Dáil Éireann - Volume 434 - 13 October, 1993

Ceisteanna—Questions. Oral Answers. - Social Welfare Amnesty.

8. Mr. Rabbitte asked the Minister for Social Welfare the total number of queries received by him on the social welfare amnesty in respect of employers or self employed, PRSI and other social welfare categories; the total amount remitted to his Department under the amnesty in respect of each category; and if he will make a statement on the matter.

Dr. Woods: The social welfare amnesty which I announced in June was designed to add impetus to the ongoing successful drive by my Department against fraud and abuse of the system. It offered people who were defrauding the social welfare system a final opportunity to come clean and pay up what is due to the taxpaying public.

The amnesty against prosecution applied to employers, the self-employed and social welfare recipients who co-operated with my Department and put their affairs in order.

It is not possible at this stage to supply final figures in respect of social welfare recipients who applied for the amnesty. However, up to mid-September some 475 [954] people had made inquiries to my Department about the amnesty. A further 174 people under investigation by my Department when the amnesty was announced were given the opportunity of availing of it.

In excess of 200 people claiming social welfare payments have applied for the benefits of the amnesty and these cases are now being processed. Exact savings figures are not available in respect of these cases.

The collection of PRSI arrears and the imposition of penalties in respect of those arrears is primarily a matter for the office of the Revenue Commissioners. The tax amnesty which includes an amnesty from penalties on arrears of PRSI for employers and the self-employed, provides for the payment of all arrears of tax and PRSI due by 14 January 1994.

The majority of employers and self-employed wishing to avail of the amnesty in respect of their outstanding PRSI liability have to contact their local tax office to have their applications considered. My Department does not have statistics on people claiming the tax amnesty in respect of outstanding PRSI liabilities.

The social welfare amnesty is part of a package of control measures introduced by me over the last few years. I am satisfied that the amnesty has contributed to the on-going efforts by my Department to stamp out social welfare fraud.

Proinsias De Rossa: In the light of his reply can the Minister tell us why in The Sunday Business Post of 5 September it was claimed by his Department that the PRSI amnesty had passed the £200 million target? It is clear from what the Minister said that if one considers the returns from the 1991 amnesty, he will be doing well if he manages to pull in £1 million. Of the 475 recipients who have made inquiries, what level of arrears or overpayment is involved in those cases?

Dr. Woods: I could not give the breakdown of the cases. I will have that at the end of the time.

[955] Proinsias De Rossa: The time ended in August surely?

Dr. Woods: It is ongoing.

Proinsias De Rossa: The announcement was for an amnesty for June, July and August.

An Ceann Comhairle: The Minister is replying to your question.

Dr. Woods: The tax amnesty includes an amnesty from penalties on arrears etc, for employers and that is going on until 14 January. The £200 million target will be exceeded. One of the difficulties is that this is part of a management approach. We are aiming for increased compliance from employers and to that end we have increased investigations of employers. That programme began in the latter part of 1991. The £200 million relates to that period. Compliance has improved beyond our anticipation and returns are higher than expected. That is the management position and I am concerned with managing a system which delivers the goods. We deliver the service and manage it effectively to keep taxpayers' costs down and to ensure that those who should contribute are contributing. We are doing very effective work on compliance. There were a large number of cases which would have come before the courts and now many of my officers who have been involved in court cases have been freed to increase compliance levels.

Proinsias De Rossa: The Minister is attempting to pull the wool over our eyes. I draw the Minister's attention again to his statement in The Sunday Business Post where he claims a huge success for this amnesty and that the target level of £200 million in unpaid PRSI payments will be reached. The Minister said in the House that he is not in a position to tell us how much in PRSI payments will be brought in as a result of the amnesty. In the 1991 amnesty 464 employers sought information on the scheme but only 17 subsequently paid, according to the report [956] of the Comptroller and Auditor General for that year. Is the Minister now claiming the payments made under the 1991 amnesty for PRSI under this current amnesty? It appears from his reply and from the press reports that he is claiming that the £200 million will actually be for the last three years up to the end of 1993. In June the Minister claimed £200 million as a result of the current amnesty, not as a result of the last one.

