These guidelines address the issue of the acceptance, as well as compliance, by beneficiaries and those who pay contributions and taxes.
They aim to cover all the complex risks of EEF, based on a risk management approach and model.
This model is based on “Structure” , made up of a series of recommendations (or definitions), and the “Mechanism” that enables and facilitates the application of this Structure.
The risks are prioritized on the basis of their relevance to the sustainability of social security institutions. These risks go beyond financial considerations to include factors that have an impact on the credibility of the institution and public confidence in the social security system.
This approach addresses rights and obligations related to mobility between social security systems:
- Within a country (for example, linked to changes in employment status);
- Between countries, for mobile workers or beneficiaries.
This model also anticipates the emergence of new risks. In this regard, consideration is given to the evolution of ICT, which provides new tools to detect and prevent EEF (data mining, data matching, beneficiary identification and authentication techniques) yet, at the same time, introduces new sources of risk (the possibility of the large-scale modification of data, diversion of automated financial transactions, electronic identity theft, etc.).
The model is anchored on the following definitions of error, evasion and fraud:
This comprises unintentional mistakes in the application of established rules and the calculation of benefits and contributions. Such errors can be related to defects in information transmission or processing, as well as administrative process failures or the absence of legitimate benefit claims.
Indeed, the complexity of the rules and definitions of benefits and contributions may lead to the non-application of those rules on account of difficulties of understanding and a lack of appropriate communications.
Error is distinguished from evasion and fraud by the lack of awareness of its commission and by intention, whether by the recipient of the information or by the person supplying it or failing to do so.
This comprises actions that increase the level of benefits or reduce the level of contributions by taking advantage of the applicable laws and regulations or gaps in fraud control systems.
In the field of health benefits or in the provision of services to social security systems and their beneficiaries, evasion also covers abuse in the performance of the procedures involved.
Except where evasion results from flaws in the definition of rules from which beneficiaries and contributors benefit, evasion is distinguished from fraud only by the acts being defined as illegal and deliberate.
Evasion becomes an act of fraud when (initially legal) elusion manoeuvres used by the targeted stakeholder become illegal. This challenge is very important for contemporary social security institutions confronted with a global increase in the movement of workers and capital, and where social security protection is based on exclusive territorial solidarity. Evasion is mostly attributed to enterprises.
Fraud comprises intentional acts that breach the rules committed by a beneficiary, a contributor or a service provider, to obtain, for themselves or for a third-party, undue benefits from social security systems.
This includes false declarations where the deliberate nature of these can be demonstrated.
An act of evasion may be recast as fraud when its intentional and illegal nature can be demonstrated.
To counter and reduce such acts and practices, the global approach to risk management includes a set of legal, economic, social and psychological aspects and inducements.
- Legal: In general, to reduce the risk of EEF, the legal framework of a social security institution must be rigorous and up-to-date, particularly as regard the legal authority to address EEF.
- Economic: The phenomena of EEF must be continuously assessed and evaluated using the most rigorous methods possible, despite the difficulties involved in measuring behaviour that is not apparent or overt. Similarly, the results of EEF control policies must be evaluated.
- Social and psychological: The scope of investment and social spending, combined with perception among the population of a high degree of EEF, can reduce public acceptance and compliance. Communicating the risk management strategy and its results should address this dimension. Behavioural insight principles could be developed as a means to reduce EEF, for instance by making compliance-related processes easier to understand and adhere to.