Taxation of Child Benefit - IT Systems limitation?

Zamboni

Leaving the rights and wrongs of this debate aside for a moment, I recently heard Joan Burton say that whilst this was her preferred approach, it could not be implemented within the Revenue computer systems.
Having worked with a host of financial systems over the years, I fail to see why a system cannot be upgraded, amended, replaced if specific functions are not available.
Does anyone have any information on the system in question and the limitation involved to what appears to be a fairly simple function?
And is there a cost/benefit reason why this could not be rectified?

If this belongs in taxation or tech please move - but it just came up in the context of budget and I thought it would be appropriate if it limits the policies that could be implemented.

Thank you

seamus

"Cannot be done" in I.T. terms usually means that it's too large a change to justify for the return.

Chances are it would require a massive change in Revenue's data model. Since the CB is a welfare payment it is not counted as income for taxation purposes. In order to change this, it would be changed for everyone including those on the dole, which might trigger a taxable liability for them.

There's also the issue that the department who pays the CB doesn't have the facilities in place to deduct the tax at source. And since some people are self-declaring for tax, others are PAYE and others are on the dole, there's no way to determine someone's tax liability on-the-fly. Meaning that everyone in receipt of CB would need to self-declare for tax on their CB, which would be a nightmare for Revenue to handle and enforce.

The actual savings to the government in lopping chunks of tax off CB would be quite small and probably would not justify the cost of putting the systems in place to tax it.

antoobrien

If the Revenue and DSP databases are available on a network (likely) then there's no technical limitation involved.

All that is required is an analytics system. The databases don't need to talk to each other, the data can be dumped into the analytics database (with any appropriate conversions and transformations to ensure that the data is consistent) and run a report off it. Edit: Using this approach means that there would be no need to change the data models in either Revenue or DSP

While such a system would be borderline for a single problem like taxation of CB, if we look at the range of means tests and reporting that's needed by a modern government it makes it a no-brainer. Such a system could be used to cross reference pensioners income to decide what level of benefits are required e.g. medical card (there's a cut off of approx 36k for that right now), or other things like the free travel pass.

It'd also make "banding" of benefits practical.

Zamboni

Every applicant for CB declares their PPS number.

http://www.welfare.ie/EN/Forms/Documents/cb1.pdf

A simple extraction from the Dept of Social Protection of successful applicants and child benefit awarded could be imported into the Revenue Commissioners system as a taxable income.
This covers everyone regardless of dole, self employed or PAYE.
It is simple data extraction and migration into another system with a couple of simple business rules.

seamus

Zamboni wrote: »

A simple extraction from the Dept of Social Protection of successful applicants and child benefit awarded could be imported into the Revenue Commissioners system as a taxable income.
This covers everyone regardless of dole, self employed or PAYE.
It is simple data extraction and migration into another system with a couple of simple business rules.

And then you're retroactivey taxing people on welfare payments received last year and you have to chase them for it. The majority of people pay through the PAYE system and make no self-declaration at the end of the year, so this kind of thing would be quite a monumental shift psychologically.
You could of course reduce someone's CB payments in line with their taxable liability for the previous year, but that's adding more complexity into the system.

Again, it's not impossible but when it comes to taxation things are rarely simple, as you would know from looking at financial systems. It's a cost:benefit weigh up.

None of it really addresses the fundamental problem with taxing CB in that you're taking tax off someone, then giving it back to them in the form of a welfare payment, then you're taxing them again.
A sane system would simply reduce the amount of tax you take at step 1 and remove the complexity.

Zamboni

seamus wrote: »

And then you're retroactivey taxing people on welfare payments received last year and you have to chase them for it. The majority of people pay through the PAYE system and make no self-declaration at the end of the year, so this kind of thing would be quite a monumental shift psychologically.
You could of course reduce someone's CB payments in line with their taxable liability for the previous year, but that's adding more complexity into the system.

There is no self-declaration required. The info would already have been transferred from the DSP into the RC.
No chasing required. Just reduce the tax credits in the next year accordingly as can be dome with any outstanding tax liability (within reason).

seamus wrote: »

None of it really addresses the fundamental problem with taxing CB in that you're taking tax off someone, then giving it back to them in the form of a welfare payment, then you're taxing them again.
A sane system would simply reduce the amount of tax you take at step 1 and remove the complexity.

Hey I didn't say the concept wasn't stupid
My point is, it is a sad state of affairs if we don't have the IT expertise and/or systems to implement policies (regardless of fairness/intelligence) and to adapt and evolve.

