Official Report: Minutes of Evidence

The Chairperson (Mr Gildernew): I welcome from the Department for Communities David Tarr, its director of social security policy, legislation and decision-making. David is no stranger to the Committee. He is joined by Jennifer Gibb, a grade 7 in the Department's social security policy and legislation division for the proposed fraud, error and recovery Bill; Julie Nelson, the Department's director of debt management, benefit security, child maintenance and the Make the Call wrap-around service; Mark Morrison, the Department's acting deputy director of debt management and benefit security; and Donna Atkinson, a grade 7 with the Department's public authorities fraud, error and recovery project. I invite David to make a brief opening statement, after which we will have questions from Committee members.

Mr David Tarr (Department for Communities): Thank you, Chair and Committee members, for inviting us. I am the director of social security policy and legislation in the Department for Communities, so I have overall responsibility for the fraud, error and recovery Bill. My colleagues will have responsibility for its day-to-day management, if it goes ahead, as well as for its operational implementation.

I am here today to talk about the Public Authorities (Fraud, Error and Recovery) Bill, which I will refer to as the PAFER Bill, because the title is a bit of a mouthful. The Committee will be aware that it is proposed to introduce an equivalent Northern Ireland Bill in the Assembly. The GB Bill completed its progress through Parliament this week and will now receive Royal Assent. The Committee was provided with a written briefing on the legislation in July 2025. We are here today to address any points of concern or issues arising from that briefing that may need further clarification.

The Committee is aware that the PAFER Bill will introduce new powers to improve the Department for Work and Pensions' ability to address fraud and error in the social security system. The Bill includes safeguards, reporting mechanisms and independent oversight in order to ensure proportionate and effective use of the powers that are being proposed.

Fraud in the social security system is not a victimless crime. It is public services that suffer, and it is the taxpayer who is the victim of the crime. The losses waste sums of public money that could be put to better use. Departmental fraud and error estimates that are available for the 2024 calendar year show that, in overall terms, global loss — the total overpayments — has increased from 2·9% in 2023 to 3·7% in 2024. In monetary terms, that equates to an overpayment value of £350·3 million, which is up from £240·3 million in 2023. In the same period, expenditure on benefits and pensions in Northern Ireland rose from £8·4 billion to £9·4 billion. The total rate of overpayments owing to customer fraud increased from 2% in 2023 to 2·5% in 2024. Customer error increased from 0·6% to 0·8%, while official error increased from 0·3% to 0·4%.

The measures in the PAFER Bill and the proposed equivalent Bill for Northern Ireland will mean that more people are paid benefits and pensions accurately, that more errors are found and resolved earlier, that more individual debts from overpayments are minimised, that any suspected fraud can be identified and investigated sooner and that there is greater fairness and effectiveness in DFC's recovery of debt. The PAFER Bill aims to safeguard public money by reducing public-sector fraud, error and debt. The UK Government estimate that the new provisions will deliver benefits totalling £1·5 billion over the next five years. The majority of the benefits projected from the Bill, equating to £950 million, is expected to come from the eligibility verification measure, with the remainder arising largely from new debt recovery powers.

I will briefly summarise the measures proposed in the Bill's Northern Ireland equivalent. The eligibility verification measure will improve DFC's access to important data from financial institutions to help verify entitlement, to ensure that payments are correct and to prevent overpayments and debt accruing. No personal information will be shared by DFC. The power will be used only to obtain information on accounts that receive a specified benefit and on any accounts that are linked to the benefit-receiving account if those accounts match certain eligibility indicators, suggesting that someone may be in receipt of an incorrect payment, such as if they are in receipt of universal credit (UC) and have savings of over £16,000. Banks and other financial institutions will be required to share only limited information, and no decision will be made on benefit entitlement on that information alone. The measure will not allow DFC to see how people spend their money, and the Department will consider the information returned in order to ascertain whether any further inquiry or investigation is needed.

DWP has made clear in its legislation that, prior to issuing an eligibility verification notice, there will be a duty on the Secretary of State to consider whether issuing such a notice is necessary and proportionate. We understand that, as part of that assessment, interaction with the European Convention on Human Rights article 8 — the right to privacy — will be considered. The information-gathering measure is aimed at modernising DFC's information-gathering powers when investigating suspected benefit fraud in order to create a clear legal gateway so that DFC can compel information from a wider range of third parties, while making it more straightforward to respond via a digital platform. Currently, DFC can request information from only a limited number of third parties when progressing investigations of suspected benefit fraud. The aim is to create efficiencies for both DFC and third parties, helping prove or disprove quickly allegations of fraud. The debt recovery measure is aimed at improving fairness in the recovery of debts that are owed to DFC. It will broaden our debt recovery powers to enable more effective and fairer recovery of debt from those who can repay but currently do not, thus bringing DFC's debt recovery powers broadly in line with those of HMRC. It will allow for money that is owed to DFC to be recovered from an individual's bank account by issuing a direct deduction order to their bank for a regular or lump sum deduction. That will apply where individuals are not on benefits or in PAYE employment, and those direct recoveries will happen only once affordability and vulnerability checks have been carried out. DFC's priority is to negotiate affordable and sustainable repayment plans. We would use the new enforcement powers only as a last resort, where repeated attempts to negotiate a voluntary, affordable and sustainable repayment plan had failed.

