73 million, to be clear. The balance would be staff costs. We have 250 staff in our IT department.

Is that an increase on 2023?

It would be. Every year we are increasing. That is the nature of IT expenditure.

Did any specific IT projects begin in the Department in 2024?

Yes. For example, the new jobseeker's pay-related benefit system had to be built from scratch.

How much did that cost?

Ms Leonard might have the answer to that question. I will come back to that in a moment. We went from an old IT system, which was developed in the 1990s and called the integrated short-term payments system, ISTS. It was developed in the 1990s and did nearly all our short-term schemes.

I only have one minute left.

The answer to the question on the jobseeker's pay-related benefit system is €2.5 million.

It cost €2.5 million.

It did.

How was that procured? Was there a contract-----

It was an open tender.

It was an open tender.

We manage all our IT projects ourselves so we go to tender. What we go to tender for is we want-----

When did that go to tender?

That would have been 2023.

It was 2022 or 2023.

It was 2023.

When was the successful tender approved?

It would have been in 2022-23. This is a project which took about 18 months.

It began in 2024.

We started the project in 2023.

It started officially in 2024 then.

The payment started. You do not build a jobseeker's pay-related benefit system in three months. It takes a year and a half.

I understand.

On that issue, to do a system such as that for the jobseeker's pay-related benefit, as the Secretary General said, it was a legacy system which looks after 18 schemes of the Department. It supports 18 payment schemes, including jobseeker's benefit and the lone parent and community welfare payments. All of those payments are supported on the system. Quite a lot of time went into assessing how to transfer them from one platform to another before we ever started the build.

How many community welfare officers are there in the country?

I will get the number now.

Has the job specification changed?

It has not changed. There are 532 community welfare staff.

Why are they no longer meeting people?

They are meeting people.

No.

They are.

They are not.

I have to challenge the Deputy on that. We have permanent community welfare officers located in 51 locations.

It was the previous the case in the Mallow branch that a member of the public could enter the branch and meet the community welfare officer. That is no longer the case.

I will explain how it operates now. We have 532 staff in the community welfare service. They are permanently located in 51 locations around the country. There is a walk-in service from 9 a.m. to 5 p.m. We also have 20 satellite offices, so that is 71 locations. In places such as Mallow, for example, you could previously walk in to meet a community welfare officer at certain times of the day and on certain days of the week. They were not there fully permanently. What we have moved to is a model with 51 locations where community welfare officers are permanently available so people know-----

Mallow is obviously not one of those locations.

I cannot say whether Mallow is one or not, off the top of my head. We will tell the Deputy now-----

Will you bring it back?

Thirty percent of our community welfare service claims now come in online, about 30% come in over the phone and about 30% are in person. We make about 30% of our payments on the day in person.

We did make changes in the past. When we took on the community welfare service, to give some idea of the scale, there were about 100,000 people getting rent supplement. The community welfare service was also processing medical card services. Both of those have gone. In terms of the scale of its operations, the community welfare service is now about a third of what it was when we took it over from the HSE because the HSE set up its own medical card processing and rent supplement turned into the housing assistance payment, HAP, which is done by the local authorities. That automatically means you have got a situation where you previously had maybe 100 locations where a CWO was, which creates a difficulty if you have a CWO who is going to be two hours, for example, in Drumlish, an area I know well. In the past, I would be two hours in Drumlish on a Tuesday morning and on a Wednesday afternoon I would be in Ballymahon. People had one day a week to get to that. Now, they can go into Longford town every day of the week. That is a better service.

I wish all the witnesses well. Thank you and a happy Christmas.

As I cannot go to Mallow, I do not know whether I understood those questions. I am only-----

They can go to Mallow. It will be open in Mallow a couple of days a week.

I support the Deputy's Mallow application.

I thank all the witnesses. Will Mr. McKeon tell me the total number of suspected social welfare fraud cases to date for the year 2025?

I would not have the figures here today. What I will say is we do-----

I have them for 2024. There were 6,007 suspected social welfare fraud cases to the value of overpayments of €24 million. How is it trending in this calendar year?

It is pretty much the same. Looking at control, in terms of cases in 2025, we raised 5,200 cases roughly valued at €24.6 million. That is where we have raised an overpayment which we have associated with fraud.