Dr. Woods: The programme I set up has run through from that time. The difficulty is that the income on PRSI comes into the Revenue Commissioners who allocate on a percentage basis an amount of money to us. The percentage figure is worked out by the Revenue Commissioners, so it is not that simple.

Proinsias De Rossa: How can the Minister then claim success?

Dr. Woods: Because we get the money. I only want the money and the compliance. The Deputy is looking for something else. I want to ease the burden on the PRSI payer and the taxpayer and I have been doing that. When the Deputy sees the outturn at the end of this year he will see what I am talking about. We will have achieved not only the targets about which we spoke but we will have exceeded them and that is what matters at the end of the day.

We are back again into the old problem of fraud, abuse, unwarranted claiming and compliance. We may have cases of fraud and abuse and the Auditor General may accept that there are 200 cases in court and point to that as being the fraud statistic. Of course it is, but we would be wasting our time if that was all we dealt with. This work relates to all the people who come in who would never get to court, so that we increase compliance resulting in a better income, a smaller burden for workers and a fairer system as a whole. One aspect of this is that PRSI comes into the Revenue Commissioners and they allocate a proportion of it to us afterwards.

[957] Proinsias De Rossa: I still fail to understand how the Minister can claim that the June, July and August amnesty has been a success when he cannot give us the figures in this House. When will he be in a position to give a detailed report to this House on the outcome of the amnesty for 1993, not for 1991, with the facts and figures for the number of inquiries received, the number of self-employed and employers who have made inquiries and paid their PRSI and the number of recipients who have offered to pay back overpayments they have received?

Dr. Woods: I have always made it clear that the amnesty only forms part of the overall package. If the Deputy accepts this he will recognise that we are looking at the overall figures. At the end of the year we will have the returns for the year. We can discuss the matter at that stage.

Ms Keogh: We should pursue the Minister a little further on this matter. The system that has been put in place is nebulous. The point has been made that the Minister has claimed that the scheme has been a success. If that is the position he should be able to back up this statement with facts and figures. It is grossly unfair——

An Leas-Cheann Comhairle: A supplementary question, please; this is Question Time.

Ms Keogh: I press the Minister to give us the facts and figures.

Dr. Woods: We will have the figures at the end of the year but I can tell the Deputy now that they are running ahead of target, which is my main interest. We will also be in a position to provide certain information on certain categories but the bulk of the savings is not readily identifiable in terms of individual categories.

However, there has been an increased level of compliance across the population. The point I am trying to make is that there will be no detailed information but we will have the money. The object [958] of the exercise was to ensure an increased level of compliance and in turn that the income to the Social Insurance Fund and the Exchequer would be increased. This is made up of a number of elements of which the amnesty is one. For instance, if an amnesty is announced, people may decide to put their affairs in order — we may not have them listed — or to put their affairs in regard to PRSI in order with the Revenue Commissioners. This is a complex matter but the Revenue Commissioners calculate the amount that should be paid to us. At that stage they would be included in the system and would make payments to us from then on. That is of importance to the worker who pays PRSI given that others would be carrying their fair share of the burden. I can assure the Deputy that the amnesty has been of help in improving the position this year. In addition, some of my staff who were becoming totally embroiled in the courts have been released to carry out other tasks to ensure an increased level of compliance. Consequently, we will see improvements in the delivery of funds and the removal of unwarranted claims by the end of the year.

Mr. Finucane: On the question of funding, I have no doubt that the Minister will achieve what he says he will achieve. In regard to the amnesty when the Minister was speaking about the figures I was reminded of the advertisement for crunchy nut cornflakes in which one of the characters says “I am coming out with my hands up”. When the Minister mentions that there has been an increased level of compliance he is surely referring to the blitzes that are being carried out. One such blitz was carried out in Newcastle West last week when approximately 12 social welfare inspectors moved into this small town——

An Leas-Cheann Comhairle: This is Question Time, Deputy; we should not have speeches at this time.

Mr. Finucane: I am coming to my question; I am giving an example.

[959] An Leas-Cheann Comhairle: Please ask a supplementary question.

