IRELAND 23 February 2018
Value for Money Examination 23: The Administration of Supplementary Welfare Allowances Summary
The Supplementary Welfare Allowances (SWA) scheme was introduced in 1977 as a scheme of last resort to provide financial and other assistance on the basis of need with the objective of breaking the cycle of poverty in Ireland. The scheme is managed by the Department of Social, Community and Family Affairs (the Department) but is delivered locally through Community Welfare Officers (CWOs) as pan of the community welfare service operated by the health boards. There were approximately 300,000 recipients who received payments of ?152 million in 1996. The overall administration costs in 1996 were almost ? 17 million.
The main objectives of the examination were to
evaluate the efficiency of the administration of the scheme
consider the administrative arrangements in terms of the potential for improving the service provided, at no additional cost, or reducing the administrative resources required
review the impact of changes in the nature and extent of poverty on the scope of the scheme, in particular the provision of information, advice and referral services
review current strategic management issues associated with ensuring the continuing effectiveness of the scheme.
Efficiency of Administration
In the period 1987-1996 there has been an average annual increase of 13.1% in recipients across the health boards whereas the average annual increase in administration costs was 4.5%. This represents an overall throughput improvement of 8.2% per year in constant 1987 prices. The improvement varied across health boards from 4.8% per year in the Southern Health Board to 13.9% in the Midland Health Board.
A range of unit costs was noted from an analysis of claims paid under each component of SWA across the health boards. For example, the unit cost for administering a successful basic payment varied from ?18.95 in the Western Health Board to ?43.00 in the South Eastern Health Board. The range in efficiency improvements and in unit costs suggests there is a systematic difference in the manner in which components of the scheme are administered. The unit cost analysis was limited due to the non-availability of data regarding the incidence of unsuccessful claims.
The ratio of administrative costs to SWA payments was compared with United Kingdom (UK) schemes which have similar objectives and with all schemes administered by the Department. It was found that the percentage administrative cost of basic payments and exceptional/urgent needs payments were in line with their UK equivalents. The percentage administration cost of rent and mortgage payments (5.4%) was almost double the UK housing benefit scheme (2.8%) but this may be due to the increased administration required in Ireland in dealing exclusively with the private rented sector. The overall percentage administration cost for Departmental schemes was 5% compared to 7.60/o for the entitlement-based components of the SWA scheme.
The Department was unable to provide analysis of the administration costs of schemes which it operates where there may be an administrative effort similar to the components of SWA. It is of the view that significant economies are unlikely to arise solely from the direct transfer of administration of the entitlement-based components of the SWA scheme to the Department.
A significant portion (58%) of basic payments are `interim', viz, made while the Department determines eligibility for receipt of benefit from an alternative Departmental scheme. It is estimated that excess administrative costs of some ?2.0 million are incurred in respect of these interim payments because of duplication of means testing between the health boards and the Department. These interim payments should be made directly by the Department. The examination found widespread agreement that, as rent and mortgage supplements have become mainstream supports, they should not be administered by the health boards as part of SWA. The administration of the back to school clothing and footwear allowance involves a means test which duplicates existing means tests for other Departmental schemes. There is a potential for administrative improvement worth up to ?2.1 million if the means tests were rationalised. However, additional payments under revised eligibility criteria might ensue.
Delivery of Information, Advice and Referral Services
It was originally intended that CWOs would provide information, advice and referral services to SWA clients. However, the large increase in the number of recipients of SWA combined with the change in the nature of poverty in Ireland since 1977 has services. The SWA scheme is now operating mainly as a financial support laced considerable pressure on the time available for CWOs to provide these mechanism. Although the Department funds the provision of information, advice and referral services by CWOs to SWA clients, it considers that these services are a minor part of the SWA scheme within the community welfare service. The Department itself provides similar services to claimants at its social welfare offices. In the same period, there have been significant developments in the voluntary sector, including the emergence of organisations, funded by the Department, which provide non-financial advisory services.
The current proliferation of sources of information and advice should be reviewed with a view to rationalising the responsibilities of the various organisations involved, clarifying the role of OWOs and considering the effectiveness of the total amount of State funding provided for this purpose. The Department of Health and Children, the health boards and the Department all need to be involved in this review/rationalisation.
Strategic Management Issues
The Department has a limited capability for monitoring the changing profile of the population of recipients as a basis for anticipating future needs. In the past reliance was placed on specifically commissioned studies but a database of recipients is now being developed.
The effectiveness of the scheme depends on the extent of information available to the public and the training of CWOs. While some improvements have been made recently in both of these areas there is room for further improvements.
The involvement of both the health boards and the Department in the administration of SWA complicates the management of the scheme. The administration of SWA would be improved if service agreements were drawn up between the Department and the health boards which defined the objectives and targets of the SWA scheme and suitable performance measures. The Department has acknowledged this and certain aspects of procedures and controls have been included in a national procedures manual. However, the documentation produced to date does not deal directly with performance measurement issues.
The implementation of the Integrated Short Term Scheme (ISTS) computer system has been helpful to both clients and CWOs. However, the administration burdens on CWOs have increased. The management information generated by the system is not sufficient but this matter is being addressed.
Although some external reviews of SWA have been made over the past ten years, a system of regular programme evaluation is not yet in place to assess the extent to which SWA objectives are achieved and to reviewthe potential for innovation. The Department has indicated that it intends to carry out a programme evaluation of the scheme.