The search and seizure measure in the Bill will apply when there are reasonable grounds that will allow a DFC-authorised investigator to apply to a court for warrants to enter premises and search for and seize items that are relevant to the suspected offence. They will apply only to investigations of the most serious cases of organised fraud against the social security system. Again, the measure will give DFC powers similar to those of HMRC to investigate serious and organised crime against government. Currently, DFC investigators must request that the police conduct such activities and can act only in an advisory capacity when attending premises searches with the police. It is considered that that position creates inefficiency and that it burdens the police unnecessarily. It is important, however, to note that police will continue to carry out arrests of suspects.

Finally, the administrative penalties measure will remove the four-week loss of benefit, which is a further financial penalty that is currently applied when someone who remains eligible for benefits accepts an administrative penalty. It is considered that that will introduce greater fairness and proportionality to our response to fraud. The measure will also broaden the types of DFC payments for which an administrative penalty can be offered as an alternative to prosecution following a full investigation. That is seen as a future-proofing move to align the Department's scope for a response to fraud across benefit and non-benefit payments.

As I said, the PAFER Bill completed its passage through Parliament just this week, on 11 November. It is expected that it will receive Royal Assent by the end of the year. That Bill does not in any way apply to Northern Ireland. A number of technical amendments were made to the Bill during its passage through Parliament. Those were aimed at ensuring that the Bill and its set of critical safeguards operate as effectively as possible. The policy intent, however, remains unchanged from that which is set out in the PAFER Bill that the UK Government introduced.

Officials are aware that Northern Ireland MPs raised two main areas of concern during debate on the Bill in the House of Commons.

The first focused on the eligibility verification measure and whether it was excessive in granting powers to investigate the bank accounts of benefit recipients without reasonable grounds for suspicion. Concern was also raised about how that would impact on landlords and appointees who may be receiving benefit payments on behalf of claimants. Secondly, the point was raised that the Bill did not make sufficient distinction between the treatment of a claimant who has received an overpayment, through either claimant or official error, and that of a claimant who has engaged in deliberate and planned fraudulent activity. That issue was noted around the use of the temporary driving licence disqualification deterrent. Officials will continue to explore possible options to address those concerns as the equivalent Northern Ireland Bill is developed.

The details of how the Westminster Bill will be operationally implemented are still under consideration by DWP. There will be details in codes of practice, which will go out to public consultation. Our intention with the equivalent Northern Ireland Bill is that we also carry out consultation on codes of practice. We will, of course, engage with the Committee and any other interested stakeholders as we go along.

My opening statement was probably a wee bit detailed, but, as I am sure that the Committee appreciates, it is a very complex Bill. Between us, we are now happy to try to answer any questions that members may at this stage.

The Chairperson (Mr Gildernew): OK. Thanks, David. It is very clear, even from your brief outline, that the Westminster Bill is not only complex but extremely intrusive in many ways. There is a huge range of issues involved, and we will get into some of them now. It is fair to say, however, that the Bill garnered significant enough criticism at Westminster. I just want to clarify that what is happening is not like a legislative consent motion (LCM), where there is a requirement to introduce provisions here. Rather, it is a choice by the Department to introduce legislation.

Mr Tarr: It is a choice by the Department, and, ultimately, it will be a choice for the Assembly. I am not going to recite what parity means, as I am sure that members are aware of what it means as much as I am. Our Minister is required to consider whether we maintain parity. Our default position in the Department when DWP makes social security changes is to ask ourselves whether we will make the same changes. That is the stage that we are at, Chair. We are asking whether we will introduce an equivalent Bill for Northern Ireland. Minister Lyons has agreed in principle that such a Bill should be brought forward. We are, however, still looking at some of the policy options. The admission of a Bill on to the legislative programme is a matter for the Executive, because it will be an Executive Bill. Ultimately, however, it is up to the Assembly and this Committee to help shape what is in that Bill and to decide whether it progresses.

The Chairperson (Mr Gildernew): How does the Department plan to resource and oversee the Bill's implementation? What resource do you estimate will be required to implement your proposals?

Ms Julie Nelson (Department for Communities): At the minute, we do not have a exact figure for the resource required. Some of the measures dovetail with existing processes, so we do not see there being a huge resource requirement. Additional resource will be needed at some stage, however. We can do a model to show what it will look like and come back to the Committee at a later stage.

The Chairperson (Mr Gildernew): The Department already struggles to deliver on many of its core requirements. You have said that, in some ways, quite small percentages will be involved in implementing equivalent legislation here.

Given my previous experience as a social worker, I am particularly concerned at the idea of civil servants being empowered to enter premises without the support of the police. I do not understand how that would work on the ground. The resource, training and equipment required would be significant. The police already have the powers, the equipment and the training to do that. You would now be asking a whole range of civil servants to step into that space. Would civil servants even feel comfortable doing so?

