Mortgage relief records will be used to catch welfare frauds
Published 06/12/2011 | 05:00
A NEW joint investigation has been set up to detect fraudulent lone parent claims by checking mortgage records.
The Revenue and the Department of Social Protection are checking the names and addresses of those people who are claiming tax relief at source on joint mortgages.
They are cross-checking names against those who are claiming lone parent allowance to see if any of them are actually living together.
The State is spending €400m on mortgage interest relief this year -- as well as a further €1.1bn on lone parent allowance.
Those who apply for both payments have to supply their name and address -- making it relatively easy to cross check the records. The lone parent allowance amounts to €188 a week, plus €29.80 for each additional child, and is paid until a child reaches the age of 14.
Mortgage interest relief is a tax credit that can be worth up to €5,000 a year to a married couple -- and is applied directly to the mortgage repayments a person makes from their bank account.
This is going to be abolished for new entrants at the end of next year.
The Revenue said results from the investigation into joint mortgages were not yet available but said that "appropriate action" would be taken where required.
It is the latest indication that the State is making more use of the benefits of "data matching" to root out social welfare fraud.
Fine Gael Limerick county TD Patrick O'Donovan obtained details last week from the department about its use of Revenue records to examine almost one million property sales, purchases, and transfers over the past three years.
By cross-checking the records against its own computer databases, it found that more than 40,000 records related to social welfare recipients.
In an initial sample, it found that customers had transferred properties -- most likely their homes or farm -- to a family member. And they had also sent on a deed of transfer to the department.
But the department said it also found a "small number" of cases where it had not been notified of property transfers which would have affected people's social welfare payments.
It reviewed 107 of these types of cases and made savings worth €390,000 in seven of these by reducing or cutting off social welfare payments. The project is ongoing.
Mr O'Donovan said he wanted the department to carry out more work like this -- saying it should be using PPS numbers against the records of the motor taxation office (to check car sales) and airlines (to check who was going on flights).
He said some people on social welfare were "living the life of Reilly" at the State's expense.
"If they are as dependent on social welfare as they say they are, they wouldn't have the quality of life that they have," he said. "They change the car every year, they can buy land and they can have a huge splash when it comes to weddings or funerals."
Mr O'Donovan added that the Revenue had the best computer system in the public service -- and urgently needed to link it properly with the IT system at the Department of Social Protection.
He said it was not fair that some people were "ripping off" the taxpayer when genuine social welfare claimants, the self-employed and PAYE workers were suffering.
"It's time to turn off the milking machine because the cow has run dry," he said.
The department said that under its anti-fraud plan for 2011--2013 there would be a greater focus on inter-agency co-operation at local level and an emphasis on undertaking joint projects and pooling of local knowledge.
The Irish Independent yesterday revealed one area where such co-operation was not currently happening.
The Revenue has failed to give the Department of Social Protection the names of more than 6,000 people who were caught fraudulently claiming the one-parent tax credit.
This lapse has meant thousands could still be claiming lone-parent social welfare allowances to which they are not entitled. This is separate from the investigation into joint mortgages.