Social benefits: It does not pay to be honest - MP complains

Labour MP Adrian Vassallo yesterday called for a review of social services to channel more help to deserving cases and to remove situations where it suited people to live on social services rather than find a job.

Mr Vassallo said he was all for curbing benefit fraud, but the current situation was such that for many people, it simply did not pay to be honest, underlining the need for a review of tax and social benefit structures.

He said during the debate on a Bill amending the Social Security Act that law enforcement on its own would not remove abuse and what was needed was a total revamp of the taxation system and the way social services were given, as well as a culture change. There were many unjust taxes, certain social services were too generous, while others were unfair and obscene.

Social Solidarity Minister Dolores Cristina in her introduction said that a person had been boarded out at age 29. He could not see how that had happened, as this person would not have paid enough social security contributions to be eligible for invalidity benefits. But there were some people who managed to be boarded out by paying something underhand and did not even appear before the board.

It was not true that all those who were boarded out were "bummers". Some simply had no choice but to seek this benefit. For example one only received unemployment benefits for six months, after which one had to apply for relief. But to receive this benefit, one had to have less than Lm10,000 in the bank in the case of a married couple or Lm6,000 in the case of a single person. If they were not given relief benefits what other option did they have except to be boarded out?

Many people who sought invalidity benefits were over 50, mostly over 55, who had no hope of finding a new job. There were many who would have been self-employed and could not keep up with costs and hounding by the tax authorities as well as manual workers who would have worked hard all their life but were now too tired. There were people who would have been injured at the place of work after which they would not be able to return to their job.

The board usually boarded these people out because it had a heart and it understood their situation. Most of these people would accept an alternative job and retraining, if they were available but as the situation stood, they did not have a choice.

Dr Vassallo said he was not saying that this was not abuse but it was a kind of abuse that one had to commit because he did not have a choice.

The Labour MP observed that the number of unmarried mothers had increased from 400 to 900 from 1996 to last year. They were given Lm30 a week in benefits. This amounted to close to Lm10 million. If they lived on their own they also benefited from several other subsidies, they were given preference for social housing and their children had preference to enter a Church school. So why should one get married nowadays? Was it fair for the state to pay these mothers while the fathers got away Scot free? And why did an unmarried mother whose father was a millionaire get the same benefits as one who was poor? Most of these people continued to live with their parents without getting married.

There were now also unmarried fathers. What was happening was that when an unmarried couple had the second baby, this was registered on the father so that both mother and father received benefits - about Lm75 a week for not doing anything. This was much better than working and getting the minimum wage.

It was these matters which led those who would have worked hard all their life to abuse.

Dr Vassallo said that an unemployed person with one child was given about Lm50 a week in relief. This was besides the pink card for medical services, no charge on water and electricity meters and no water and electricity surcharge. Why would such a person go to work and lose all these benefits? One would be better off not working.

There were even couples who were separated in name only, just so as to be eligible for benefits.

At the other end of the spectrum there were people who did not qualify for the pink card because their income would be over the limit by Lm2. Rather than getting reduced benefits, they got nothing at all, a situation which could lead one to abuse. Was this right?

The situation was such that the authorities were often strong with the weak but weak with the strong.

A Green Warden had fined an old lady for feeding the birds at Portes des Bombes but no one was fined for the rubbish all over Paceville. A poor woman's benefit was stopped because her son spent one night with his father when he was feeling sick. The parents were separated.

Dr Vassallo said that it was easy to catch abuse and the authorities already had the means to do so. How could an unemployed person on relief pay rent of Lm100 a month?

All prostitutes and their pimps were also on benefits and the same could be said for drug addicts.

But as the system stood, it did not pay to be honest. A culture change was needed. One should not wage a witchhunt against people who had been boarded out. And there should not just be enforcement, but a review of the system.

Earlier in the debate, Josè Herrera (MLP) said both sides of the House acknowledged that the welfare state concept was here to stay. However, anybody taking social benefits illicitly should not be allowed to get away with it because this amounted to misuse of taxes.

It was impossible to stamp out abuse completely, but so long as it was controllable this was tolerable.

Statistics showed that more than 9,000 people were receiving the invalidity pension, at a cost of Lm16 million. The Maltese were lucky to have a social services net which was the envy of many other countries.

On the other hand there should be a balance. The Maltese political system created clientelism, without which even the most intelligent politician did not get anywhere. This inevitably paved the way to abuse.

Doctors too occasionally came under pressure from the political spectrum to help board certain people out. It was the political pressure that was wrong and unacceptable. Worst of all was the fact that politicians were in competition with others of the same party for election.

Every politician was duty-bound to stand up for a constituent if the latter was right. What was wrong was helping a constituent at the cost of injustice towards others.

He felt most Maltese were honest, hard-working, helpful and charitable and agreed with the need to stamp out any kind of abuse.

Unfortunately, simple legislation could not work without the good will of whoever administered it. As the Bill stood there was still room for abuse because doctors on the medical panel would be appointed by the minister.

Interjecting, Mrs Cristina pointed out that the doctors would be recruited following a call for applications.

Continuing, Dr Herrera said he had not meant that Mrs Cristina would abuse of her position. But could one say that whoever had received any appointment had done so out of right rather than connections?

Nationalist MP Michael Asciak said that close to 12,000 people applied for different benefits. Around 9,000 received an invalidity pension and this amounted to a payment of Lm16.2 million a year. Was this money being efficiently spent?

There were indications that there was a certain amount of fraud in the sector, he said, but this did not mean doctors were involved. Fraud was generally made by non-medical and non-department staff. There were many people who believed that one had to pay money to be boarded out and others played this game.

It was not true, he said, that all those who had already been boarded out would have their case reviewed, but where there was abuse this had to stop. There were people who were boarded out, for example, and who were still working in the black economy.

The aim of this Bill was to ensure fairness and deter abuse but help the genuine cases as much as possible. It was important to have a more transparent procedure to remove the suspicion of abuse.

Dr Asciak referred to remarks by Karl Chircop (MLP) that the doctors sitting on the Invalidity Pensions Board should not be involved in politics. What was important, he said, was that such doctors did their duty and not what their political beliefs were. After all, former politicians, such as Vincent Moran, did such work and there was nothing wrong with this.

Dr Asciak also spoke on undercutting by some doctors and urged the government to establish a minimum level of doctors' fees (see Thursday's report).

Joe Abela (MLP) observed that one of the major changes which this Bill would bring about was that the number of doctors involved in assessing applications for invalidity pensions would drop from the current 43 to just two. How would these two handle all the work, and what would differentiate these doctors from others? How could these doctors take decisions involving different specialisations? Wasn't there a great risk of "pressures" on just two doctors? What expertise would these doctors have on reskilling?

Intervening, Mrs Cristina explained that the two doctors who Mr Abela had referred to would be administrative doctors who would examine documentation submitted with applications for invalidity pensions. They would not be the ones who would actually medically examine the applicants.

Continuing, Mr Abela said reskilling was important, but it was difficult and expensive. Was the ETC equipped for it? What the government had been doing so far, when it said it was restructuring companies, was simply to offer early retirement. With jobs being so hard to come by for perfectly healthy people, what would the situation be for people who needed to be retrained because they were not fit enough to continue their present job?

All abuse of social service was wrong. But the government too should not allow abuse, such as in the way it granted public property cheaply to well-off entrepreneurs or did not collect funds due to it, as in the case of the Jumbo Lido in Sliema. Politicians, he stressed, should show commitment against abuse, rather than try to close an eye. If the government was committed in having people return to work, it needed to invest in the systems needed to examine such people and train them accordingly.

Other speakers will be reported in another issue.