Part 2—Output 1: Core Department
Performance
Develop strategies to reduce fraud and non-compliance
The Portfolio Department and Human Services agencies work with other agencies to ensure that current activities to address fraud and non-compliance effectively target strategic risks for social, health and welfare payments. The Core Department also explores opportunities to improve the efficiency and effectiveness of existing programs to protect taxpayer funds as part of its service delivery reform agenda.
Build a strategic approach
In 2007–08, the Core Department, with the Department of Finance and Deregulation, established a working group of officials to develop a more strategic approach to managing fraud and non-compliance, including consideration of performance measurement, integration of compliance activity, and strategies to reduce overpayments.
Activities underway
In 2007–08, the Core Department worked with Human Services agencies to ensure the effective implementation of measures from previous Budgets in this area.
A key measure announced in the 2007–08 Budget was the establishment of a data-link between Centrelink and the Department of Immigration and Citizenship (DIAC) as part of the ‘Fraud and compliance—residency eligibility validation system for payments and concessions’ measure. The establishment of this link is directed to reducing debts and overpayments for customers travelling overseas by establishing a real-time link with DIAC.
Human Services agencies use a range of methods to reduce fraud, errors, debts and overpayments, including pilots to test new sources of information. The 2006–07 Budget measure ‘Fraud and compliance—addressing undeclared unearned income’ concerned a pilot to test the feasibility of using ATO annual investment income reports. The reports were used to identify customers who had not previously declared investment income, including shares, bank interest, unit trusts and term deposits. This measure has proved to be a successful data source in identifying incorrect reporting of income to Centrelink. At 31 March 2008, Centrelink had completed 1,196 reviews, generating average savings per review of $3,587.
The ‘Fraud and compliance—assessments to verify income or assets’ measure announced in the 2008–09 Budget provided additional funding to Centrelink of $138 million and is estimated to deliver net savings of $589.2 million over four years.
The measure has two elements. The first element allows for additional reviews by Centrelink when discrepancies are detected through data-matching with the Australian Taxation Office. This element builds on existing data-matching activities and will increase the number of reviews where people have failed to declare, or have under-declared, income or assets to Centrelink. Centrelink expects to conduct an additional 278,000 reviews over four years for this element.
The second element involves building on a data-exchange pilot between Centrelink and the Commonwealth Bank of Australia to allow Centrelink to identify the undisclosed or under-declared financial assets of Centrelink customers. Centrelink will expand this initiative to other major financial institutions, subject to their agreement, over the coming four years. Centrelink expects to conduct an additional 41,500 reviews over four years for this element.
Both elements of this measure will commence on 1 July 2008.