Would Mr. McKeon accept that the control surveys the Department carries out are indicative of a much larger level of undetected social welfare fraud?

No, I would not. If you look at our control surveys, as I said, generally speaking they indicate an overpayment rate of about 3%. Of the 3%, typically about 1% is allocated to fraud. About 1%, and I am summarising at a high level, is Department error and about 1% is customer error, roughly. It would indicate that we are somewhere between 1% and 2% for fraud. It is very difficult. We have had this discussion at previous iterations of this committee. We used to ascribe a higher percentage of fraud and were taken to task at this committee because in order to establish fraud to a level, it has to pass a certain threshold in terms of evidence. In those cases where we are satisfied that we can establish this as a genuine fraud as opposed to customer error, it is about 1%.

A little bit over 3% and roughly 1% are the figures from the control surveys. If you were to extrapolate those figures out, even at the 1% level, you would arrive at a figure that is in excess of €24 million. Does Mr. McKeon accept that?

Yes. We go after fraud as best we can. What we do is raise an overpayment-----

On the central point, in the control surveys, as outlined, if 1% of that excess amount is attributed to social welfare fraud, and that figure is extrapolated out, the figure you will arrive at will be in excess of the amounts the Department has identified as suspected fraud.

Absolutely, yes.

It would be in excess by quite a lot. Does Mr. McKeon accept that?

Yes, I do.

It would be close to €100 million or €200 million.

It would be about €200 million.

It is €200 million. How do we explain that gap between the €24 million the Department has identified and the close to €200 million the control surveys have identified? That is about a €175 million gap in where, potentially, social welfare fraud is taking place.

I will go back to what I said in my opening statement. We have a relatively low level of fraud of between 1% and 2%, and we could certainly detect a lot more and raise a lot more overpayments if we were to introduce an awful lot more controls into our systems, but introducing those controls into our systems would create untold misery for the 99% who are not committing fraud. That is the balance we have to strike. How far do we go in trying to capture that extra €100 million the Deputy talked about and stop it, at the expense of frustrating and denying other people an early payment and their early entitlement? In the grand scheme of things, our actual recovery and fraud control rates compare very well with other countries in this area. I am comfortable that-----

What does that look like? When you say, "compare very well with other countries", what does that look like?

For example, in the UK, and I quoted the example, it is looking at 3.5%, whereas we are looking at 3% in terms of overpayments. If I look at Canada, the last figure I saw was about 5% and in Australia the last figure I saw was about 6%. If I looked at the other figure-----

The comparable figure is to compare the 5% against the amount of suspected fraud that those jurisdictions have identified.

They have roughly the same levels. It is roughly, roughly. I do not have the data in front of me but I can get it for the Deputy. The other thing we do-----

There is roughly the same level of a gap between how much they suspected and what is in the control surveys in all of the other jurisdictions.

There is, roughly. What I would say to the Deputy is that the purpose of doing the surveys to which he refers is to identify the steps we can take to try and reduce the level of fraud - both to measure it and identify the steps we can take. For example, on the jobseeker's scheme a number of years ago, the rate was about 8% overpayments. It is now down to about 5%. That arose because of the survey work that was done. We identified the risks and we now apply a business analytics approach to try to reduce fraud getting into the system.

For example, the big issue was part-time and casual workers. The issue that arises there is part-time and casual workers' pay and hours of work change from week to week and they do not always tell us when that happens. That creates a risk. We have more controls in place now. We identify those cases where we think payments are going out from the Revenue lookup system that we are not being told about and we go after those. We identified that people who were collecting their payments in post offices had a much lower risk of fraud than people who were getting it through their bank account, so we moved all our jobseekers and the payments to the post office. That does create a problem because now most people who are trustworthy are being forced to go to the post office to collect the payment as opposed to getting it in their bank account, but we took that in order to reduce the level of fraud from 8% to 5%. That is the purpose of the control surveys and those are the measures we take.

I will move to another area, which is the domiciliary care allowance. It seems there is a high level of success rate on appeal in this allowance than would be typical in other areas. What can Mr. McKeon attribute that to?

I will speak about appeals in general first. Generally speaking, about 25% of claims are not granted at the time of application. The figure for domiciliary care allowance is much higher; about 40% are not granted at time of application.

