Overpayment of social security benefits between 2012 and 2013 increased by €2.5 million to €18.6 million.

Auditor General Charles Mifsud told the Public Accounts Committee such overpayments were mainly the result of incorrect or inaccurate declarations by beneficiaries, failure to report changes in circumstances by recipients or errors made by the department’s officers during the assessment process.

The PAC resolved to seek legal advice from the Attorney General about the prescription period governing such overpayments because it was not clear whether this was two or five years. If it were two years, then millions of euros were not recoverable, Mr Mifsud noted.

Overpayments were mainly the result of incorrect or inaccurate declarations

The permanent secretary at the Ministry for the Family and Social Solidarity, Mark Mousù, said a total of 677 cases of abuse, totalling €3.7 million, were detected in 2010. He expected progress to be made next year on a unique means-testing mechanism and the strengthening of the department’s business intelligence in tandem with the Inland Revenue Department. Ray Chetcuti, director general of the non-contributory section, said that in assessing the veracity of a claim for such benefits, the department had to rely to a large degree on declarations made by claimants. One of the problems after detecting fraud was how to recoup the extra amounts paid out because beneficiaries did not have any collateral.

There was no deterrent but through measures announced in the 2015 Budget the government sounded a warning to fraudsters.

The department also expressed concern with overpayments to elderly people once these entered State-financed residential homes. A guidance policy was being suggested so that the 60 per cent pension reduction could be made immediately once the elderly entered a home. The Audit Office had noted that the inexistence of agreements to corroborate the receipt of foreign pensions made the department vulnerable to overpayments due to the total reliance on the integrity of claimants to submit a correct declaration.

The department told the PAC it was trying to sign agreements with other countries to facilitate the exchange of information and thus minimize overpayments as much as possible. Countries like the UK, Australia and Canada were of particular importance due to the mass emigration of Maltese citizens in the 1960s who had now reached pensionable age and decided to retire in Malta.

Referring to Maltese pension payments abroad, the Audit Office satisfactorily noted that a procedure to control the issue of benefits and limit overpayments to claimants residing abroad has been introduced. It had noted that unless communication with the Treasury Department was enhanced or access was given to the Social Services Department to confirm information on claimants’ Treasury pension, substantial overpayments would continue to be made.

In the circumstances, given the age of the beneficiaries, the recoverability of such amounts was questionable, leading to possible loss of public funds. The department was thus encouraged to take immediate action to obtain direct access to information regarding Treasury pension beneficiaries, preferably by periodically uploading such data automatically to limit the amount of overpayments to the barest minimum.

The meeting was informed that most of the Audit Office recommendations had been followed.