Value for Money Examination  08:   Means Testing   Summary


Background

Means Testing is a necessary procedure carried out in order to validate entitlement to various state and local authority schemes.

Means information gathered usually relates to an applicant's financial status at a  particular point in time. Accordingly, subsequent applications generally result in a requirement for a fresh assessment of means to establish the up to date financial status of the applicant.

The examination identified 42 means tested schemes, twenty of which are administered by either the Department of Social Welfare (DSW) or the health boards. These twenty schemes account for the bulk of expenditure on all means tested schemes and the majority of means tests themselves.

It is estimated that the annual cost to DSW of staff involved in the administration of means testing is ?4.4m. The annual cost of health board administration of means testing was estimated at ?9.7m. In the case of local authorities, the annual cost of staff involved in means testing differential rent claimants was estimated at ?1m

When account is taken of schemes operated by other bodies, the estimated annual cost of means testing would be in excess of ?15m. At least 600,000 means tests are completed annually.

The Public Accounts Committee of Dáil ?reann has in the past questioned whether the system is efficient and whether the multiple testing of applicants is necessary. Accordingly, the examination set out to identify whether scope existed for simplification and rationalisation of means testing.

Means Testing Inefficiencies

Three principal inefficiencies were identified.

  • In a test examination, it was found that 40 per cent of applicants already in receipt of welfare payments at the time of application were retested.
  • Supplementary Welfare Allowance (SWA), while funded from the Vote for Social Welfare, is administered by the health boards. This leads to duplicate testing of applicants for DSW schemes by health boards.
  • A high proportion (38 per cent) of applicants had no means at the time of application.

Impediments to Harmonisation

The examination found a number of impediments to harmonisation of means testing.

  • Variation occurs in how data is processed and held by organisations thus affecting their capacity to share information. Much data is manually processed.
  • The Data Protection Commissioner has reservations about information sharing systems and is of the view that any move to augment the existing level of sharing of means data should be preceded by the introduction of legislation to enable this to be done.
  • Certain schemes allow residual discretion, even after formal means assessment, to mitigate cases of hardship.

Opportunities to Achieve Efficiencies

The examination identified a number of possibilities to achieve more efficient means testing. It is not possible at this stage to indicate whether and to what extent savings can be achieved. A range of options set out below would have to be assessed in the context of social policy before a choice could be made on their application.

  • There may be merit in considering the use of a single means testing agency.
  • Categorisation of claimants on the basis of risk might be more extensively applied and interim awards made to low risk cases.
  • Schemes could be integrated by either placing them under the administration of a single department and/or consolidating assistance payments and client records without altering the power of decision or the attendant accountability.
  • There would appear to be merit in linking assistance schemes so that qualification for one may serve as a passport to other schemes thus eliminating duplicate means tests for applicants and reducing administration.
  • Efficiency could be achieved through greater sharing of information by means testing organisations. The provision of a definite shelf-life or currency for a means assessment would facilitate such sharing as would agreement between public sector means testing organisations on a unique identifier, such as the RSI number.
  • Adoption of a common definition of means with allowance for social policy driven variations in entitlements would assist in a harmonisation of reckonable means.