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Legislation designed to recoup over €20 million from insurance companies still not activated

Legislation that was passed last November by the Dáil and that was designed to recoup over €20 million from insurance companies has yet to be activated.

 

In a Dáil reply to me, Minister Joan Burton says it will be another two months before the legislation can be commenced.

 

Sections 13 and 14 of the Social Welfare and Pensions Act 2014 sought to address a long-standing anomaly whereby tax-payers were essentially subsidising insurance companies through the welfare system. The anomaly typically arises where a person suffers an injury in an accident, is forced to stop work for a while, and therefore suffers a loss of income. If the person claims a social welfare payment during the period off work but subsequently makes a successful insurance claim against a third party for loss of earnings, the value of the social welfare payment is deducted from the overall award. In other words, even though an award has been made and in many cases liability accepted, the State loses out.

 

In other jurisdictions, notably Northern Ireland, the value of the welfare payment is reimbursed to the State by insurers. The lack of any similar arrangement here costs the exchequer over €20 million a year.

 

Seven months after the legislation was passed by the Dáil, the legislation remains to be implemented which means that the State has foregone over €10 million in potential revenue.

 

Question No: 72                                                                     Ref No: 24071-14

 

To the Minister for Social Protection

 

To ask the Minister for Social Protection the savings that have so far been achieved from the introduction of section 13 and section 14 of the Social Welfare and Pensions Act, 2014; and when these sections of the Act were commenced.

– Róisín Shortall.

 

*    For WRITTEN answer on Thursday, 5th June, 2014.

 

R E P L Y

Minister for Social Protection (Joan Burton T.D):

Presently the department are preparing for implementation and it is intended to commence Section 13 and 14 of the Social Welfare and Pensions Act, 2013 inside the next two months.

It is estimated that the measure will result in €20 million approx. annually being recovered by the Department.