Mr Tarr: Those are provisions that we will have to consider as we look at the impact that the legislation would have on Northern Ireland. There are three Parts to the Westminster Bill, and we are focusing on social security. At the moment, we are asking the Cabinet Office and DWP whether we need those provisions in Northern Ireland. The overarching principle would be that, generally, yes, we will replicate them, but, as the Committee knows, parity does not mean that we must do absolutely 100% the same as DWP. If there are particular issues or concerns, not only from Committee members or MLAs more widely but from staff and other stakeholders, about how some of the measures will be introduced to Northern Ireland, we will look at them as the Bill is developed.

We are at a very early stage. There is no Executive agreement yet to the Bill's being introduced. As officials, we are starting to work on it, because we have to. The intent is to try to get the legislation through in this mandate, assuming that the Executive and the Assembly agree to it. There will then be significant opportunities, for the Committee and others, to scrutinise the Bill and shape the policy options in it. I am certainly not dismissing those concerns. We will look to address them as we take the Bill forward.

The Chairperson (Mr Gildernew): OK, but we need to address the concerns. I understand what you are saying, but I am just trying to visualise it. You are saying that civil servants will be able to carry out raids on properties and seize items, is that right? Will they be taking a sledgehammer? How will that work in practice?

Mr Tarr: I am afraid that I do not know that level of detail. The finer detail of exactly how DWP proposes to make use of the powers has not been shared with us yet. I assume that it will be in DWP's codes of practice.

The Chairperson (Mr Gildernew): It feels very unconsidered.

Mr Tarr: I appreciate that.

The Chairperson (Mr Gildernew): I will move on to my final question and then bring in members, because I know that they are keen to ask questions. The Committee knows that official error happens all the time. We have seen several examples of it. In fact, recently, we witnessed the outworking of families travelling abroad and the system then not recognising that they had come back home, because they came back via Dublin. The system will often try to view something as fraud and blame people. How can you therefore be sure that innocent people will not unfairly receive far-reaching sanctions and have, for example, their accounts accessed or their driving licence suspended? We are also very conscious of the tech issues in the Fujitsu and Post Office situation and the nightmare scenario that such issues can create through intruding into people's lives. They can have the most serious impact. Do you not have concerns that those types of errors will be treated as fraud?

Mr Tarr: I do not think that we will ever look to identify official error or customer error as fraud. In many ways, there are two elements to the Bill. One is the enhanced fraud measures, while the other is the debt recovery powers. It is my understanding that the enhanced debt recovery powers would apply when somebody gets an overpayment as a result of official error. Within the social security system, that overpayment is already recoverable. Julie and her team are the ones who do the investigations, but I am confident — Julie can speak to this more — that the Department does not prosecute people for fraud if it is an official error. Investigations are carried out before —.

The Chairperson (Mr Gildernew): Are you saying that such errors never happen, David?

Mr Tarr: I cannot say that, no.

The Chairperson (Mr Gildernew): I do not think that you are saying that, but we have seen examples of that happening.

Mr Tarr: Yes. As officials, we take what measures we can to try to prevent that happening, but I cannot sit here and say that errors do not occur.

The Chairperson (Mr Gildernew): It would concern me if there were an attitude of, "We do not make that mistake".

Mr Tarr: I appreciate that.

Ms K Armstrong: Julie, my question is about operational matters that we may have to consider, so it may be for you. This came up in the previous mandate, but I cannot recall for what reason. We know that there are cases in which there has been an error, a person has been overpaid and the repayment is due, but, when the debt recovery repayment is being considered, it has never been clear to me whether, if that person is also, for instance, paying a fine from the court, that is taken into consideration. The fine is paramount, because, if they do not pay that, they will potentially face imprisonment. Is any consideration being given to that type of situation so that, when it comes to repayments or debt recovery, consideration is given to other liabilities that the person has to meet? Otherwise, they could find themselves imprisoned.

Ms Nelson: Yes. When we are talking with the individual, we will engage with them to see what they can afford to repay, and debts such as credit card debt and fines — things that absolutely must be paid or else people will incur a further charge — will be factored in. We will reduce the repayments back to the Department as much as we can, perhaps down to £5 a week or something like that, to make sure that they can repay. Our aim is to have an affordable and sustainable repayment plan so that the person can continue to repay. We will make it as affordable as possible so that the repayment can be sustained until the debt is repaid. We know that that may take many years if a low amount is repaid each week, but that will at least give the person the opportunity to pay off other, more penalty-incurring debts before the social security debt.

Ms K Armstrong: Thank you for that. We know that the maximum amount of savings that someone can have is £16,000. Sadly, there have been situations in which a person may have a small life insurance policy, a partner has passed on, and the wife or husband then receives a relatively small payment through the policy that takes them above the £16,000 threshold. Is any consideration given to how long the person has had that money in their account? With universal credit, we know that someone can look at what a person's income has been over the consideration period. It could be that, at the time of the previous check, there was nothing, but, at the time of the next check, lo and behold, there is £20,000 in there. That has happened in the past and has resulted in the person's being requested to repay housing benefit, so is any consideration given to that? Is there a review done of the length of time that the person has had the money? Is there a way in which to ensure that, when people receive a lump sum payment, they can notify the Department and explain what it is for so that they do not fall foul of the rules?

