Belfast Telegraph

Call for clampdown on crisis loans system as £30m still outstanding

COLIN BREEN

A staggering £30m is outstanding in crisis loan debt in Northern Ireland.

Inquiries into the system by the Belfast Telegraph indicate that fraud is a significant contributing factor to the large sums of money involved.

Questions are now being asked about how the system is being run.

One MLA described the figures as "shocking" while a Department of Social Development committee member said taxpayers are being "bled dry by abusers".

In the past five years £73m has been lent by the Department of Social Development through the crisis loan system.

This averages out at almost £15m pounds a year which indicates a hefty 40% of the total sum remains outstanding.

A further £310,000 was written off completely.

When the interest free loan – which can be obtained on the telephone – is granted to an individual an agreed sum is deducted from their benefit payment to repay it.

When an individual leaves the benefit system there is no way to recover the cash.

A spokesperson for DSD said they would try to contact the individual but if unsuccessful would pass details of the debt to their Debt Centre NI and if they can't make contact they will "consider recovery of the debt through civil proceedings".

Astonishingly, when asked, the department had no figures to indicate that this has ever happened.

The Belfast Telegraph spoke to a number of benefit claimants' who have been in receipt of crisis loans – many of them several times – and all of them had used them as a way of obtaining money for social purposes rather than things that would fall under the "crisis" criteria.

One claimant happily boasted of getting £200 so that he could go to Portrush at the weekend with his mates and he didn't have any money.

The system was regarded by these people, who were in the late teens to late 20s age group, as a "joke" and there to be abused.

Businesses can also get caught up in the scams.

One longstanding trader who owns a carpet outlet said he is approached regularly by people wanting him to give them a bill for carpet.

He said: "They come in and discuss what carpet they say they want and want a bill that says it comes to £700, but want to take £300 worth of carpet and keep the other £400 for themselves.

"I just won't do it, it's wrong but obviously there are others who do and that's why it goes on. I had four in last week alone."

TUV leader Jim Allister said: "The lack of system suggests inadequate verification of need and recovery.

"Consequently the taxpayer is being bled dry by abusers.

"We urgently need to tighten up the arrangement. I will be raising this matter at the next DSD committee meeting."

Alliance MLA Stewart Dickson said he was "highly concerned about the abuse of the loan system and it's not being adequately tested as set out. We need to be able to recoup this money from people leaving the benefits system by having it taken from their earnings."

He continued: "The recipients must be in genuine need and fraudulent claimants must be taken to court.

"These are shocking figures."

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