​Human Services to recoup AU$4b with automated welfare overpayment system

Fraudulent or erroneous overpayments are on the department's radar, with its new compliance system pinned to recoup AU$4 billion in welfare debt.

The Department of Human Services (DHS) has implemented an online compliance system that is using automation to help locate funds owed to the Commonwealth.

Approximately AU$4.5 million that has gone awry is being pointed to each day by the online compliance system, allowing DHS to kick off the process to reclaim the funds. Before the new system, only AU$295,000 in missing funds was highlighted every 24 hours.

The system has been in operation since July and is now initiating 20,000 compliance interventions a week -- a jump from 20,000 a year previously. Minister for Human Services Alan Tudge expects the system to carry out 1.7 million compliance interventions within the next three years.

Welfare recipients are required to update Centrelink with changes in their income or personal situation; however in the past, DHS staff had to manually check customer records against data provided by other government agencies such as the Australian Taxation Office to ensure the department was paying recipients correctly. Payment anomalies were previously identified as recoverable after letters were sent and phone calls to welfare recipients were made, which Tudge said took a considerable amount of time.

The new online compliance system automates part of this process, and sees a letter automatically generated that asks people to check and update their details online using myGov when data inconsistencies are detected.

"The government is using technology to quickly identify and inform people when overpayments occur due to a genuine mistake, and to ensure we detect the small number of people who deliberately try to defraud the system," Tudge said. "We are lucky to have a strong social security safety net, but it will only be sustainable if it is targeted and there is integrity in the system."

"Our aim is to ensure that people get what they are entitled to -- no more and no less -- and to crack down hard when people deliberately defraud the system."

Speaking on 2GB on Monday, Tudge explained the magnitude of the project's scope, noting that of the AU$160 billion the department will be paying in welfare this year, it is seeking to recover about AU$4 billion paid as a result of fraud or overpayments.

"I think there are people who fall within three categories: There are those who deliberately set out to defraud the system by not recording their proper income levels; secondly there is a category of people who maybe are just a little bit wilfully blind -- they're not organised enough and maybe they're not thinking too much; and then the third category is those who are maybe just completely inadvertent and thought they were doing the right thing, but maybe missed a payment and therefore at the end of the year there are a couple of hundred bucks which they might owe," he said.

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

According to Tudge, the project, known as the Welfare Payment Infrastructure Transformation (WPIT) program, is the biggest digital transformation the government has embarked on to date and is expected to cost the Australian government at least AU$1 billion.

"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 previously.

"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."

Speaking at the GovInnovate Summit in Canberra in November, Tudge said WPIT will radically change the way that citizens interact with government, in particular, students accessing Youth Allowance or Austudy.

"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."

In October, DHS 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 SAP to deliver the next tranche involved in the project.

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