Sleepy

Or scrap child benefit entirely, increase the welfare rates for dependent children and create a tax credit for dependent children.

Even if you left the rates the same, the costs of administering the payments should be considerable (although Croke Park would prohibit the redundant staff being let go).

If the cost is in adjusting the tech, adjust the process.

edanto

It's embarrassing for the country that we don't have the technical expertise in government/civil service to carry this out.

Sleepy

edanto wrote: »

It's embarrassing for the country that we don't have the technical expertise in government/civil service to carry this out.

You're missing seamus's point. The expertise is undoubtedly there, the problem is that the costs of such a project between two large organisations would outweigh the benefits.

kippy

Sleepy wrote: »

Or scrap child benefit entirely, increase the welfare rates for dependent children and create a tax credit for dependent children.

Even if you left the rates the same, the costs of administering the payments should be considerable (although Croke Park would prohibit the redundant staff being let go).

If the cost is in adjusting the tech, adjust the process.

Totally agree with the two options described.....definitely the way to implement "child benefit".

antoobrien

Sleepy wrote: »

You're missing seamus's point. The expertise is undoubtedly there, the problem is that the costs of such a project between two large organisations would outweigh the benefits.

An analytics system can be bought (hardware, software, consulting etc) for less than 20m - and it wouldn't be limited to just CB - so it's not like doing it would be prohibitively expensive.

I'm convinced that an analytics system would pay for itself in cost savings in the first full year of operation.

frankosw

Sleepy wrote: »

Even if you left the rates the same, the costs of administering the payments should be considerable (although Croke Park would prohibit the redundant staff being let go).

If the cost is in adjusting the tech, adjust the process.

:rolleyes:

Change the record...please.

kippy

frankosw wrote: »

:rolleyes:

Change the record...please.

What he is saying isn't incorrect....or have you other experiences?

frankosw

kippy wrote: »

What he is saying isn't incorrect....or have you other experiences?

Of course i have..he works in IT...he naturally thinks that technology is all thats needed to run state departments and that everybody the computers "replace" should be fired.

I work in teh PS and i've yet to see one area anywhere in my department where a computer has negated the need to have a person operating it.

We dont all sit at our desks writing notes with a quill in the medieval fashion and most departments are down to the bones with staffing anyway...

srsly78

frankosw wrote: »

Of course i have..he works in IT...he naturally thinks that technology is all thats needed to run state departments and that everybody the computers "replace" should be fired.

I work in teh PS and i've yet to see one area anywhere in my department where a computer has negated the need to have a person operating it.

We dont all sit at our desks writing notes with a quill in the medieval fashion and most departments are down to the bones with staffing anyway...

That's because you need the unions permission before you can use any new gear tho right? Gonna need extra training, along with a bonus too ofc.

kippy

frankosw wrote: »

Of course i have..he works in IT...he naturally thinks that technology is all thats needed to run state departments and that everybody the computers "replace" should be fired.

I work in teh PS and i've yet to see one area anywhere in my department where a computer has negated the need to have a person operating it.

We dont all sit at our desks writing notes with a quill in the medieval fashion and most departments are down to the bones with staffing anyway...

That's not what he said.
He said, very obviously, that it should child benefit should be added as a tax credit for those at work via revenue, or as an additional payment via the welfare system, doing away with a child benefit "system" altogther. (increase the welfare rates for dependent children and create a tax credit for dependent children.)
Nothing really IT related in that, just modifying some revenue/welfare rates etc.

Of course, a computer generally needs a person to operate it and if that is your concept of "IT" in the public sector you are sorely wrong.
Do you not think that "IT" in all it's guises hasnt done away with a large portion of the more mundane/repetitive tasks and has scope to do away with far more if planned, designed and implemented correctly? Has it not allowed a more efficient sector?

K-9

frankosw wrote: »

Of course i have..he works in IT...he naturally thinks that technology is all thats needed to run state departments and that everybody the computers "replace" should be fired.

I work in teh PS and i've yet to see one area anywhere in my department where a computer has negated the need to have a person operating it.

We dont all sit at our desks writing notes with a quill in the medieval fashion and most departments are down to the bones with staffing anyway...

srsly78 wrote: »

That's because you need the unions permission before you can use any new gear tho right? Gonna need extra training, along with a bonus too ofc.