Not granted.

Not granted. People then appeal. When they appeal, they tend to include much more information in their appeal documents than they had in their claim documents. Most of those appeals are not actually granted by the appeals officer. They are granted by the Department member of staff who originally rejected it. That is because what the appeals office does is send the file back to the deciding officer and says it has now got this extra information. At that point, the deciding officer says they have got a lot more information and they will grant it. We have been trying to make the point to domiciliary care allowance advocates and others that people should submit a full application. We tried to make the form, and we worked with advocates, and we decided-----

Like all these things, and it is the same with sports grant applications, there will be varying degrees of people who will be very good at filling out complex forms to demonstrate their need. Other people will have different challenges in fulfilling those criteria. There may be an inbuilt discriminatory effect of people who are better at addressing very significant amounts of bureaucracy versus those who are not, who could go missing in this process.

We have done a new form. We have worked with customers and put a lot of work into designing it.

We have moved it online. The online form is much easier because it takes you through the process step by step and it skips questions which are not relevant. A form might be six pages long, but because you answered question 3 one way then go to question 4 and question 5. You do not face that difficulty online. The main issue with domiciliary care allowance and the sustained-----

What is the appeal success rate presently? I asked about figures on this from the last five years. It seemed to me that there was a 60% success rate on appeals in the domiciliary care allowance, which seems like an enormous number versus people who originally apply.

The situation in January to October 2025 were 3,000 appeals on domiciliary care allowance registered. A total of 1,400 were allowed. Of that 1,400, a total of 1,200 were allowed by the original deciding officer-----

Almost 50% of the appeals there were-----

Of that 1,400, which is about 50%, 1,200 were not-----

The parent of that child might have waited 12 to 14 months or thereabouts. Some of them have to go to solicitor firms and get letters written by solicitors who then go in. How many solicitor letters would the Department receive for domiciliary care allowance applications?

I do not have that information with me. On appeals, this is an important point to try to get out. People think that they need to put in the application immediately in order that they can get my claim-----

You can get it retrospectively, but there are ongoing current needs that parents of children who are disabled are paying for, including therapies. A lot of them are at the thin end of the edge and they are waiting for the decision that they are entitled to.

What I would encourage people to do is to wait until they have all their consultants' reports, GP reports and occupational therapist reports-----

That is very easy to say when there are these big payments that are coming through for every family who is trying to meet the need of their child.

If you take the deciding officer, deciding officers in the Department operate independently in their functions, but the legislation states that people must-----

I accept that, but-----

If they are not given the documentation that enables them to make the award, they cannot make the award in the first instance. Unless the Oireachtas wants to change things so that people do not have to present any-----

I accept that. The Department has to implement the policy, but I want to highlight - I am over time - the figures in and of themselves are indicative of there being a challenge in terms of what the Oireachtas intended to do, which was to provide money for families with needs versus the reality of what a lot of parents are facing when they are submitting these applications.

What we are proposing to do, and we hope to bring it forward if we can in a Bill next year, is to make it absolutely clear through the law that a person can get their payment backdated so we can say to people if they get a diagnosis on 1 January but it will take three months to get their occupational therapist report, they do not have to apply now and the payment will be backdated. We hope that this will prevent, as 1,200-----

It is important to say that you do not necessarily need diagnoses in order to obtain the domiciliary care allowance. Just to clarify that and not to confuse things.

No, you still need the evidence from a medical practitioner that the child-----

You need evidence that there is a need. That could be very different to a diagnosis. A lot of people are waiting for an assessment of need that may in fact be entitled to a domiciliary care allowance but they have not received the completion of the assessment of need.

That would be a matter for the Oireachtas to decide. At the moment, the qualification criteria for domiciliary care allowance is that there has to be medical evidence that the child requires a level of care and attention substantially greater than that of another child their age.

I accept that, but just to be clear, that could be different to a diagnosis.

It varies by diagnosis, absolutely. It goes back to the Deputy's point about control and the point I was making. We can have a very tight control around these payments, or we can grant payments. We take a view within the Department that our job is to look after the 99% of people who are honest-----

I do not think the domiciliary care allowance, to be fair, is an area where a lot of fraud is being perpetrated.

