Crackdown on welfare fraud closes in on cheats
Focus on hairdressers and taxi drivers as 'high risks' for abuse
JOAN Burton's "welfare police" are planning high-profile investigations into hairdressers, scrap dealers, couriers, clothes recyclers, taxi drivers, market stall holders, haulage firms and nursing homes in the crackdown on welfare fraud.
According to a briefing document released to the Sunday Independent, the Special Investigations Unit will unleash inspectors trained by the garda fraud squad on the sectors in the coming months, after they were identified as high-risk areas for welfare abuse.
The unit of 91 inspectors, set up last September by the Minister for Social Protection, has already had several successes. According to the briefing document, they include:
• An investigation into five transport companies uncovered 20 suspected dole cheats who were working while claiming benefits and 38 who were not registered for tax.
Their welfare benefits have been stopped, saving the taxpayer €170,000 that would have been paid if the frauds hadn't been detected.
• A probe of 37 people living on social welfare payments but enjoying apparently affluent lifestyle.
Of these, 16 have had their social welfare payments stopped, saving the taxpayer €375,000 in future payments.
• A spot check of 15 taxi drivers in Dublin's National Transport Authority office, which revealed that two were engaged in welfare fraud.
Payments to the pair have been stopped.
• Suspected cigarette smuggler under investigation by customs, who claimed the dole, but who travelled frequently abroad, owned two apartments and had other investments worth €35,000. His wife bought a €125,000 apartment and held several bank accounts. His payments have been stopped.
Other targets included three garden centres, where inspectors found that none of the 85 employees were registered for tax and several were claiming social welfare as well as working.
In another ongoing joint investigation with Revenue, inspectors are examining 672 self-employed people were investigated, and have so far found that 200 claimed allowances while concealing their incomes or the fact that they were working.
Illicit scrap metal businesses have proved to be fertile ground for welfare fraud.
At least 61 people were prosecuted in the District Courts for welfare fraud in the first five months of this year, while 222 were prosecuted last year.
In addition, 174 more serious cases have been referred to the garda fraud squad. The garda cases include high-net-worth frauds, including five cases in each of which the suspected frauds to the taxpayer is more than €200,000.
"When you look at the system when we had full employment, it was simply regarded as service delivery. There was a low threshold of proofs -- it was very easily done, there was no focus on verifying and auditing. That is what has improved," said a garda source.
The scale of fraud and waste in the Department of Social Protection is only becoming apparent since stricter controls were introduced to clamp down on fraudulent claims and mistakes that led to huge overpayments.
The department has the biggest government budget, of €21bn.
The Dail Public Accounts Committee heard last week that €92m was overpaid to social welfare claimants last year, €30m of it because of fraudulent claims, with the remainder paid out in error.
In 2009, the value of overpayments detected was €67m, €20m of which went on fraudulent claims.
Ms Burton, claimed that new control measures in the department and the crackdown on welfare fraud "saved" the taxpayer €645m.
However, the money isn't actually cash "saved", but represents what the taxpayer would have paid out had the mistakes and frauds not been detected by various controls.
John McGuinness, the chairman of PAC and a Fianna Fail TD, said the fraud and errors uncovered so far were the tip of iceberg.
"It is the tip of the iceberg because they took their eye off the ball and took comfort from the fact that they could say that they saved the department €645m," he said.
"But that's not bankable money. That is a notional figure, they are not actual savings. It is fantasy economics."
He said the department should not only be detecting fraud but trying to recoup the money they paid out either in error or to tax cheats.
"There is €315m outstanding. They seem to have no appetite to go out and collect it. At the same time, this same department is forcing those in receipt of domiciliary care allowance to have their cases reviewed, the reviews are going on for months, and payments are being stopped.
"Meanwhile, all of this money is leaking out of the system."