Between January and June 2009, Maltese taxpayers paid €354.3million in social security benefits. We pay them but we have no control on how this money is distributed. Taxpayers feel frustrated because it is their money which is at stake, and they have a right to know who is benefiting from it, and why.
I discussed this subject last week with an acquaintance of mine, and he suggested that the only way is to publish the names of those who received social security benefits. I do not think that this is a bad idea, especially when it is our money that is at stake, and it is not fair for people to continue to spit in our faces by receiving our money because of an inefficient administrative system.
I am not referring to the Benefit Fraud and Investigation Directorate, which was set up in 2005 with the aim of investigating report of alleged abuse in social benefits. With their limited resources they work wonders, but the fact remains that the entire system has to be revamped altogether.
We cannot measure the economic success in this country by the money we spend on social security benefits – that is not a recipe of success, but of failure. Nor can we tolerate that the good work carried out by the anti-fraud section is disrupted by politicians – sometimes even social security staff – by putting the fraudsters back on the DSS payroll.
What I am referring to is a database for all the public to access so that the government departments and authorities stop being an accomplice to those who abuse of the social security system. Let us not forget that fraud, customer error and official error represent a major risk to the successful delivery of social benefits in Malta .
Overpayments incurred due to fraud and underpayments lead to distress for claimants, and poor administrative performance also has an adverse effect on the morale of the Social Security Department.
The delivery of social benefits involves large amounts of public expenditure, which is further increased by losses through fraud and error. Fraud and error therefore represent an auditing risk for departments responsible for benefit administration. Moreover, as a criminal activity, benefit fraud represents a serious legal and moral concern. The issue therefore is hard to ignore and the government must act with more vigour because the votes do not come from social security beneficiaries only but the bulk comes from the taxpayers’ money.
We are tired of being taken for a ride by those who defraud the system. Take the case of those who put their identity card number on their garage door so that for social security purposes he and she is registered on different door numbers so that they can continue to receive the social security benefits for their fatherless children, when in actual fact they live in one place .
Take the case of the unemployed and those on social security benefits who still manage to get a house loan, or go round in expensive cars. Take the case of those who are on social security benefits but whose assets are registered in the name of the wife. The case of the taxi driver who has been working for the past 30 years, but who is ‘unemployed’ as far as statistics are concerned because he hires the taxi. Or worse still, the case of the skip-truck driver who receives unemployment benefits, but who manages to sign contracts of work with government agencies because they do not bother to check if that person has his records straight with the Employment Training Corporation.
Or the case of that elderly lady who was on social assistance, but who was given a licence by the Malta Tourism Authority to host students at her house – not knowing that she could not do such work, and not even checking if the applicant was receiving any social security contributions.
How about the fact that one third of the Maltese are schizophrenic? Do not believe that that is actually the case: psychiatrists know that certifying a patient with schizophrenia is the only way for that patient to get disability benefits, as no other mental condition entitles you to such benefits.
Then there those housewives who are unemployed for ETC purposes, but who help their husbands in the business, and even accept to be registered with the VAT department .
Nor are we making the applicants sign a declaration that they do not own assets overseas, as the department has no way of controlling whether you are a millionaire abroad and a pauper in Malta.
I cannot understand how this continues to happen when the directorate within the department of social security is supposed to coordinate its operations in conjunction with a number of government departments such as the VAT department, tax compliance unit, as well as the private sector.
I am sorry but if we continue to let company directors, shareholders, secretaries, be exempt from having an employment registration number, we cannot say that there is co-ordination between this and that department. Just as when the Commissioner of VAT replied that he refers every VAT application to the ETC. I am sorry but it should be the other way round: nobody can register for VAT unless he has an employment number.
Mind you, in its 2009 report to the EU the Directorate complained that the CVA system in Valletta impinged on the number of on-the-spot investigations that were carried out at short notice, and also increased the risks for members of staff with regard to possible attacks while the workers walk to cars that are parked at a distance from their office.
So you may ask: but what is the way forward? Different countries take different approaches to the problem of social security fraud. Australia has developed a central agency handling social benefits: Centrelink, which is accountable to the Australian Government by entering into business partnership agreements which detail joint outcomes and key performance indicators.
Canada focuses on prevention, which has achieved savings through risk-base claimants information sessions. France recently launched a range of measures to improve data management, including the planned development of a national database of customer records and use of national reference numbers to identity claimants across different benefit schemes and insurance funds.
The Netherlands benefit system places much emphasis on the rights and obligations of the claimant to inform the authorities of new circumstances. For example, benefit claim forms contain a contract which stipulates the rights and obligations of the claimant. Claimant profiles are also updated once every two years.
The New Zealand’s Accuracy Reporting Programme, the setting of targets for control measures, the requirement for claimants to re-establish core eligibility for benefits after a fixed period and the introduction of single core benefit. This means that the core eligibility for benefits is re-assessed after 26 to 52 weeks, depending on the benefit. The government introduced a single core benefit which involves one set of rates and one set of eligibility criteria and add-ons for people with high housing, childcare or disability costs.
But they all target the return on investment per control measure, and they perform cost-benefit analyses of new control programmes in which savings in benefit payments are set against administrative costs. These analyses are set out in the annual report of the Ministry, in the Netherlands for instance, and serve to determine whether programmes are or remain cost-effective.
In Malta, we do nothing of the sort. We set no targets, we do not know if running the anti-fraud directorate is more costly than the money collected, and we do not know if the people apprehended by the directorate are not being given a second chance by the same department.
With what I come across in my work, I can say that social security fraud is still rampant and all they have to do is to come to court and see for themselves!
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