Ms Nelson: Yes, we would always encourage people to report a change in circumstances as soon as it occurs. That would be classified if they did not report it, and we would then be going down the fraud route, whereas, if they did report it, that would be taken into account, and the decision maker would factor in how long they have had the money for, whether they have spent it or whether it might be being used to buy a new property, for example. All those things would be taken into account when the decision was being made about whether that impacted on their benefit. I am not sure whether there is a specific length of time that they are allowed to have the capital for. Mark may be able to answer that. I think that it is decided on a case-by-case basis, based on what they plan to do with the money and what they received the money for. It could be an inheritance that is going to be divided among other people, but I do not think there is a specific time limit of, for example, two or three months.

Mr Mark Morrison (Department for Communities): No, it is just if the money is there. It does not matter how long it is there for.

Ms K Armstrong: OK. Finally, what appeal mechanism will there be if a person disagrees with the decision that has been taken? Your paper talks about the appeals process for financial institutions, but will the appeals process be similar to the current one?

Ms Jennifer Gibb (Department for Communities): No, but we will be working with the tribunals on what is in the Bill about appeal rights for customers should they have a problem with debts or with whatever it is that they are being asked to repay.

Ms K Armstrong: I am just thinking of the situation that I heard about, in which a lady received about £20,000 from a life insurance policy. Her and her husband's intention was that the life insurance policy payout was to be for their grandchildren. I do not think that they had expected the husband to pass away so early. She was about to divvy up the money, only to be told, "No, you owe us money back". It is for that type of appeal that I hope that we can see flexibility and consideration shown.

Ms Gibb: It will definitely be a human decision maker who will be in contact with the customer. All of that will be taken into account before a decision is made.

Ms K Armstrong: None of us wants to see fraud occur. I do not know whether this is a case of using a sledgehammer to crack a nut. It is a difficult one, but, to be honest, knowing you as I do, you have a heart, so we will see how it plays out.

Ms Mulholland: I agree with Kellie that your Department has a heart, and you do things so well. My concern is more about the infrastructure within which you have to have that heart. That worries me. I worry that the legislation will reframe poverty administration as a policing issue. There is definitely a lot of concern and worry among families about suspected wrongdoing, and the Child Poverty Action Group was most adamant about that. Doing eligibility checks without suspicion would subject low-income families to surveillance by banks, simply because they claim benefits. There is a concern that people will be put under suspicion and then punished, simply because of the position that they are in. Given the eligibility verification powers and the fact that there is no requirement for evidence, what is being done should be proportionate or be done for a good reason and not just be based on a suspicion. David, will you clarify for us again the process for using eligibility verification powers?

Ms Gibb: I will answer that. An eligibility verification notice will be issued to certain financial institutions. More detail will be in the codes of practice that will be consulted on. The information, which will be as little or as much as we can get from the banks, will require us to look at cases in order to see whether the money is capital, money from working abroad or money from whatever. The notice will go through a system, and people such as appointees and landlords will be removed by that system. It will then go to a human decision maker, who will contact the customer. There are plenty of reasons why somebody could have more than £16,000 in their bank account. For example, they may have received a compensation payment. A decision will therefore be made not just on the information that comes from the banks. It is very much a case of trying to make sure that people receive the right amount of benefit. Nobody wants a customer to get into debt or to accrue debt. It is about trying to stop that happening before it does. There will therefore be as little information as possible getting through.

Ms Mulholland: It sounds as though the process will be quite resource-intensive, with someone raising the issue, someone getting together the paperwork to make an eligibility verification request; someone processing that; and a human decision maker then looking at it. It therefore sounds as though it will be a resource-heavy piece of work. Is that fair to say?

Ms Gibb: DWP will take a "test and learn" approach, and, because we will be coming behind it with our legislation, we will pick up on some of its experience. The process will be brought in in a small way to start off with and then built on as more banks are brought on board. We are in a good position, in that we will be able to learn from DWP in order to establish what sorts of resources will be required.

Ms Mulholland: David, in saying that there will be a consultation, you answered one of my questions, which was about whether there will be any input from experts from Northern Ireland, specifically on the codes of practice.

Mr Tarr: As far as I am concerned, as the director, there will be. Yes, we will consult on the codes of practice.

Ms Mulholland: We have talked about how the Minister is required to consider parity. Will there be any financial repercussions if the Minister does not maintain parity?

Mr Tarr: That is unclear at the moment. If the Assembly were not to pass the Bill or were to pass a significantly changed Bill, with some of the powers in the two pieces of legislation not matching up, we would have to have conversations with DWP, and our colleagues in the Department of Finance would have to have conservations with His Majesty's Treasury. It would then be up to the UK Government to assess whether DFC's not exercising the full range of powers that DWP has available means that there is less debt recovery and less detection of fraud. We have not had any conversations with them about that, because, from our point of view, we are at the very stages of trying to prepare a Bill. Those are conversations that we can have if the Bill progresses. There are precedents, however. Those of you who were here in 2012 and 2015 will know that, because of the delay in introducing welfare reform, Treasury levied penalties back then.

