The government's welfare Access Card will not prevent benefit crimes, according to a report by the Australian National Audit Office (ANAO).
A report published by the ANAO entitled Proof of Identity for Accessing Centrelink Payments on Wednesday, said that while the identity system used by Centrelink for benefit claims is flawed, there is little evidence to suggest significant wrongdoing.
The Access Card has been touted by government supporters as one method of combating widespread social security fraud.
According to Minister for Human Services Senator Chris Ellison, international accounting firm KPMG estimated that, over a period of 10 years, the Access Card could save taxpayers AU$3 billion.
Ellison said: "The Access Card is being introduced to prevent fraud and improve the delivery of government health benefits, veterans' and social services. It will streamline and modernise the delivery of health and welfare payments, and will significantly reduce fraud."
The ANAO report did not find widespread fraud at Centrelink.
"While the sample results indicate a weakness in Centrelink's control framework for social security payments, the results do not provide evidence of identity fraud among Centrelink's customers or internal fraud by [Centrelink employees]," the ANAO report said.
"The collection and storage on Centrelink's files of insufficient proof of identity (POI) is not necessarily associated with identity fraud. This is because there can be a number of reasons why sufficient POI is not stored on a customer's Centrelink file," it noted.
In 2004-2005, Centrelink recorded AU$41 million of fraud, from the annual figure of roughly AU$63 billion distributed in benefits.
Internal Centrelink documents suggest that a new "tiered" proof of identity system could cut fraud by 75 percent, with or without the introduction of the Access Card. Centrelink's existing proof of identity system is used by other government agencies to help detect fraud, the report added.
However, the ANAO report suggested that are still some failings in the Centrelink system, attributing the flaws to legacy proof of identity systems. The report said such errors can be rectified by measures including staff training, reviewing the error detection process for data entry and ensuring claimants' documentation meets the required standard.