INTERNAL auditors at the Ministry of Labour and Social Security are now probing what is believed to be a scheme used to defraud millions of dollars from the National Insurance Scheme (NIS).

According to Jamaica Observer sources, the fraud has caused the postmaster general to pay out more money than was disbursed through the NIS.

The sources say the auditors are now trying to reconcile the figures as the money paid out is more than twice the amount which should have been paid based on the pension order books issued by the ministry, and could run into hundreds of millions of dollars.

Under the system now in place at the social security ministry, people receiving NIS benefits, who do not enjoy direct deposits to an account, are issued with pension order books with vouchers which they redeem for cash monthly at a post office or financial institution.

But our sources say it appears that the fraudsters have found a way to cheat the system, allowing them to collect much more than the ministry’s accounts show should have been paid out.

The sources were unable to say over what period the fraud was carried out but the inconsistency was discovered recently.

On Monday, in an e-mailed response to questions from the Observer, the ministry confirmed that an investigation is under way but said it was not yet in a position to provide answers.

“The questions submitted relate to a matter that is currently under review, and not yet finalised,” said the ministry.

“However, we can say that a draft report has been received from our internal auditors. It is not prudent to provide a fulsome response based on a draft report, as the draft may be adjusted following further consultation with our technical officers and prior to the final report being submitted.

“Comments on this matter would not be prudent at this time as any conclusions drawn will be based on incomplete findings. Once the final report is received our technical officers will examine the findings to determine the appropriate next steps,” added the ministry.

Pension benefits under the NIS were increased with effect from April 1. The increases ranged from 23 per cent to 76 per cent.

According to the ministry, full-rate pensions were increased by 23 per cent, moving from $3,400 to $4,200 per week.

Three-quarter-rate pensions were increased by 37 per cent, from $2,550 to $3,500 per week.

Pensioners receiving half-rate annuities saw an increase of 76 per cent, moving from $1,700 to $3,000 per week.

Payment of the new rates is scheduled to start this month on a phased basis.

Pensioners who receive their payments by direct deposits are to receive the new rates in mid-June. Payment of any arrears is to be made at the end of June.

Pensioners who are paid by pension order books are to receive the new rates when their new books are due, beginning in July. That means pensioners who are due new books in July 2023 will see the new rates reflected. The first pension order voucher in the new book will reflect the arrears.

Similarly, pensioners whose new pension order books are due in August are to be paid the new rates, with the arrears reflecting on the first voucher in their books.