More than 9% of PUP payments were not eligible, auditor finds

An examination of the €9 billion pandemic support claims made by the Department of Social Protection has found more than 9 per cent of reviewed claims “were not eligible for the payments received on the dates tested”.

The report from the State’s Comptroller and Auditor General Seamus McCarthy found “more extensive testing would be required to reach a precise estimate of the level of excess payment for the scheme”.

Presenting his report to the Oireachtas Public Accounts Committee on Thursday, Mr McCarthy said the bill for social protection payments rose 48 per cent in 2020 to almost €30 billion.

This included just more than €9 billion incurred in 2020 across three new Covid-19 related schemes – the pandemic unemployment payment, the temporary wage subsidy and the employment wage subsidy – he said.

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The Department’s expenditure on administration of the schemes amounted to a further €635 million.

Mr McCarthy told the committee he appreciated the pandemic supports were “devised and implemented in a very short period, at the same time as the Department had to adopt significantly restricted work practices”.

He said he was “happy to acknowledge that delivery of the scheme on such a scale and in such a short time represented a major achievement”.

However, he said the Department implemented reduced controls over pandemic unemployment scheme claims, when compared with other income support schemes.

He said it was “recognised at the outset that the risk of overpayments would be higher than normal”.

Review

Mr McCarthy said his examination reviewed a random sample of claims from employees on the basis they were out of work due to Covid restrictions and “found evidence in records available to the Department that over 9 per cent of the claims reviewed were not eligible for the payments received on the dates tested”.

“This suggests there may have been a material level of irregular payments of employee claimants under the PUP scheme,” he said.

Mr McCarthy noted the examination also reviewed a random sample of self-employed PUP claims, but it was found “it was not possible to conclude on the eligibility of these claimants, due to the absence of evidence about the level of loss of business turnover due to Covid-19”.

Responding to questions from committee members, secretary general of the Department of Social Protection John McKeon said checks carried out by the Department had uncovered 9,000 claims made by claimants who had left the country and were ineligible for payments.

Mr McKeon said the Department’s own investigators had ways of confirming that those receiving money were no longer based in the country. He told James O’Connell TD that it was estimated the value of fraudulent payments may be €20 million, out of a total budget of €30 billion.

He said some overpayments related to the fact that as claimants returned to work they were required to sign off on day one, but might not get a pay cheque until after four weeks. In normal circumstances they would qualify for a supplementary allowance and the value of that would have to be taken into account in assessing the overpayment.

Mr McKeon said he was “ hugely proud” to be associated with the work of the Department’s staff and other public servants who not just kept up with demand but expanded the system and installed two new IT systems to process about 1.8 million claims for the PUP – equivalent to about nine year’s worth of jobseeker claims.