Mr. Finucane: Would the Minister agree that the reason there has been an increased level of compliance is that blitzes are being carried out all over the country? As a consequence, the Minister will raise £200 million. If a person, for example, a small farmer, decides to put his affairs in order and enter the tax net usually the Revenue Commissioners do not go back over the figures for a number of years. In this case, on the question of PRSI, will the Minister go back over the figures for a number of years in an effort to include people in the system?

Dr. Woods: Naturally, when they call inspectors and officers will be looking for moneys that are due. As I said in reply to Deputy Keogh, one of the most important points is that when people are included in the system and begin to pay PRSI the burden on the taxpayers will be eased. The more people who pay on a regular basis the better, given that there will be fewer demands made on everyone else. I would prefer if people kept their affairs up-to-date and operated in the white economy rather than the black economy. The matter can be reassessed at the end of the year to see how the position can be maintained from then on. I do not think it will be as difficult to do this as it has been during the past two and a half years.

Mr. Allen: Would the Minister agree that there is a fine line between ensuring that companies and individuals comply with the regulations and harassing, almost out of existence, legitimate companies which are floundering in the recession? Would the Minister ensure that a reasonable approach is adopted because in many cases the approach is extremely unreasonable? Finally, since the amnesty has been such a success does the Minister intend to remove the 1 per cent levy?

An Leas-Cheann Comhairle: I do not think that is pertinent.

[960] Dr. Woods: That question should be directed to another Minister. While people may have to be firm and watchful they should be reasonable and courteous.

Ms Keogh: I am reminded of my school teaching days prior to my business days when I used to say “Would you mind answering the question you were asked?” which is what the Minister has failed to do. While we would all agree that it is wonderful that officials in the Department of Social Welfare do not have to waste time by going to court because of the increased level of compliance, is it not true that the Minister cannot answer the question which he has been asked and that so far as he is concerned the amnesty is a bit of a joke in that all he can say is that there has been an increased level of compliance?

Dr. Woods: I suggest the Deputy should read my initial reply—

Ms Keogh: I was listening.

Dr. Woods: —because I answered the question that was asked. I say again that in managing the social welfare budget for this year I am in a happy position in that I will be on the right side rather than on the wrong side.

Mr. Allen: That is because a nasty line has been drawn; it has to do with the dirty dozen.

Dr. Woods: That is not the case, Deputy; the position has been improved this year.

An Leas-Cheann Comhairle: The Minister should be allowed to continue without interruption, please.

Dr. Woods: The Deputy should at least join us in 1993. As I said, the position has been improved. Things will be better than was anticipated during the year.

Proinsias De Rossa: Questioning the [961] Minister on this issue is like trying to eat soup with a fork. The Minister has not told us the amount of money remitted to his Department under each of the categories referred to in the question. Let me ask him some specific questions. Bearing in mind that this amnesty was introduced as a sop to the Labour Party because of the row over the tax amnesty for tax cheats, is the Minister telling us that the social welfare amnesty has now been extended beyond the end of August and, if so, to what date? In regard to one of the categories the Minister identified when he announced the amnesty, namely, those self-employed who did not register in 1988 when they became liable for PRSI, how many have applied under the tax amnesty to be registered? I regret the long questions, but we do tend to get long, uninformative answers.

Ms Keogh: They are not really answers.

Proinsias De Rossa: How many recipients of social welfare have actually paid money and how much money has been paid under the amnesty for June, July and August of this year?

Dr. Woods: It is too early yet to get figures, but those figures will be available.

Proinsias De Rossa: If the Minister is not prepared to talk about it, the figures must be very small.

Dr. Woods: We also get money in the context of the amnesty, because PRSI is involved and we estimate the amount of that in conjunction with the Revenue Commissioners. We do not yet know the figures relating to the self-employed. We need to know which year payments relate to in order to give credits for that particular year, but it is not always possible to get the necessary details. The person who loses out in that case is the self-employed person who does not provide [962] the details. That is a fact we try to advertise in the interests of the self-employed person.

Proinsias De Rossa: Is it therefore true that the Minister cannot tell us whether it is a success or a failure?