Ms Mulholland: I have another question about something that Julie said about error and fraud. Could people's benefits be stopped as a precaution before you realise that there has in fact been an error and that it is therefore not fraud?

Ms Nelson: They could be stopped as a precaution. If we get information, we will always engage with the customer. We would not, for example, take the raw data and just suspend a benefit. Rather, we would engage with the customer. If the customer, for example, did not interact with us after numerous attempts — it would have to be numerous attempts — their benefit might be suspended. As I said, that would have to happen quite a number of times, however. We would look to speak to the customer in order to clarify what the money was for, why they had received it, what they planned to use it for and how long it had been in their account.

Fraud occurs when there is a deliberate attempt by a person to misrepresent their circumstances. It is much more likely to be a case of customer error, whereby a person did not realise that they needed to tell us about the money or it had accumulated in their bank account without their realising that the £16,000 limit had been exceeded. We have to prove fraud in order to prosecute. There are prosecution thresholds that we have to meet for fraud cases.

Ms Mulholland: There is therefore a process to be followed before benefits are stopped.

Ms Nelson: Absolutely. We have to engage with the customer in the first instance and find out whether they have the money. We have to find out whether they have the money, how long they have had it for and what it is for. We will engage with them to do that. As I said, on the rare occasion that someone does not engage with us after a number of attempts, we may have to suspend the benefit in order to get clarity on what that payment is for, or what it is, but the vast majority of customers engage with us.

Ms Mulholland: Northern Ireland has a much higher proportion of disabled people and people whose benefits are managed by relatives or carers. If we were to replicate the legislation from Great Britain, could it unfairly affect the people who manage benefits for a relative or someone for whom they care? That is not something that GB has to consider as much as we do, because we have a higher proportion of carers, particularly kinship carers.

Ms Gibb: Yes. We will equality screen the provisions, and, if we think that there is a disproportionate impact on customers in Northern Ireland, there could end up being a full equality impact assessment. We will certainly take that into account.

Mr Tarr: There is always the scope, Sian, for the Bill to be amended, or for official steps to be put in place in the Department's guidance or codes of practice. We are very alive to Northern Ireland's having different circumstances to GB. It is not always a case of just copying and pasting from there. One of the reasons why we are here is early engagement. We want to understand. I am not naive enough to think that the Bill is going to be popular.

Ms Mulholland: I am glad to hear that, David. Although I have confidence in the intent of the proposed Bill, its nature does not quite sit right with me.

The Chairperson (Mr Gildernew): It is not a question of its being popular or unpopular; it is about the impact, David. Fraud should not be tolerated by any of us, but, picking up on Sian's questioning, there is a bit of an issue. There can be many different reasons for a lack of response, including literacy, mental health, coercion and control, and connectivity. I wonder what protections are in place, particularly for children. Utility companies, for example, are not empowered to cut off electricity, yet you are talking about cutting off a lifeline for people of very poor means when you still do not know whether there has been fraud or whether there has been an error or whatever. What protections will be in place for children?

Mr Tarr: Jennifer, as the Bill manager, is across more of the detail. My understanding is that that will not make any difference to how we treat those people.

The Chairperson (Mr Gildernew): So, it will not matter whether there are children in the house?

Mr Tarr: No, I am saying that it will not make any difference to how we currently treat them. I am making an assumption — I am not on the operational side — so I will let Julie speak to the issue. We already take every step that we can to ensure that we do not take people's benefits off them unnecessarily. That is not what we are here to do.

The Chairperson (Mr Gildernew): David, I, like the others, accept that that is not the case. We are seeking to prevent unintended consequences —

Mr Tarr: I absolutely understand that.

The Chairperson (Mr Gildernew): — or impacts that are overly intrusive, or, indeed, wrong, if there have been mistakes.

Ms Nelson: Vulnerability will always be taken into account when we look to suspend somebody's benefits. As I said, that is an absolute last resort. There will be many attempts to engage before that. If we engage with a customer through either their UC journal or telephone number and they tell us that they have difficulties with English as their first language or something such as that, we will always put in place something to address that. We will never suspend somebody's benefit if we know that they are vulnerable and that it is their lifeline. We will look to see what else we can do, such as engage an interpreter or something such as that, to address the issues that need to be addressed.

The Chairperson (Mr Gildernew): I fully accept your genuineness, but I have come across a situation in the past number of months in which a home visit did not happen, despite other sections of your Department saying here that, where needed, home visits would be facilitated. The people concerned were very vulnerable. Officials in the Department worked with me to address that very quickly, but the reality is that there was a difference between what we were told in Committee and what transpired on the ground. We have to guard against that when we are considering such measures. I accept what you said, Julie, and I accept that not one of you wants those impacts to happen. We are here to guard against their happening inadvertently.

Mr Tarr: Absolutely, and we are here to work with the Committee to put measures in place to prevent those impacts happening. As I said, however, we are not infallible. I cannot sit here and say that mistakes will not happen.

The Chairperson (Mr Gildernew): Ok, fair enough, David. Thank you.

