Debate on innvalidity pension reform - 17/2/2006

Benefit fraud
'Government will not conduct witch hunt' - minister
Social Solidarity Minister Dolores Cristina has expressed concern that while all MPs had spoken in Parliament against benefit fraud, some still seemed to have sought justification for the abuser, with one saying that it did not pay to be honest.

Winding up the debate on amendments to the Social Security Act targeting benefit fraud, Mrs Cristina said the government had no intention of engaging in a witch hunt and no genuine applications for invalidity pensions would be thwarted.

But investigation of most reports of benefit fraud had been found to be well founded.

All reports had been referred to the police, but unfortunately many whistle-blowers then decided to withdraw their initial allegations, leaving the police with little or nothing to move on.

Mrs Cristina said there was consensus that invalidity benefits should no longer be awarded for more than three years, after which each case would be reviewed. It went without saying that any genuine case would be confirmed.

There would not be a wholesale re-examination of the 9,000 people already receiving invalidity benefits, but the Director of Social Services had the authority to carry out checks at random or whenever abuse was suspected.

Furthermore, anyone who did not agree with a departmental decision could have recourse to the Arbiter.

Mrs Cristina said that contrary to the impression given by some, in her introduction to the debate she had not attacked the medical profession. It was the system itself that had given rise to bad practices, and it was the system that needed revamping. The medical boards would not be discontinued because they would still have to examine other applicants for social benefits. It was not excluded that there would be changes in the number of members on the medical panel, currently 47. Some of these doctors had been there for a large number of years.

It was only in the context of invalidity pensions that the panel would be discontinued.

Mrs Cristina made it clear that the doctors who would consider applications for invalidity benefit would not be directly selected by her, but following a call for expression of interest and subsequent tender. This would be a contract of work with definite terms and conditions. If there could be any more transparent manner she would like to know about it.

Mrs Cristina said consideration of an application for invalidity pensions would not consist solely of points for the medical condition but would also give a lot of weight to assessment reports. The circumstances of an individual's life, not just the medical condition, would be assessed.

She insisted that every applicant would have to bring along a medical history. If none existed the applicant would have a choice of getting it compiled by private or state doctors. In the latter case the doctors should be full-time employees.

On the proposed fast track for certain cases, Mrs Cristina explained that any applicant for invalidity pension who was not in receipt of any other social service would have his application given top priority in order to avoid hardship. No favouritism would be involved.

Referring to comments by Evarist Bartolo, the minister said one must be careful not to have people preferring to stay unemployed because it brought in almost as much money as going to work. On the other hand there was no government intention to cut down on social benefits.

On the perceived justification of abuse Mrs Cristina said benefit fraud existed all over the world. The most widely abused were invalidity pensions and social assistance benefits, and this seemed to happen more as the system got better. It was indeed a fine line to walk between helping people and cutting down abuse.

Concluding, she said the government had started with cutting down abuses on invalidity pensions. This would go on to other benefits, but no witch hunt is involved.

Earlier in the debate, Evarist Bartolo (MLP) said that in a situation of abuse of public funds, one needed to reflect on the social culture which permitted and even encouraged abuse. There were usually many reasons, and responsibilities could be apportioned to many areas, including politicians. Even the Church needed to be included because one hardly ever heard any sermons about public morality, condemning benefit fraud or corruption. The culture in Malta was that public funds belonged to no one. Having modern laws to deter benefit fraud was not good enough, and that had to be accompanied by fair and uniform enforcement. There also needed to be good governance and efficient use of public funds.

When people genuinely could not continue to work, they needed to be retrained so that they could contribute to society in a way which was also beneficial for them.

There should also be ongoing educational campaigns against benefit fraud. The media, too, should be socially committed to ensure that state systems operated well and that citizens lived the principles of honesty.

Joe Debono Grech (MLP) said he agreed that abuses should be curbed, but did the ETC expect people to work with contractors for peanuts?

Corruption was being blamed to justify this new Bill. He was not saying that everything had been perfect but one should say that the law was being changed because changes were needed and not because there was corruption.