It is a very expensive scheme. The numbers on the scheme have increased very dramatically in recent years. It is a huge cost at the moment. It is a matter of concern for the Exchequer that the amount of money that has been spent on domiciliary care allowance and the growth does need to be something that we need to pay attention to.

It is growing to meet the needs that exist.

I thank Deputy Geoghegan. Before we conclude, was Ms Leonard looking to try to get in there briefly?

The only thing I was going to say but the Secretary General said it. It is about the level of difference in care. It is also back to the fact that people do not need the assessment of need. There is kind of a misunderstanding that you need this heavy document of an assessment of need. You do not. The GP can complete the application form as long as they complete it thoroughly. We have changed the questions on the application form. We, in conjunction with domiciliary care parents and organisations representing people with disabilities, made sure that it is actually easy for them to use. We have changed the format. It is much easier, both for them and the GP. If the GP provides a full and thorough report on whoever they are attending, because a lot of these children are actually attending somebody else rather than a GP, if they provide a proper report, a lot of cases get through on the first round. It is possible. You do not have to wait for the assessment of need and we never recommend that they have to.

Mr. McKeon may come in briefly because we are over time.

The key number on this is that out of the 1,400 appeals that were awarded, 1,200 were awarded by the original deciding officer, not by the appeals officer. It was not that the appeal granted the award, it was that had the information been in front of the deciding officer to begin with, the customer would have got the payment.

I have one more thing to say on that as well-----

We are way over time. I call Deputy Farrelly.

I thank Mr. McKeon and his colleagues for being here. We appreciate the opportunity. Most of my contribution will continue along the line of overpayments. We have seen such a significant increase in overpayments, from 87,000 in 2023 to 115,000 in 2024. Is this an increase year on year? How is that analysed? Is it something of a change in the prevalence based on an issue outside of the Department's control? Is it a weakness within the Department's control?

What we have done is we have increased our control surveys. There is a couple of things. Arising from previous reports of the Comptroller and Auditor General and our own surveys, we have increased the number of control reviews we are doing year on year. I will get the Deputy the figures on that now. For example, in terms of reviews, this year we are going to do 775,000 reviews. In 2023, we did 630,000. We have increased the number of reviews, going back to Deputy Geoghegan's point. The other reason why there is a large increase in the overpayments is the pandemic unemployment payment, PUP. We made pandemic unemployment payments of just under €10 billion to over 800,000 people. By definition, and we brought this to the attention of the committee at the time, we had to relax some controls and take-on those claims given the situation that persisted. About 70,000 people were overpaid that we know because we did the data matching with Revenue. We have been raising those overpayments. The bulk of the increase is due to that PUP control project.

The surveys are one line of that. I received a response to a parliamentary question where there are asset profilers in the Department as well, people who are actively trying to engage. I believe there are secondments from An Garda Síochána. Could Mr. McKeon tell me a little bit about their role and what they do in the Department?

The Criminal Assets Bureau has had four organisations involved in it since its establishment, namely the Department of justice, An Garda, Revenue and ourselves. We allocate a number of our special investigators to work with the Criminal Assets Bureau. There have been some cases that were well covered in the newspapers. I cannot name individuals but they relate to well-known crime gangs. Our social welfare inspectors would be involved in the recovery of those payments that may have been made to those involved.

An Garda's role in secondment is to work in partnership. Have they taken leadership roles?

Within the Department we have about 22 gardaí who work as part of our special investigations unit. They are separate to the Criminal Assets Bureau. They were brought into the Department in 2014 or thereabouts. They deal with prosecutions. The garda can bring the prosecution in the District Court or Circuit Court. That is mainly what they do. They assist our inspectors. There are some cases that our inspectors have to deal with where the person might be of interest to the Criminal Assets Bureau but they are still a dangerous person. An Garda Síochána would be involved in those kinds of cases.

They would be seconded from their normal work into the Department.

They are full time in the Department.

Can I query the totals I got in answers to parliamentary questions in terms of the overpayments? There is a figure there that states the value of the overpayments was €115 million, yet the total recoveries were €87 million.

