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Fraud in the Social Security system

On Tuesday 16 September 2015, the Senate authorized a complaint about a multimillion-peso fraud that has damaged the Dominican Social Security System. Fake employees were being paid salaries representing a loss of around RD$100 million a year.

The evidence to support the allegation was presented to the Senate Social Security and Work Committee yesterday by the director of the Social Security Treasury, Henry Sadhala, who revealed that the financial imbalance in the system is around 40% and that the system is on the verge of collapse.

He said that those behind the scam took advantage of weaknesses within the system. Sadhala also wants to modify the system so that it can accept part-time employees. He added that the state has to guarantee health coverage and pensions to part-time workers.

Committee chairman Jose Maria Sosa said that they would provide a full report by next Thursday at the latest. He said drastic measures would be taken to sort out the anomalies.

The Dominican Association of Pension Fund Administrators president, Kirsis Jaquez, made the original complaint some days ago, when she alerted the authorities to the fact that fictitious employees were committing major fraud against the system.

Sosa said that the scammers were linked to supposed workers with salaries between one and two thousand pesos which is below the level needed for part time salaries and because of this the Social Security Board had to guarantee each of them RD$200 which then went into the contributive regime for health and pensions.

In addition, the scammers took up to RD$5,000 from each supposed worker to join the contributive regime and they were then reported as having a salary of between one and two thousand pesos.

As an example, he described a scenario where a supposed employer enrolled in the social security system reporting 2,000 employees with salaries of around RD$1,000 in most cases. As the system cannot cope with such low salaries it then triggered the Social Treasury to consider that each one was in fact four employees which ends up costing the institution RD$4,500 a month.

Source: DR1, Listindiario

Sep 16, 2015

Category: DR News |

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Last updated October 20, 2016 at 7:03 PM
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