Thousands could have claimed PUP payments without proving lost income
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A lack of ongoing checks led to thousands of people being able to claim the Pandemic Unemployment Payment without proving that they had lost income due to Covid-19 lockdowns.
A report from the Comptroller and Auditor General (C&AG) finds that while the PUP was established with great expediency and effort, there were deficiencies in the handling of ongoing data to ensure those who received assistance were entitled to it.
The C&AG report finds that from March 2020 to the end of February 2021, the Department received 1.75 million applications, comprising 1.3 million online applications and 450,000 paper-based forms.
However, it says that the Department accepted applications "through the application system on the working assumption that the information provided by the claimant was true". The basis of this belief was a signed declaration which each applicant returned, but the report says that this declaration was not as in-depth in the paper version of the application.
"(The paper version) did not request, as the online application did, information on the detailed conditions, or require the applicant to declare agreement that PUP payments would be repayable if any of the information provided was untrue."
A number of checks were carried out in July 2020, March 2021 and July 2021, which resulted in tens of thousands of claims being stopped. "In July 2020, each claimant was required to confirm their continuing eligibility, resulting in 36,500 claims being closed.
"In March 2021, cases (122,000) in payment since April 2020 were required to confirm their continuing eligibility, resulting in almost 10,600 claims being closed by the Department.
"In July 2021, each claimant was required to confirm their continuing eligibility, resulting in 18,500 claims being closed by the Department."
The looser requirements were, however, necessary, the report concludes.
"When the PUP scheme was launched on an emergency basis, the Accounting Officer recognised that the control regime would not be as rigorous as that normally applied to other scheme payments and therefore the risk of overpayments would be higher than normal.
"The Department has stated that the less rigorous controls were considered unavoidable given the high volume of claims to be processed, the impact of social distancing measures on processing capability, the potential absence of staff due to Covid-19 illness, overriding public interest considerations including the avoidance, at a time of high anxiety within the community, of any additional stress that would be caused by an insistence on adherence to full processing standards with attendant long delays in payments, and the economic stabilisation value of payments made in injecting money and liquidity into the economy.
"The Department has also stated its anticipation that, even if some people sought to take advantage of the scheme, most people would, at a time of community togetherness, act honourably and honestly."
The report adds that the changing of the rates of pay of the PUP in June 2020 had a "significant impact" on the number of people claiming the higher €350 rate.
"For payments on 30 June 2020, all 439,000 claimants were in receipt of €350 per week. For payments on October 27, 2020, just 41% of the 296,000 claimants were in receipt of the higher rate."
On overpayments, the report finds that the raising of overpayments in relation to any PUP scheme payments did not commence until the final weeks of 2020 — overpayments totalling €295,000 were raised in relation to 117 claimants in 2020.
By the end of June 2021, the Department had received voluntary repayments of €8.3 million from 9,200 claimants who applied for the PUP and subsequently judged that they were not eligible for the payment.
By the end of June 2021, overpayments totalling €9 million had been raised by the Department in relation to 3,000 claimants who had been working while claiming PUP. By the end of August, this had increased to €14.5 million in relation to 4,300 claimants.
The C&AG suggests that around 9% of those who claimed the PUP were not eligible.
"There is evidence that for a sample of employee claims reviewed as part of this examination, over 9% of the claimants were not eligible for the PUP payment received on the date tested — around one-quarter of these claimants did not appear to have been in employment prior to claiming the PUP and three-quarters appear to have worked while applying for PUP or had recommenced employment but did not inform the Department."
It says that while the Department carried out a number of checks throughout the last 18 months, it did not analyse the results in terms of the number of claims that were ceased, which prevented it from "identifying specific cohorts of claimants that presented a higher risk of ineligible payment".
It recommends that claimants should be monitored as they transition to other schemes or to employment, to ensure all overpayments are captured and that a sectoral analysis take place to track the highest risks of overpayment.