Mr McHugh: You are all very welcome again. Fraud makes up less than 2% of the total budget. I cannot help but feel that this is case of a sledgehammer being used to crack a nut. I think, too, of the draconian measures in the Bill and how they will impact on other members of a family unit, particularly the clause that disqualifies a person from driving. That measure has caused consternation in Britain. Is it likely to be considered in the North of Ireland too and be an element of the proposed Bill?

Mr Tarr: I believe that our Child Maintenance Service already has the power to do that, but my understanding is that it has never been used. I am sure that Jennifer has the figures, but even in England, Scotland and Wales it is not used significantly. Do you have the figures?

Ms Gibb: Yes, I have the figures somewhere. It is more of a deterrent, and it certainly has not been used in Northern Ireland.

Mr Tarr: We are not aware of it having been used here.

Ms Nelson: I have responsibility for child maintenance as well. It has not been used.

Ms Mulholland: That is good to know.

Ms Nelson: It is an absolute power of last resort, and it will be the same in the proposed Bill.

Mr McHugh: What do you mean when you say that it is "more of a deterrent"?

Mr Tarr: People could be deterred from taking fraudulent action — not reporting a change of circumstances or whatever it may be that leads to the fraud — if they believe that they could lose their driving licence as a result. Can I prove that that is a deterrent? No, I cannot: it is a perceived deterrent.

Mr McHugh: Even in that respect, it is there as a threat. Like everyone else on the Committee, I, too, think that fraud has to be confronted and dealt with. At the same time, on the theme of the proposed Bill being a sledgehammer to crack a nut, how many people in the Department are employed on fraud and error, including those who are dealing with the proposed Bill?

Ms Nelson: We have around 40 fraud investigators. We are at the start of a recruitment campaign, though, so we hope that that number will increase to about 60. The number of staff working on error is more difficult to quantify. There are operational staff in each benefit branch to address official error, for example, learning from errors and making sure that they do not keep reoccurring, so it is much more difficult to put a figure on the number of staff who cover official error. For customer fraud, the figure is 40, which will, hopefully, increase to 60 by the end of the financial year.

Mr Tarr: You asked about the number of staff working on the proposed Bill. Jennifer is the Bill manager, and she leads a team of — five, six?

Ms Gibb: Five.

Mr Tarr: Five people. That team also deals with welfare supplementary payments and welfare mitigation payments, so it is a joint role.

Mr McHugh: Apart from the objective of maintaining parity with Britain, has there been any cost benefit analysis on the work that has been carried out by your Department and the resources that have been deployed to develop the proposed Bill?

Mr Tarr: Not on the resources that have been deployed to develop the proposed Bill. We have not done that yet, and, honestly, I am not sure that we will. When DWP introduces a Bill, the Department's default position is to brief our Minister on it, whomever that may be. Our starting position is to look to develop a Northern Ireland equivalent. That work is picked up by the staff that I have allocated to take forward all work on social security.

Mr McHugh: Yet and all, it is still a focus of the Minister to develop and implement this proposed Bill.

Mr Tarr: I met the Minister to brief him on the GB measures. He has agreed to the proposed Bill in principle and written to his Executive colleagues.

The Chairperson (Mr Gildernew): Are there implications for the block grant if there are changes to parity?

Mr Tarr: I cannot say that there will not be. We have not had those conversations. Generally, where parity has not been maintained on the delivery of benefits — or, in this case, benefit security or debt recovery — we have found that DWP is quite relaxed about it so long as it does not impact on the amount of benefit paid or, in this case, recovered. If Northern Ireland deviates from the DWP position in that regard, that is a conversation that generally has to be had at finance level. We would pass that to our colleagues in DOF to speak to Treasury.

There is no indication that we are not going to maintain parity, nor am I saying that we will. Obviously, we are at the start of the process. If the Committee or our Minister want us to have those conversations, we will start to have them. If we do not know what we are not maintaining parity with, the challenge would be identifying the cost. However, if we — sorry, I keep using the term "we", but I mean the Assembly — decide to pass a different Bill — one that does not include some of the measures that are in the GB Bill — those conversations would have to be had while that Bill is progressing. However, there is certainly the possibility that Treasury would seek to penalise the Department through the block grant.

The Chairperson (Mr Gildernew): Is there any guarantee from Treasury that the moneys recovered would stay here?

Mr Tarr: Would that be part of normal debt recovery? Do you know, Julie?

Ms Nelson: Yes, it is part of normal debt recovery. There is no agreement, to my knowledge.

The Chairperson (Mr Gildernew): It will be a cost rather than an investment, then.

Mr Tarr: There have not been any conversations with Treasury about these measures, but, yes, additional resources will be required to implement them. I assume that the cost for that will be met by the Department.

Ms K Armstrong: Thank you for letting me in again, Chair. One of the issues with parity is whether we do it or let the equivalent Department in Westminster handle it. The paper that we have talks about DWP being given powers. Is part of the conversation that is happening at the moment about whether we do whatever is brought forward in GB, but as part of a different Bill, or whether we use their services and let them do it?

