Employers who falsely claim that workers are self-employed contractors will face a ramped up inspection regime as part of a crackdown on social welfare fraud.

Rooting out bogus self-employment is to be the focus of a new unit of social welfare inspectors amid concern the practice is a huge drain on the Social Insurance Fund.

One estimate puts the loss to the State at up to €240m a year.

The increased focus on companies that categorise workers as self-employed contractors, when they should be treated as employees, is a key part of the Government’s compliance and anti-fraud strategy which is being announced today.

Social Protection Minister Regina Doherty will set out the plan, which includes measures to prevent, deter, detect and account for welfare fraud and overpayment.

She said the Government’s strategy – which is to run until 2023 – provides a “clear focus” to its approach in tackling fraud.

False self-employment is said to be of “particular concern”.

The strategy notes significant changes in working patterns and employment practices in recent years, which often entail remote working and less certainty around hours and earnings.

This is said to be a drain on the Social Insurance Fund as well as being a denial of employment rights.

A new unit of inspectors is to be focused solely on investigating instances of bogus self-employment and there is to be an increased number of PRSI and employer inspections.

There has also been an increased focus by Revenue in tackling bogus self-employment.

The Irish Independent previously reported how fines of €50,000 are now commonplace for cases where the practice is proved.

Treating someone as self-employed means there is no employer PRSI of 10.95pc paid on total pay. Where Revenue finds that workers’ employment status is incorrectly classified, it demands backdated employer PRSI be paid by the employer.

The Irish Congress of Trade Unions (ICTU) has estimated that the State could be losing up to €240m a year because of bogus self-employment, which is particularly a problem in the construction industry.

The Government’s anti-fraud strategy will include a media campaign in the new year.

A previous anti-fraud campaign – ‘Welfare Cheats, Cheat Us All’ – was promoted by Taoiseach Leo Varadkar when he was social protection minister in 2017.

The initiative, which encouraged members of the public to report suspected fraud, was a controversial one with critics arguing that it sensationalised the level of abuse of the system taking place.

Under the renewed strategy, members of the public will be encouraged to report cases of suspected fraud through a dedicated hotline, which will continue to be publicised as this is said to be an “important source of information”.

However, it is envisaged that next year’s media campaign will be designed to encourage welfare recipients to notify the department of any changes in their circumstances so they can avoid sanctions or debt.

Ms Doherty said: “I recognise that the vast majority of our customers are genuine and that there are no issues in relation to their claims.”

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