That was 2023. In 2024, we are looking at a value of overpayments to €157 million, yet the recovery is only €101 million. Can we hear about the status of the unrecouped overpayments piece there and where we are at in terms of percentage of total?

I am looking for the data. At the moment, when I look at 2025 and I look at cases, we have raised about €143 million in overpayments and we have recovered about €100 million. That is up to end of October. Of those, a good proportion are paying. I will just get the information out for the Deputy. About 50% of those are paying in their new repayment plan. About 46% are not repaying. Most of those people who are not repaying are what we call off book. They are no longer in receipt of a social welfare payment. To an extent, we cannot get our hooks into them to recover the money. Legislation was introduced a number of years ago that gives us attachment order powers. We have increased the number of attachment orders we are making use of. There are 4,300 attachment orders in place where we are recovering money from people's salaries or from their bank accounts. Another 10,500 were threatened and the people paid immediately when we threatened them with the attachment order. We need to get that 47% or 48% who are not paying into a payment plan. We have allocated extra staff to our debt recovery unit specifically focused on issuing attachment orders. With most of the overpayments we are looking at an average of about €1,000 or so. A lot of people could probably pay straight off, if they are in employment. We do agree payments terms of about €50 a week for people who cannot afford to pay. We will do that over a period of time.

According to the 2023 figures, about €28 million that was not recovered. Does that roll over into the figures for 2024?

Yes. It rolls over. Every year we write some off, mainly in the case of people who have died or left the State and there is no hope of recovery.

How does the Department determine if they have left the State?

We have information from Revenue and our own information. We have information from the property registration authority. We know whether people are active in the economy. If they are not active and we cannot find them, and there is no record of them dying, we have a pretty good idea they have left the State.

I just want to add, about 60,000 people who owe the Department money are actually on a social welfare payment. The amount they can repay at any time is limited. We obviously cannot take them below a certain level of income, so it does take a protracted period for someone on a social welfare payment to pay even a low level debt such as €1,000. Once a person agrees to a repayment plan, the Department works with them to ensure that they adhere to the plan but also, if they are dependent on welfare, that they continue to receive an adequate level of income. That is why in any one year the debt recovery is never going to be equal to the debt raised. It is not like the Revenue Commissioners who can take it all back off someone's tax in a lump sum if the person is earning. It is very much dependent because a lot of our customers are still dependent on welfare, even though they may have a welfare debt.

A former colleague who used to do Ms Shanley's job described it well as being a bit like the Mounties. Eventually we will get most people because when they retire, they will be on a pension, so it will come back to us. A large part of our recovery is estate cases. When people die, we are notified of their death and of their assets. If there is an overpayment, we will look for it then. While we might not recover it in-year, we will eventually get it.

Over the past five years, how much has been written off in those cases where the officials believe they might have passed away or are not active in the State? What would be the total figure there?

There is about €7 million of debt written off in any one year. We only write off debts of very small amounts that are deemed irrecoverable, like less than €100, and it is not economical to recover it. The person may no longer be in the country or something like that. In the case of somebody who has died, the recovery may not be possible from their estate and they may be dead more than five years. There is a very low level of debt write-off and we do in accordance with our sanction from the Department of public expenditure and reform.

Averaging €7 million over the five years is €35 million or €40 million. It is a big figure when we put it as a total. I completely accept the point Ms Shanley is making but in total it is a significant cost to the Exchequer.

It is about €7 million a year but in terms of the actual individual amounts that are written off, they are very low levels of overpayments, maybe about €100 or less. Some of the debt might be just an outstanding balance where somebody has paid the majority of their debt but there might be €5 left on it. If the person is no longer dependent on welfare, it is impossible to pursue somebody for a debt of €5. The postage stamps would be more expensive.

I understand.

It is about 1% of the debt every year. As Ms Shanley said, it is only in small amounts.

That is the circle I am trying to square in my head. Mr. McKeon is saying 1% and that is fine, but the value of overpayments in 2024 is €157 million while €100 million has been recovered.

We have a stock of debt as well that we carry forward. That is why I used the analogy of the Mountie. We will get most of the debt back over time.

The breakdown of overpayments suggests 15% are fraud, which is consistent in 2023 and 2024; customer error is 61% in 2023 and 68% in 2024. There are estate cases as Mr. McKeon said. Official error is down as 1%. There is something wrong with the system if the level of customer error is that high. What is the difference between customer error and fraud?

