THE PRESS TUESDAY, JULY 5, 1983. The honest 10 per cent

Press, 5 July 1983, Page 20

THE PRESS TUESDAY, JULY 5, 1983. The honest 10 per cent

The Minister of Social Welfare, Mr Young, is pleased with the result of the one-month amnesty on fraudulent benefit claims. The amnesty, run by his department, allowed social welfare beneficiaries to cancel benefits to which they were not entitled and they had the assurance that no further action would be taken. The amnesty ended last week. By then, 468 people had cancelled benefits that would cost taxpayers a total of $2.6 million in a full year. Taxpayers will be grateful that the saving has been made, even though it falls far short of the $23.6 million that the department estimates is paid out on fraudulent benefit claims each year.

The department’s estimate is an attempt to measure something that probably can never be determined with certainty; the estimate might be astray by some millions of dollars. Nevertheless, on the best information available, the amnesty drew a response from 10 per cent or so of people accepting benefits to which they are not entitled. It must be presumed that the remainder have made a conscious decision to claim and receive money contrary to the rules, and to run the risk of discovery. This risk will increase because the Department of Social Welfare will now begin a programme of checks on beneficiaries. Special teams will interview beneficiaries in their own homes, at mutually arranged times, to check that the correct benefit is being paid.

At first, the programme will concentrate on those benefits that are known to be the most abused: the unemployment benefit and the domestic purposes benefit. Of the benefits cancelled during the amnesty, almost half of them were unemployment benefits and more than a third were domestic purposes benefits. Although people had not been asked to give a reason for wanting to cancel benefits that they had been receiving, many volunteered the information. Most either had returned to work or were living in a de facto relationship. Such changes in circumstances, combined with the slim chances until now of the changes coming

to the attention of the department, are recognised as the main source of social welfare cheating.

As a proportion of the total spending on benefits — $3OOO million a year — about $24 million in fraudulent claims spread over 1.5 million beneficiaries does not appear to be extreme, but the monetary cost of benefit cheating is only part of the damage being done to the social welfare system. Each example of welfare fraud reinforces the public’s fears that the taxpayer is being robbed. The system is brought into disrepute, division in the community is intensified, and the “bludger” label is hung indiscriminately and unfairly upon legitimate beneficiaries. The amnesty has confirmed that a disappointingly high number of people did not correct what they knew to be false payments as soon as their circumstances changed. Worse, in many instances people had accepted unwarranted benefit payments for several years. Mr Young probably has reason to be satisfied that the amnesty stirred the consciences of these people. For some of them the amnesty might have provided a way out of a situation into which they had drifted, and which they were loath to draw to the attention of the authorities for fear of prosecution or of being asked for reimbursement. The immediate benefit to taxpayers is small enough: a presumed tenth of the cheating will stop, although taxpayers remain out of pocket for its unknown cost to date. The greatest benefit of the amnesty in the long term will be that it has cleared the decks. Welfare cheats now have no excuse for accepting payments fraudulently. These are the real bludgers and a vigorous campaign to expose them will benefit taxpayers and legitimate beneficiaries alike. The trouble is that, in the process, many legitimate beneficiaries will have to bear with inquiries that they will understandably resent, just as honest taxpayers have to accept investigations that are designed to discover tax evaders.