Enough with the Public Sector warfare, this thread will not become another battleground for the same ould crap. Contribute to the valid discussion that other people can civilly have or don't bother posting.

ardmacha

I do not believe this excuse of the inability of the Revenue computers, Revenue IT is relatively efficient, whatever about Welfare. I think the obstacles are political.

srsly78

ardmacha wrote: »

I do not believe this excuse of the inability of the Revenue computers, Revenue IT is relatively efficient, whatever about Welfare. I think the obstacles are political.

We aren't allowed to talk about the real reasons, as per moderator warning.

Jaysoose

ardmacha wrote: »

I do not believe this excuse of the inability of the Revenue computers, Revenue IT is relatively efficient, whatever about Welfare. I think the obstacles are political.

The obstacles cant simply just be technical or financial, at the end of the day ireland is a relatively small country with a finite amount of information to be collected from the various departments.

I worked briefly on a fixed term IT contract within the PS and the sharing of information between departments was most definitely frowned upon.

Other posters have alluded to the fact that there will be a lot of common information on the DB's in different departments that can quite easily be cross-referenced.

Interestingly the lion share of the IT work was done by contractors and the Public servants themselves did not have the skills required so i also would think a project of this size would be very costly as it would have to outsourced then the staff within trained to a certain standard to operate.

Sleepy

frankosw wrote: »

:rolleyes:

Change the record...please.

What else would you call staff whose job would no longer exist thanks to a change in the system but redundant?

frankosw wrote: »

Of course i have..he works in IT...he naturally thinks that technology is all thats needed to run state departments and that everybody the computers "replace" should be fired.

I work in teh PS and i've yet to see one area anywhere in my department where a computer has negated the need to have a person operating it.

We dont all sit at our desks writing notes with a quill in the medieval fashion and most departments are down to the bones with staffing anyway...

No new technology would be required for what I suggested. It'd be a matter of increasing one already existing rate on the welfare system and adding a new credit to the Revenue's system. There's no IT work involved in what I suggested at all, it's a rationalisation of existing mechanisms.

For the sake of argument (and realism in the light of the Croke Park deal), let's agree that those staff who currently manage and administrate child benefit wouldn't be made redundant by such a change. Do you still see it as a bad thing? There'd be less work for the Dept of Social Protection (arguably the most overladed depts of the lot at the moment), a proportionally smaller increase in work for the Revenue staff (since ROS automates a lot of the admin of tax credits) and even lower stationary costs in that less forms and paperwork would be needed than the current system.

What I'm proposing would be an efficiency gain. In a commercially aware organisation, it would lead to redundancies as an entire role would be removed and those currently in those roles may not be the ideal candidates (or of an appropriate pay grade) to be moved into gaps elsewhere in the organisation. We can disagree on whether the latter is a good/bad thing without disagreeing that the efficiency is worthwhile pursuing in it's own right surely?

RobbieTheRobber

Im trying to find out what minister burton said about this.

Back in October she was quoted as saying http://www.irishtimes.com/newspaper/ireland/2012/1020/1224325506777.html

“Another way of approaching it would be to tax higher earners in respect of their child benefit. That’s not possible in terms of our system at the moment, but I think it’s something that can be worked on.”

Im wondering if it is just IT systems she is refering to or if there might need to be legislative changes to allow the sharing of information about child benefit recipients with Revenue.

Section 2 of the data protection act states
http://www.dataprotection.ie/viewdoc.asp?DocID=796#2

(i) shall have been obtained only for one or more specified, explicit and legitimate
purposes,
(ii) shall not be further processed in a manner incompatible with that purpose or those
purposes

So if information collected by revenue for the payment of the child benefit never stated it would also be used for tax collection purposes. It might exclude its use in that way.

srsly78

I seem to remember reading recently about some data protection exemption that applies to the revenue commissioners for exactly this purpose, anyone got better info?

RobbieTheRobber

srsly78 wrote: »

I seem to remember reading recently about some data protection exemption that applies to the revenue commissioners for exactly this purpose, anyone got better info?

There is the Social Welfare Consolidation Act 2005 but not being a solicitor Im not sure of its relevance to Child benefit

http://www.irishstatutebook.ie/2005/en/act/pub/0026/print.html

This section I think relates to sharing info for social welfare purposes
http://www.irishstatutebook.ie/2005/en/act/pub/0026/sec0261.html

Sleepy

This morning on Newstalk Colm Keaveney TD made a comment about Revenue not having the IT resources available to embark on such a project at the same time as bringing in the Property Tax and said that additional resources couldn't be made available thanks to the embargo.