Mr Tarr: At the moment, the proposal is to bring forward our own Bill, which will replicate the GB measures and be delivered solely in Northern Ireland. My understanding is that DWP would not have any involvement in how those measures are applied here. Clearly, access to financial institutions would be required. Many of the financial institutions operate on a UK and all-island basis. We would probably piggyback on the conversations that DWP is having with the major banks in London, and what it has done, but my understanding is that the operational delivery would be wholly with DFC, but Julie can speak more to that.

Ms K Armstrong: It is not a case of simply tagging Northern Ireland onto their legislation.

Mr Tarr: No.

Ms K Armstrong: My concern, when it comes to children, for instance, is that overpayment by DWP is not pleasant to deal with. I have personal experience of that to declare. One Friday afternoon, my husband called me and asked why there was £6,500 in a joint bank account that we had. Three payments had come in from the body that came before DWP — I am that old. We tried to give the money back, and there were three years of constant hassle. I am concerned about overpayments by DWP, because, although you are looking at fraud and error within the Department here, people receive other payments from parts of DWP or HMRC, which need to be considered. Will we have to write into our Bill a consideration of going back to them?

Mr Tarr: I do not believe so. Payments made by HMRC are solely a matter for HMRC. Responsibility for tax credit debts was transferred to DWP and DFC. DWP makes some limited payments on behalf of DFC, effectively acting as an agent for us. The obvious ones are the winter fuel payments and cold weather payments. They are made by DWP on our behalf but under our legislation, as the Committee will know because we refer to you. The recovery powers on those payments sit here: DWP effectively acts as an agent.

Mr Durkan: You have hit on my main question, which was going to be on parity and costs. The precedents of 2012 and 2015 have been cited, but in those instances, there was a direct, obvious and calculable cost of a breach of parity. I am not sure how it would be calculated here if we were still recovering money. Would it be deemed that it was not being recovered at the same rate as elsewhere? Obviously, it would take a while to see if that was a pattern. I am not sure how that would be calculated.

It was said that we are recruiting fraud investigators and that their number is expected to go from 40 to 60. Is that directly related to, or contingent on, the proposed legislation? Were it not for the proposed Bill, would that recruitment process be happening?

Ms Nelson: That recruitment is just to bring us up to our baseline because we have lost so many fraud investigators due to retirement, different job opportunities becoming available and whatever over the past number of years. The recruitment campaign is not linked to this at all.

Mr Durkan: One would imagine that there would need to be further recruitment should the proposed legislation pass.

Ms Nelson: Not necessarily. We would need to model what our staffing requirements would be if it the proposed Bill was passed. It would not necessarily increase: we may just have to reprioritise and do things slightly differently. It is something that we would look to model once we have the detail and know that we are progressing.

Mr Durkan: Obviously, I share the concerns that other members have raised about the Bill's being intrusive and draconian. I think that those were two of the adjectives that were used. Is there much interaction with HMRC? Recently, a couple of people have come to me who have been subject to quite historic or prolonged investigations on employment and support allowance (ESA) claims. Both those people are self-employed and have been declaring everything to HMRC. They have been doing everything above board, or so they thought. yet they are still being accused of fraud. That is where the client error, or what is described as "client error", comes in. When investigations go back that far, often the Department does not have a record of conversations or recordings of phone calls that people claim — I have no reason to doubt them — happened. What is the relationship with HMRC?

Mr Tarr: I do not believe that many, if any, of the proposed Bill's provisions relate directly to HMRC. With the closure of tax credits, I am not aware of any direct interactions on benefits between DFC and HMRC at the moment. I believe that historic tax credit debts have been transferred. Beyond that, I assume that any debts that HMRC is pursuing are related to tax. We do not, to my knowledge, have any direct interaction with HMRC. I stand to be corrected, though. Jennifer might know of some.

Ms Gibb: No.

Mr Durkan: It is not related to HMRC debt, though; it relates to someone's income that has been declared to HMRC, which demonstrates that they were being open and transparent about what they were earning.

Mr Tarr: Apologies. I misunderstood you. I think that Julie wants to answer.

Mr Durkan: Yet, on the other hand the benefits side does not know.

Ms Nelson: There are joint data-sharing agreements between the Department for Work and Pensions and DFC with HMRC. We receive data-sharing outputs that relate to various aspects of HMRC data. That does happen. You gave the example of the ESA customer. Just because someone has disclosed their earnings to HMRC, people assume that we know about them as well. That is not the case. They need to disclose their earnings to both the benefit-paying office and HMRC. If there are specific cases, I am happy to look at them. However, overarching data-sharing agreements are in place with HMRC for specific pensions and income data. In the fraud investigation space, we also have a data-sharing agreement that relates to the specific information that we need on a case-by-case basis.

Mr Durkan: I will not go into the specifics of the individual case now. However, in general, if someone claims to have flagged their earnings with the Department, and there is no record of that at the Department’s end any more — this could have happened five, seven or 10 years ago — their registering of the information with HMRC is almost demonstrative of their good character. Yet they are being accused of fraud.

Mr Allen: I have a couple of questions. I am struck by a lot of the responses to colleagues that a lot of modelling needs to be done and a lot of questions still need to be answered on this. We, obviously, want to have the full position before us. With that in mind, if it is the desire of the Minister to take a Bill forward, when do you envisage being in a position to introduce such a Bill? From a Committee perspective, I have no doubt that many stakeholders will want to feed into the process. That is clear, even from listening to members' questions. Therefore, we will need appropriate time to engage with any Bill.

