​Commonwealth touts costly Centrelink payments overhaul as easing student struggle

Minister for Human Services Alan Tudge believes the overhaul of Centrelink's payments system will make the 'black hole' welfare application process for students more transparent and save taxpayers money in the process.

The federal government is currently undertaking a project to transform the Department of Human Services' 30-year-old payment system that is currently responsible for processing over AU$100 billion in Centrelink payments annually.

According to Minister for Human Services Alan Tudge, the project, known as the Welfare Payment Infrastructure Transformation (WPIT) program, is the biggest digital transformation the government has embarked on to date.

The project, expected to cost the Australian government at least AU$1 billion, is estimated to take seven years in total to complete.

"Over the next five years, we're going to be progressively building a new system for each one of the major payments to make it simpler, faster, and cheaper to administer," Tudge said.

"We're going from a world today where the system is stifled with unnecessary inefficiency and complexity to a world where there will be progressive transformational change."

Currently, millions of people access Centrelink payments each fortnight, with Tudge noting that in excess of 50 million calls are made to Centrelink call centres every year in relation to payments.

Speaking at the GovInnovate Summit in Canberra on Monday, Tudge explained how WPIT will change the process of a student applying for assistance from the government to highlight the benefits of the costly project.

Currently, a student applying for Youth Allowance or Austudy would fill out a form as their initial step. That claim would then be printed off at the other end of the service centre and re-entered in to a different database. A service centre officer has to physically look at that data, look at what the Australian Taxation Office's (ATO) data said to ensure that the applicant's income eligibility and their parents income eligibility is right, then manually check the university's databases to ensure that the applicant's course load eligibility is also correct.

"On average this would take about five weeks," Tudge said.

"Instead of being able to check online where it is up to, each student had to ring the call centre to talk to an operator and find out. In the meantime, students would continue to call the call centres by their hundreds and thousands -- each time costing several dollars in the process."

Tudge said that from the student's perspective, during this time the claim went into what seemed like a black hole.

He added that at the end of the five-week waiting period, 40 percent of applicants would have their request rejected and 20 percent of that 40 percent would get rejected purely on the basis that their income test was not satisfied correctly or they did not know what their parent's income was.

"Each one of those times that it gets to process costs the taxpayer AU$28," he said. "There are around 98,000 rejections each and every year. That is a lot of money that could be reinvested elsewhere more effectively."

In the "new world", Tudge said, applicants will experience almost straight-through processing and the savings to the taxpayer will also be apparent.

"A student will still be able to apply online, but the data itself will be fully integrated into the ATO's datacentres and will be integrated into the university's course load data as well," the minister explained.

"For most people they will know instantaneously whether or not they are eligible, or they'll certainly know within a very short amount of time."

Moreover, Tudge said that if a student ends up earning more money or their course load changes, their payments will be adjusted automatically.

"This is the future that is being built right now," he said. "A very expensive project which I think will transform the way that we deliver services to the great number of people who are using these services to access welfare payments."

He said the WPIT project will take several years to implement, but reiterated it is a huge transformation that will radically change the way that citizens interact with government.

"It will also mean that government will be more agile and adaptive in meeting the needs of Australians," he said. "No longer will it take months of time and millions of dollars to implement or adjust payments at times of emergency or critical need."

Last month, the government announced it had shortlisted Capgemini -- who was recently blamed for the leak of over 780,000 email addresses belonging to global recruitment firm Michael Page -- and Accenture to provide systems integration services for the overhaul, with the pair of consultancy firms to battle it out for the final rights to the contract.

In a "try before you buy" scenario, Capgemini and Accenture will work with the agency's main software vendor -- expected to be SAP -- to deliver the next tranche involved in the project.

Although not yet awarded, SAP was highlighted by Human Services in August as its preferred tenderer when it went to market to establish a panel of systems integrators to support the WPIT program.

Official discussions with SAP began after the department published a Request for Expressions of Interest (REOI) in September last year to gather suggestions from the IT industry on how to design and begin construction of the new welfare payment system.

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