An audit has revealed that over €11.9 million in Covid benefit payments from 2020 to 2022 were improperly issued to ineligible applicants, highlighting significant flaws in the system’s verification process during the pandemic. Labour Minister Yiannis Panayiotou acknowledged these weaknesses, noting that while €4.3 million has been recouped, a staggering €3.3 million remains outstanding amid the vast €1 billion allocated for support schemes.
What were the findings of the audit on Covid benefit payments?
The audit revealed that Covid benefit payments from 2020 to 2022 contained inaccuracies, with over €11.9 million improperly issued to ineligible applicants. Efforts to recover funds are ongoing, with €4.3 million recouped and €3.7 million written off. The challenge is vast, as nearly €1 billion was allocated for support schemes, and some ineligible recipients still hold €3.3 million.
Audit Uncovers Improper Payments
In a recent audit, it has been revealed that the filing and distribution of Covid benefits during the years 2020 through 2022 have been marred by inaccuracies. The Auditor-General’s office has identified a significant gap in the management of Covid benefits, with the exact amount of funds that were inappropriately issued to ineligible applicants remaining uncertain. Concerns have been raised that the actual figure could far exceed the €11.9 million currently accounted for by the government.
During a meeting of the House audit committee, it was discussed how the distribution of Covid benefits and grants—vital support mechanisms during the global health crisis—were handled. The Audit Office had highlighted this in a special report focusing on the actions of the ministry of labour and social insurance over those crucial years. However, even the extension into 2022 did not provide a clear picture of the extent of the misallocated funds.
The Challenges of Verification
Labour Minister Yiannis Panayiotou has openly acknowledged the system’s weaknesses, particularly under the strains of the pandemic, when it came to verifying the eligibility of applicants for Covid-related assistance. Individuals and businesses alike were supposed to be scrutinized before receiving aid, but Panayiotou admitted to a lack of integration between government databases, a factor that impeded the verification process.
Despite these revelations, efforts are ongoing to recover the funds that were incorrectly disbursed. According to the ministry of labour, the total amount due for recovery is estimated at €11.9 million, but this only represents a fraction of the funds they are currently aware of. To date, €4.3 million has been successfully recouped, while appeals by some recipients have led to €3.7 million being written off. The remaining €3.3 million is still outstanding, pending recovery.
The Scale of the Problem
The enormity of the challenge becomes clearer when considering that nearly €1 billion was allocated by the labour ministry through various Covid support schemes. The Audit Office has outlined in their report that a portion of this substantial sum has been paid to those who did not qualify for such assistance. However, due to constraints faced by the agency at the time, they could not determine the full amount that went to ineligible parties. They have urged that steps be taken to recover these funds wherever possible.
This situation is compounded by discrepancies in the distribution of aid. While some businesses reportedly received assistance without meeting the required conditions, others that were directly affected by the pandemic, including individuals who lost their jobs, were left without government support. The Audit Office spokesperson, Marios Petrides, emphasized that numerous beneficiaries received aid that they should not have, yet, on the other side of the spectrum, some deserving cases were overlooked.
Response to the Pandemic
From March 2020 to October 2021, the government initiated several schemes aimed at supporting those hit hardest by the pandemic. These schemes were divided into 20 distinct periods, with the labour ministry handling the application checks during the initial and later phases, while private-sector professionals were contracted for the intervening periods.
The support extended not just to individuals but also to self-employed persons and small-to-medium-sized businesses, reflecting the wide-reaching impact of Covid-19. Amidst the scramble to distribute aid following the first confirmed cases of Covid-19 in Cyprus on March 9, 2020, and the subsequent lockdown from March 24 to April 13, the oversight of eligibility checks was evidently compromised, leading to the current predicament faced by the government.
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What were the findings of the audit on Covid benefit payments?
The audit revealed that from 2020 to 2022, over €11.9 million in Covid benefit payments were improperly issued to ineligible applicants. While €4.3 million has been recouped, there remains €3.3 million outstanding. The audit also raised concerns that the actual amount of misallocated funds could be significantly higher than currently reported.
What challenges were identified in the verification process for Covid benefit payments?
Labour Minister Yiannis Panayiotou acknowledged significant weaknesses in the verification process due to a lack of integration between government databases. This deficiency hindered proper scrutiny of applicant eligibility, resulting in improper payments to individuals and businesses who did not qualify for assistance.
How did the government respond to the pandemic in terms of financial support?
From March 2020 to October 2021, the government initiated various support schemes to assist individuals, self-employed persons, and small-to-medium-sized businesses impacted by the pandemic. These schemes were divided into 20 distinct periods, with the labour ministry overseeing application checks during different phases. However, the urgency to distribute aid during the pandemic led to compromised eligibility checks.
What steps are being taken to recover the improperly issued Covid benefit payments?
Efforts are underway to recoup the improperly disbursed funds, with the ministry of labour estimating that a total of €11.9 million is due for recovery. To date, €4.3 million has been successfully recouped, while €3.7 million has been written off due to appeals. The remaining €3.3 million is still pending recovery, highlighting the ongoing challenges in addressing this financial discrepancy.
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