Ms Gibb: I imagine that it will be April next year at the earliest. Obviously, if the Executive approve it being included in the legislative programme, we will have to engage with the Office of the Legislative Counsel (OLC) to draft the Bill. That would be the very earliest point at which we would introduce it.

Mr Allen: If it is the Executive's desire to go ahead with the Bill in April, do you envisage a lot of the questions that members have posed, and need further answers to, will have been addressed, particularly on the financial consequences, if any, of not maintaining parity? I am interested specifically in the codes of practice and how things will work operationally because, obviously, systems are not always foolproof. For example, how will those eligibility markers work with banks? Will they be automated and what will the verification process be to make sure that the data is correct? I am sure that colleagues will agree that compliance checks cause a great deal of anxiety and stress. Obviously, we need to tackle fraud, but that comes with a great deal of anxiety and stress for the claimant. We need to make sure that that data is correct and that banks have systems in place so that they are able to draw that information out efficiently.

Ms Gibb: DWP hopes to be consulting on the codes of practice quite soon. We will get a lot of information from that and be able to start looking at drafts for our own codes of practice. I cannot guarantee that we will have some of the other information when the Bill is introduced. There are test-and-learn processes that DWP will implement. We will still be learning from those, so I do not know that we will have a full picture by the time that the Bill is being introduced.

Mr Tarr: In anticipation of that, we will be trying to gather as much information as we can. We appreciate that not just the Committee but MLAs in general need the picture before they can make decisions. We understand that. We will be working on that.

Mr Allen: With that in mind, has there been a conversation with GB on whether we can look at how the provisions work there before we begin our process? If the issues that arise in GB have already been ironed out, we will be in a better position to introduce a piece of legislation.

Ms Gibb: Absolutely. We are working very closely with officials in GB, and we will certainly take on board any issues or problems that arise there and reflect that in our Bill.

Mr Allen: I assume that, in most part, the legislation that is introduced here will be a direct lift from the GB legislation.

Ms Gibb: That is the plan at the moment, yes.

The Chairperson (Mr Gildernew): If that is the plan, how will that take account of people who live in the South but have paid into the system here or currently work here and are part of the system? If we just directly lift the provisions, how will the proposed Bill take account of that complexity?

Ms Gibb: As I said, in the most part, it will be a similar Bill to DWP's Bill, but, obviously, we will have to take into account the Northern Ireland position. Therefore, we will have to work with OLC to see what differences we have to put into our Bill. As I said, if we are introducing a parity Bill, it will, in the main, be a direct lift.

Mr Tarr: As a Department, we are at the stage where Jennifer and her team have just finalised the instructions for OLC. As I am sure you are aware, that process empowers them to say what they want in the Bill. We are aware, as I said, that Northern Ireland MPs had concerns. Equally, we are hearing concerns here today. That is the process that we will work through over the next couple of months to feed the instructions to OLC. Hopefully, then, the draft of the Bill that is presented to the Executive, assuming that they are in agreement with it, will have addressed some of the concerns. That is the policy work that my team, led by Jennifer, will be doing over the next few months.

The Chairperson (Mr Gildernew): I want to ask about human rights compliance. There are parties in Britain are talking about withdrawing from the European Convention on Human Rights (ECHR), but it will apply here regardless as a result of the Good Friday Agreement. How will that be taken into consideration?

Ms Gibb: As far as Westminster is concerned, the provisions in the PAFER Bill are compatible with the European Convention on Human Rights. If a Bill for Northern Ireland maintains parity, we expect that it will also comply with the ECHR. Obviously, the Northern Ireland Bill will be issued to the Human Rights Commission for inspection as it progresses.

The Chairperson (Mr Gildernew): What triggers the ability to look at people's bank accounts?

Ms Gibb: A general notice will go to certain banks. They will look at codes for three different benefits — universal credit, employment and support allowance and pension credit — to identify whether claimants are over the capital limits for eligibility for those benefits and whether they have been abroad or taken money out abroad over the time that is normally allowed. Therefore, it is more of a general notice.

The Chairperson (Mr Gildernew): It is a general trawl: people's accounts will be looked at to spot what they are at.

Mr Tarr: In principle, yes.

The Chairperson (Mr Gildernew): OK. I am not surprised that large elements of the Bill have created huge concern across the water, given their scope and scale and the experience that we have in other areas.
There are five of you here, and you are obviously working hard on the proposed Bill. How many other people in the Department are working on it?

Ms Gibb: The other people who are involved are, largely, sitting behind us. This is really the Bill team. There are about six in total working on it and that is their primary role. Julie has her team, and Donna is probably the only person in her project team involved with the proposed Bill at the moment.

Ms Donna Atkinson (Department for Communities): I have one other person to help because we are at such an early stage.

The Chairperson (Mr Gildernew): I appreciate you coming to the Committee today and engaging with us. I also appreciate the information that you sent through. Thank you for your briefing today, David. No doubt, we will see you again in due course.

Mr Tarr: Thank you.