He complained that when an appeal needed to be made after an application for invalidity benefit was rejected, proceedings took six months, sometimes causing financial hardship.

Charles Mangion (MLP) said a balance had to be struck between eliminating abuse and reducing the right of those who needed social assistance by restricting the eligibility criteria. One had to ensure that those who really deserved help received it. One had to be careful that new measures would not be the cause of further injustices.

The Labour MP observed that the number of beneficiaries of invalidity benefits had increased substantially in the two years before the last election, whereas the growth rate had been minimal in previous years. Had the state of the people's health deteriorated, or had it been more convenient to allow abuse in the interest of votes?

Dr Mangion underlined the need for the number of gainfully occupied to grow, because that was the way to sustain social benefits, along with economic growth.

It was worrying that the activity rate in Malta had gone down marginally between 2004 and last year.

To make the situation worse, the economy was stagnant, with a decline in exports and industrial output and poor tourism figures.

Parliamentary Secretary Edwin Vassallo denied that the economy was stagnant, pointing to more spending by tourists and job creation in the private sector. Malta's biggest problem, he said, was that there were people who wanted to go into business or to expand but there was no space where to place them.

He said this legislation should lead to the better administration of social benefits. Some people had got used to receiving benefits for nothing and action was needed so that people would not prefer benefits to jobs.

Noel Farrugia (MLP) insisted that in rightly seeking to curb benefit fraud, the government also needed to tackle the hardship which many people were suffering because of the rising cost of living.

From his research it resulted that what used to cost Lm850 in 2003 today cost Lm1,207. Yet those who depended on benefits had not seen their income rise as much.

The government must reconsider all parameters if it really wanted to find out where the abuses were springing from. It was the government, after all, which had not kept its promise to bring down costs.

Frederick Azzopardi (PN) said the Bill would ensure that only those really needing invalidity pensions would get them.

Over the past year there had been an increase of some 400 people in receipt of invalidity pensions. The government's efforts to bring the deficit down to acceptable limits must be based on better control of spending and greater control of abuse of social benefits, if it was not to continue to borrow money.

Such controls inevitably made enemies, especially out of those who were abusing. But the government was intent on eliminating abuses wherever they were committed.

Michael Farrugia (MLP) said there were both direct and indirect ways of nibbling away at social services. The number of people receiving children's allowance, for example, had been reduced because income thresholds had not been raised for many years and fewer people were eligible for this benefit.

Ill-advised changes to the Income Tax Act had continued to adversely affect these same families.

It was good to attack abuses, but one should also try to find out why the abuses were taking place. Was the abuser being driven to it because of government's own actions? One of the greatest problems was for people of a certain age to find new jobs. They felt that society at large was giving them a bad deal.

Dr Farrugia insisted that doctors on medical boards needed to be objective and humane. He knew of several cases where applicants were denied aid when their need was obvious. Some died after a short time.

The doctors on the new panel must be well chosen with a view to them being well aware of the various situations they were supposed to be examining, not only medically but socially. Failure to do this would result in potentially much greater problems.

Health Minister Louis Deguara said he had been impressed by the way the reasons behind the Bill had been interpreted outside the House - as if the government were suddenly intent on doing away with invalidity pensions, something which was not true.

Neither was it true that the government was saying that all recipients of invalidity pensions were abusers.

There was no doubt that abuses, some of them serious, did exist. It was no longer acceptable for an applicant to have recourse to certain quarters and pay bribes in order to be boarded out, or to apply for an invalidity pension and then engage in the black economy.

Certain claims of physical disabilities would have to come under closer scrutiny.

Things were highly dubious when an established doctor issued 15 or more certificates of invalidity on a single day.

The huge number of people being boarded out was, in itself, proof of abuse. How much sense did it make that certain people who came back from Australia passed the invalidity interview in Malta but did not pass in Australia?

Dr Deguara said that every doctor should carefully weigh the consequences of every medical certificate that he or she signed, and he was sure that the vast majority of doctors did just that.

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