Don Arthur
Welfare Payment Infrastructure
Transformation—Tranche one
The Government will provide $60.5 million over four years
from 2015–16 for Tranche One of the Department of Human Services’ (DHS’s)
Welfare Payment Infrastructure Transformation (WPIT) program.[1]
In April 2014, the Treasurer, Joe Hockey, said that the Government
had no choice but to replace Centrelink’s information and communication
technology (ICT) system arguing that problems with the system were affecting
the quality of service to customers.[2] According to the budget
papers: ‘Changes to policy and processes over the past three decades have made
the system extremely complex, inflexible, costly to maintain and difficult to
ensure compliance’.[3]
According to DHS, this will be one of the world’s largest
social welfare ICT system transformations. It is designed to:
-
provide customers with faster, more connected and automated digital
services
-
give staff a modern ICT platform that makes it easier for them to
do their jobs and
-
position the Department to meet future policy needs of
government.[4]
The Government expects the WPIT program to be completed in
2022. The work will be completed through multiple work packages with each stage
expected to deliver tangible benefits to customers.[5]
The Treasurer has indicated that the total cost of the project will be in the
billions.[6]
National Welfare Rights Network (NWRN) President, Kate
Beaumont, has welcomed the WPIT program and said it should reduce the
administrative burden on recipients and result in reductions in overpayments
and debt recovery.[7]
DHS’s Income Security Integrated System manages income
support payments and supports Centrelink’s customer service and compliance
activities. The system relies on the Model 204 database management system, a
system the Department of Social Security began using in 1983. At the time,
Model 204 was the only product that could meet the Department’s performance and
capacity requirements.[8]
Even as the number of Model 204 users around the world
declined, Centrelink defended its continued reliance on the system.[9]
In 2009, DHS’s Chief Information Officer, John Wadeson, said Centrelink would
only replace Model 204 if the Government wanted to move to a new welfare system
model.[10]
In February 2015, the final report of the Reference Group on
Welfare Reform (the McClure report) proposed a new income support model and explained
that the Government would not be able to implement the reforms it recommended
without replacing the ICT system.[11]
Strengthening the integrity of
welfare payments
The Budget provides $204.9 million over five years to DHS to
improve its capacity to detect and deter welfare fraud and non-compliance.[12]
Together with improvements in the capacity of other agencies such as the Office
of the Director of Public Prosecutions, the Government expects this investment
to produce net savings of $1.5 billion over four years.[13]
DHS expects to undertake 900,000 additional fraud
investigations and compliance interventions over four years; an increase on
recent years.[14] For example, in 2013–14,
DHS:
-
undertook 869,082 compliance interventions (which included early
interventions, such as reminders to report information) resulting in 77,272
payment reductions and 101,331 debts raised
-
undertook 27,632 reviews as a result of data matching with other
agencies and
-
conducted 3,107 investigations into fraudulent activity and
referred 1,158 cases to the Director of Public Prosecutions (1,071 cases
related to social security or family assistance payments).[15]
In 2010, the Australian
National Audit Office found that around 80 per cent of prosecuted welfare fraud
in Australia related to a failure to declare or an under-declaration of
employment income.[16]
According to DHS, ‘a more streamlined and cost-effective
approach will be used to manage inconsistencies in income tax payment summaries
and income declared to the Department of Human Services during the 2010-2011,
2011-2012 and 2012-2013 financial years.’[17]
NWRN President, Kate Beaumont, argues that many overpayments
are the result of errors rather than fraud: ‘The social security system is so
complex that many people find it difficult to understand the rules and make
errors which can lead to significant levels of overpayment,’ she said.[18]
Beaumont also claims that language such as ‘welfare cops on
the beat’ creates ‘the false impression that social security fraud is rampant’.
As noted above, NWRN has welcomed the Government’s WPIT program as it is likely
to reduce overpayments due to errors.[19]
According to media reports, the Minister for Human Services,
Marise Payne, has announced that the Government plans to appoint a senior
Australian Federal Police office to lead a welfare fraud taskforce. According
to Ms Payne, ‘The taskforce will analyse risk factors to identify geographic
hot spots and lead the associated investigations of fraud and non-compliance.’[20]
[1].
Australian Government, Budget
paper no. 2: budget measures: 2015–16,
p. 117.
[2].
J Hockey (Treasurer), Interview
with Neil Mitchell, 3AW, transcript, 24 April 2104.
[3].
Australian Government, ‘Welfare integrity measures’, Budget
2015: Fairness in tax and benefits.
[4].
Department of Human Services (DHS), ‘Budget
2015–16: Welfare Payment Infrastructure Transformation –Tranche One’, DHS
website.
[5].
M Payne (Minister for Human Services) and S Morrison (Minister for
Social Services), ‘Coalition
IT reboot to drive welfare reform’, media release, 10 April 2015.
[6].
J Hockey, op. cit.
[7].
National Welfare Rights Network, Media
release, Centrelink computer upgrade welcomed, but questions over fraud remain,
media release, 13 May 2015.
[8].
M Payne and S Morrison, op. cit.
[9].
B Woodhead, ‘Architecture
the key to Centrelink ’ s data base’, The Australian Financial Review,
27 September 2005, p. 30.
[10].
R Gedda, ‘Centrelink
ups IT reform, keeps Model 204 “legacy”’, TechWorld, 14 May 2009.
[11].
Reference Group on Welfare Reform, A
new system for better employment and social outcomes: report of the Reference
Group on Welfare Reform to the Minister for Social Services, 2015, p.
150.
[12].
Budget
paper no. 2: budget measures 2015–16,
op. cit., p. 116.
[13].
Australian Government, Fairness in tax and benefits, op. cit.
According to Budget
paper no. 2: budget measures: 2015–16,
the savings over five years will be $1.7 billion.
[14].
DHS, ‘Budget
2015–16: strengthening the integrity of welfare payments’, DHS website.
[15].
DHS, Annual
report 2013–14, DHS, Canberra, 2014, pp. 148–52.
[16].
Australian National Audit Office (ANAO), Centrelink
fraud investigations, Audit report, 10, 2010–11, ANAO, Barton,
ACT, 2010, p. 63.
[17].
DHS, ‘Budget
2015–16: strengthening the integrity of welfare payments’, DHS website.
[18].
National Welfare Rights Network, op. cit.
[19].
National Welfare Rights Network, op. cit.
[20].
S Maiden, ‘AFP
welfare cop to target cheats’, Sunday Tasmanian, 24 May 2015, p. 2.
All online articles accessed May 2015.
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