Ireland Considers Hiring Private Debt Collection Agencies

The government of the Republic of Ireland is weighing the option of using private debt collection agencies to help recovery money owed to the state.

Ireland’s Minister for Public Expenditure and Reform, Brendan Howlin, said Monday that a decision has not yet been made and that the government could still create a central service to do the recovery work for itself.

The government has identified a need to collect social welfare fraud and overpayments, court fines, unpaid hospital bills, and even taxes.

According to the Irish Independent newspaper, the Department of Social Protection is owed some €340 million in fraud claims or overpayments while Revenue, Ireland’s tax authority, is owed around €1.3 billion.

Howlin’s office has commissioned a project to examine the potential for using private debt collectors to go after the funds.

If Ireland follows through on hiring private collectors, it would join the United Kingdom which has been using third party collection agencies to recover tax debt since 2009 and recently expanded the program.

The UK private debt collection pilot launched the same year the U.S. equivalent IRS killed its private debt collection program. The move has been questioned, with the Government Accountability Office (GAO) issuing a report the following year revealing that the IRS may have used flawed study methodology when it decided to stop outsourcing some delinquent tax collection work to private debt collection agencies.