Stheno

Sleepy wrote: »

Or scrap child benefit entirely, increase the welfare rates for dependent children and create a tax credit for dependent children.

Even if you left the rates the same, the costs of administering the payments should be considerable (although Croke Park would prohibit the redundant staff being let go).

If the cost is in adjusting the tech, adjust the process.

This sounds the most practical and cost effective way to approach this in my opinion, it shouldn't take a massive amount of work

Zamboni

Stheno wrote: »

This sounds the most practical and cost effective way to approach this in my opinion, it shouldn't take a massive amount of work

Ah it's a great idea.
We can effectively close the entire Child Benefit Section in Letterkenny in Co Donegal and have large savings on a reduced labour force.
Oh wait...

Sleepy

I fail to see the problem? Unless you believe we should be employing people in Donegal regardless of whether they actually deliver anything for their salaries?

frankosw

Sleepy wrote: »

I fail to see the problem? Unless you believe we should be employing people in Donegal regardless of whether they actually deliver anything for their salaries?

Donegal has people living there who avail of public services....do you have any links supporting the idea that public servants there dont deserve to be paid?

Sleepy

And wouldn't those citizens be better served by Donegal based public servants doing something other than administrating an unnecessary benefit?

Do you even think about what's being discussed? Or do you just look for anything that can be construed as a sleight? I presume by the fact you're still alive to post here that you don't do similar when out in public?

kippy

frankosw wrote: »

Donegal has people living there who avail of public services....do you have any links supporting the idea that public servants there dont deserve to be paid?

You've missed the point completely, haven't you?

There are a significant number of public sector workers up there processing child benefit claims and who are responsible for paying it.
If this "area" is moved into Revenue/DSP then they won't have anything to do anymore (not in the child benefit area anyway).
In theory their roles no longer exist so they either get made redundant or "redeployed".
Its not about them getting paid or not.

Zamboni

Sleepy wrote: »

I fail to see the problem? Unless you believe we should be employing people in Donegal regardless of whether they actually deliver anything for their salaries?

Not at all.
You must have missed my sarcastic tone...

Sleepy

Sorry, I clearly did!

mathepac

frankosw wrote: »

... We dont all sit at our desks writing notes with a quill in the medieval fashion and most departments are down to the bones with staffing anyway...

Strange you should mention that. NZ has a similar population to ours, around 4.5M, and has less than 50,000 employees in its PS; we have in excess of 230,000. For what purpose?

Anyhoo back on topic, many moons ago the payment of disability benefit and the taxation of it was shifted to private sector payroll systems. Simply include a new line item on the tax credit certificates electronic feeds representing child benefit entitlements and bingo, all the work is done at minimal cost to the state for those in employment.

The time and expense I have just saved the State can now be used to figure out where to send the 180/190 thousand PSs we don't need and to figure out how we tax the unemployed, the aged and other social welfare recipients.

ardmacha

Strange you should mention that. NZ has a similar population to ours, around 4.5M, and has less than 50,000 employees in its PS; we have in excess of 230,000. For what purpose?

This figure smells of bovine waste. You need 40000+ for education, as one fifth of citizens are in education and someone to teach them is needed for every 25 or so. You need 10,000+ policemen and prision guards etc to have any sort of 24/7 coverage. That's over 50000 straight away.

frankosw

mathepac wrote: »

Strange you should mention that. NZ has a similar population to ours, around 4.5M, and has less than 50,000 employees in its PS; we have in excess of 230,000. For what purpose?

.

We're a quarter the size with the same population and roughly 4 times as densely populated...this would tend to imply more people in cities,larger population areas and MORE NEED FOR PUBLIC SERVICES.

southsiderosie

MOD NOTE:

Given that this is a thread about the relationship between state benefits and IT, it would be helpful if people are going to make comments about how other countries manage this to have some links showing figures on staff and/or IT systems.

That said, we are all tired of pro/anti public service soapboxing and we've issued more than enough warnings at this point, so if you can't restrain yourself, prepare to get banned.

K-9

kippy wrote: »

You've missed the point completely, haven't you?

There are a significant number of public sector workers up there processing child benefit claims and who are responsible for paying it.
If this "area" is moved into Revenue/DSP then they won't have anything to do anymore (not in the child benefit area anyway).
In theory their roles no longer exist so they either get made redundant or "redeployed".
Its not about them getting paid or not.