There are very clear definitions in the legislation and the deciding officers have to adhere to those. Customer error is where new facts or evidence come to light, but there is no evidence the customer deliberately attempted to conceal those facts or information from the Department. It is usually the case that the customer was late notifying us of a change in their circumstances but there is no evidence that they deliberately concealed information. The evidence required in the context of defining an overpayment as fraud or suspected fraud is that the customer deliberately or wilfully concealed or provided the Department with false or misleading information. There is quite a high bar to classify a case as suspected fraud. Just for interest, in respect of the 116,000 overpayments with the value of €157 million, the average overpayment was €1,350. However, 72% of them were actually less than €1,000. The actual overpayments that are incurred are not fraudulent. The customer may have returned to work, or may have been working casually and got an increase in the number of days, and just failed to notify the Department that they were working three days instead of two. Sometimes it might be an elderly person who does not realise that an increase in a private pension is going to impact their pension.

I wonder if there is a more efficient way for that to be done. I am not saying it is Ms Shanley's responsibility. When it is an information gap as opposed to an intent, is there something wrong within the system that people are not provided with adequate information? What comes from that is all the letters of warning and the myriad issues that come from an unintentional act which really does cost the taxpayer when viewed collectively.

When we award a claim and give out the decision, sometimes we get given out to because we put it in bold and in red that if there is a change in the person's circumstances, they must tell the Department. From time to time we run information campaigns online saying if there is a change in your circumstances, you must tell the Department. This year we will do 775,000 control reviews, and write to people at random asking them to tell us if there is a change in their circumstances. One of the reason we do so many is we do not want the situation to arise where somebody innocently has accrued an overpayment. Again it comes back to the balance. If we write out to everybody every year, we will end up with people saying we are bothering them and do we not trust them. We are often told: "I was sick last year and I am still sick this year." We have to have a balance. Our surveys show an overall level of overpayment of about 3%, with 1% fraud. A commercial organisation that had 3% of bad debt would be thrilled. A typical level of bad debt is 5%. A retail organisation with 3% shrinkage would be thrilled because it is typically around 5%. If I was the Secretary General in the Department of work and pensions, and I am getting that down from 3.5% to 3%, I would be thrilled.

By any international comparison, we are operating at a good level in managing overpayments. I understand that because we spend €27 billion or €28 billion, every percentage point is a huge amount of money, but to go after that percentage point would inflict huge misery on the 99% of honest people. Part of the cost of running a social welfare system is that there has to be some tolerance, not a high tolerance, but I think a tolerance of 3% overall and 1% of fraud. If the Oireachtas wants to change our views, that is perfectly open to the Oireachtas, but that is where we are at the moment.

We will take a short break.

I welcome the witnesses. I am going to start with a compliment. Any time my office contacts the Department of Social Protection, we get a very swift response. I think it is important to call out when things work well, so I appreciate the attention given to our queries. Reference was made earlier to maternity leave, paternity leave and parent's leave. Does the Department collate data on the number of payments of these types of leave? If that is the case, does the Department share the data with the forward-planning unit in the Department of children?

We collate information and we publish it in terms of the number of applicants for maternity leave, paternity leave and parental leave. We break it down by gender and by month. We publish this data and make it available to anyone who looks for it. I am not conscious that we have specifically made it available to the Department of children but it is publicly available. We can certainly make it available to this committee. We do the same for child benefit, for example, so yes, we do it and it is all available.

Is it available online?

Yes, we publish our statistics quarterly and annually and they are available online. If the precise detail someone is looking for is not online, we can provide it in answers to parliamentary questions, freedom of information requests or people can just call the office.

From what section of the Department's receipts are those benefits paid?

The benefits are paid from the Social Insurance Fund. They are related. The policy responsibility for paternity leave, maternity leave and parental leave is with the Department of children, I gather, now. Sometimes I get lost with the movements between Departments.

It moves.

We then provide the State benefit which matches it. We do not say whether maternity leave should be 26 weeks or 28 weeks or parent's leave should be ten weeks or five weeks. We pay the benefit for the duration of time that the Minister for children specifies it should be paid for.