Well the Government announced further cuts to public sector numbers today so hypothetically they'd be included in those redundancies, or transferred to Revenue to help out.

mada999

I'm sure such as system could be implemented. Usually for a project of this size and complexity, a company/ or govt would usually outsource the work to a consultancy company who are well equipped to deal with a project of this magnitude (after requesting tenders from various sources).

But the last time this was tried - ie the PPARS project, it fell on it's ass and cost over €220 million euro.

http://www.independent.ie/national-news/ppars-fiasco-as-costs-hit-220m-1891230.html


someone asked for data from other companies... see a 2009 research document about the UK publick sector IT analysis... seems very expensive...

UK Public Sector IT Analysis - CTPR

EXISTING MAJOR PROJECTS
There are a varied and widespread number of IT projects and systems in
planning, development, deployment and operation across the entirety of the
public sector. No single definitive list exists, but in terms of understanding some
of the more significant IT-related major projects currently in progress, they
include:
 the Department for Health is driving one of the most ambitious UK IT-related projects, namely the National Programme for IT (NPfIT), with
an estimated overall cost in excess of £12bn. A core part of the
development is a single, centrally-mandated electronic care record for
patients. Other deliverables include an electronic prescription system,
an electronic appointments booking system (known as “choose and
book”), a picture archiving and communications system and a central
email and directory service.
 the Home Office and Identity and Passport Service (IPS) have a variety
of IT-related projects in hand, including the National Policing
Improvement Agency for intelligence sharing, the £1bn+ e-borders
programme, the £234m National Offender Management Information
System (rolling out IT to all prisons) and the Identity Cards
programme (estimated costs for which vary widely between £5bn and
around £18bn)
UK Public Sector IT, October 2009




18
 HMRC is working on a series of improvement programmes with a
budget reported to be around £2.7bn
16
, including the Modernising
PAYE Processes for Customers (MPCC) aimed at improving the PAYE
process and ensuring that employees are paying the right amount of
tax. Other programmes include the Tax Credits Transformation
Programme to reduce the high number of costly errors, running into
billions of pounds of waste, that have previously occurred with the tax
credits system.
 the DWP is undertaking a series of major programmes involving IT,
including a £178m Central Payments System to both reduce
dependency on older systems and reduce fraud. This is the third time
that DWP has undertaken such a project. It is also busy seeking
successors to the current systems integrators‟ contracts with BT and
EDS (now part of HP) through a series of structured work packages
aimed at supporting around 140,000 PCs and laptops. Overall, DWP
has committed nearly £2.5bn to IT-related programmes, with other
projects, such as the £598m pensions transformation programme and
a £246m change programme, forming key parts of this.
 the MoD continues with its Defence Information Infrastructure (DII)
programme, with some £2bn to £3bn already committed and
potentially around a £7bn overall cost to standardise on commodity,
commercial off the shelf products across all three armed services and
in the process the replacement of over 300 bespoke systems. It is also
busy with Bowman, a tactical communications system, and a
programme of whole fleet management.
 the Foreign and Commonwealth Office (FCO) is busy with its Firecrest
project, budgeted at around £401m and due to deliver a modernised
desktop and support environment by early 2012.
 the Department for Children, Schools and Families (DCSF) is
developing the £224m ContactPoint database of all children in the UK,
which will also incur annual running costs of some £44m.

http://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCoQFjAA&url=http%3A%2F%2Fctpr.org%2Fwp-content%2Fuploads%2F2010%2F07%2FCTPR-Memo-No-1-UK-Public-Sector-IT.pdf&ei=H7O_UMmgLoO2hAfor4HQBw&usg=AFQjCNHdVTnA9EjttN4s1EXsfj1Faxz0Vw&cad=rja

BostonB

Zamboni wrote: »

...Having worked with a host of financial systems over the years, I fail to see why a system cannot be upgraded, amended, replaced if specific functions are not available.
Does anyone have any information on the system in question and the limitation involved to what appears to be a fairly simple function?
And is there a cost/benefit reason why this could not be rectified?...

I have no direct experience of CS and this dept. None. So this is simply my thinking of it, from an IT POV.

In the private sector IT often dictates change, or someone senior enough can override all others to dictate something just get done. Excluding any union issues, in the PS/CS IT projects are often run by committee. Which is an entirely different process. IT maybe dictated to by disparate business units, with conflicting priorities and resources. I expect this is a project they they'd like to do, but don't have the resources at the moment in the business process or the IT side. Or it hasn't been given priority, yet.