Compliance and business integrity

The department’s compliance and business integrity systems ensure that only eligible people receive payments and that they receive the right amount.

Where a customer receives money they are not entitled to, they must repay the money. The department actively manages and pursues the recovery of debt.

The department focuses its compliance action on ensuring people receive correct payments, helping them to meet their obligations, identifying potential overpayments and checking discrepancies, and ensuring fair and appropriate debt recovery processes.

In cases of serious and deliberate fraud, the department may prosecute offenders.

Identity management and support

The department plays an important role in confirming and reconfirming the identities of people who receive payments—that is, ensuring that those people are who they say they are. This work is fundamental to the integrity of the welfare system. The department continues to strengthen processes for managing identity checks and making it easier for people to enrol in services in a way that suits them. The department is working closely with the DTA on this.

In 2017–18 the department confirmed the identities of over 700,000 recipients in line with the Department of Home Affairs National Identity Proofing Guidelines. In 2017–18 over 1.5 million identity documents were successfully matched from recipients using the Department of Home Affairs Document Verification Service.

In 2017–18 the department set up a dedicated helpdesk to advise and support people whose identity information has been stolen, lost or compromised.

Supporting targets of scams and identity theft

On 21 May 2018, the department introduced a new helpline for customers to call if they suspect that they have been targeted by a scam and have provided their personal information or had their identity details or documents stolen, lost and misused or potentially misused.

As at 30 June 2018, the department had provided support and advice to 1,317 people through the Scams and Identity Theft Helpline.

Richard was one of them. He had received a phone call from someone who claimed to be from Centrelink. The caller told him he had to pay a $300 penalty for not replying to letters requesting information. Richard was not aware of having received any such letters.

Speaking very quickly, the caller told Richard that his file had been sent to the Canberra office and he would need to buy $300 worth of iTunes cards to cover the penalty. If he did this, his file would be returned to his local Centrelink office. If he did not, his pension would be stopped. Richard gave the caller his full name, address, date of birth and Customer Reference Number, and told him the amount of his last pension payment.

Richard did not know what iTunes cards were, so he asked if he could pay the penalty by cash or credit card. The caller said that that was not possible and harassed him to buy the iTunes cards.

Richard finally agreed. He was told that a Centrelink staff member would call him back for the card codes. He was given a phone number, supposedly for Centrelink’s Canberra office, and told to call if he had any concerns. He was also told he had an appointment at his local Centrelink office the following Monday to discuss the situation. When the scammer called back, Richard told him the codes from the iTunes cards.

Richard was stressed about his situation and felt that something was not right. He called the Scams and Identity Theft Helpline and described what had happened. The helpdesk staff member confirmed that the contact had been a scam and was able to reassure Richard that the scammer had not at that point used his personal information to get access to his records. To reduce the risk of this happening, they added a password and a warning note to his Centrelink record. They also referred him to IDCARE, Australia’s national identity support service, for further practical and emotional support.

Richard’s story is typical of the cases the department hears about through the helpline—a scammer exploiting the stress, self‑doubt and instinct to comply that most people would feel if they had sudden hostile contact from a supposed government official.

The Scams and Identity Threat Helpline number is 1800 941 126.

Helping people to meet their obligations

To improve the accuracy of payments the department undertakes a range of activities and strategies to educate and assist people in meeting their obligations. The department also provides support to those who have mistakenly not met their obligations.

The department also works with people at important life events such as commencing new employment, moving house or commencing studies. This contact from the department helps people to ensure their information is up to date so they receive their correct payment. The department may contact people by calling, writing or sending an SMS.

For example, during the year the department introduced a new rent review and Rent Certificate to make it easier and quicker for customers to update their accommodation circumstances. The intent is to proactively ask Rent Assistance recipients to keep their rent details up to date so they can be correctly assessed for payment and avoid a debt.

Debt management

The department is committed to improving its debt management processes. The department is required under legislation to manage and pursue the recovery of debts and negotiate suitable payment arrangements for customers based on their capacity to repay their debt.

A person can request a review of their debt at any time. If they disagree with the review outcome, they have further appeal rights.

The most common method of repayment for those receiving social welfare payments is through withholdings from their payment. For people who are no longer receiving a payment, the department offers flexible repayment options, including direct debit, BPAY, telephone or internet banking, Australia Post’s Post Billpay service and the Money You Owe online service.

The Money You Owe online service is a convenient and efficient way for people no longer receiving a payment to repay their debt or set up a payment arrangement. Where a person is finding it difficult to repay a debt, the department can organise a payment arrangement suited to their individual circumstances to ensure they are not placed in serious financial hardship.

Departure Prohibition Orders (DPOs) were introduced as part of the current Expand Debt Recovery Measure, which was originally agreed at the Mid‑Year Fiscal and Economic Outlook (MYEFO) 2015–16. DPOs are an additional tool available for use in the recovery of social welfare debts. They are based on a model that has been successfully applied in child support debt recovery. By introducing DPOs, the department has aligned the powers of debt recovery across child support, tax and social welfare debts. A DPO prevents a person with outstanding social welfare debt from leaving Australia where satisfactory arrangements have not been made to repay a debt. DPOs are only issued after considering other methods of recovery and in each case the department takes in‑depth consideration of a person’s circumstances. If the person then pays their debt in full or negotiates a satisfactory payment arrangement, the DPO is lifted.

Debt recovery

When a person is no longer receiving payments and has failed to make or maintain a payment arrangement, the department may:

  • apply an interest charge to the debt
  • use a contracted external collection agent to recover a debt, with commission only paid on the recovered amount
  • garnish wages or income tax refunds, or
  • issue a DPO.

The department also uses investigative and intelligence capabilities to locate people who have large outstanding debts and the capacity to pay them. If necessary, the department may take legal action to recover the amounts owed.

In 2017–18 the department raised 2.49 million social welfare debts to the value of $3.17 billion.

Table 49: Debts raised from people who receive payments
 

2015–16

2016–17

2017–18

Number of debts raised

2,439,431

2,384,911

2,493,474

Amount raised

$2.8 billion

$2.8 billion

$3.2 billion

Table 50: Social welfare debt recovered
 

2015–16

2016–17

2017–18

Total debts recovered

$1.54 billion

$1.64 billion

$1.70 billion

Amount recovered by contracted agents

$144.7 million

$126.1 million

$125.7 million

Total recovered by contracted agents (%)

9.4

7.7

7.4

Taskforce Integrity

Taskforce Integrity is a long‑term initiative to change any localised cultures of non‑compliance and welfare fraud and positively influence people’s behaviour by encouraging self‑correction.

The taskforce, which started in November 2015, is a partnership between the department and the Australian Federal Police (AFP). It draws on capability from across both agencies and is led by a senior AFP officer. The taskforce identifies and targets geographical areas where data analysis and intelligence points to a higher risk of non‑compliance and welfare fraud.

In 2017–18, the taskforce completed 16,221 compliance activities and referred 40 cases to the Commonwealth Director of Public Prosecutions (CDPP).

Public tip‑offs

Effective handling of tip‑offs from the public about potential fraud is a key element in maintaining community confidence in the integrity of payments. The department invests substantial effort in dealing with tip‑offs appropriately. Specialist staff assess all suggestions that someone may be receiving a payment or benefit to which they are not entitled.

People can provide tip‑off information to the department by:

  • reporting via the fraud page on the department’s website
  • phoning the Australian Government Services Fraud Tip‑off Line on 131 524
  • writing to the department at PO Box 7803, Canberra BC ACT 2610.

In 2017–18 the department received more than 33,000 tip‑offs through the Australian Government Services Fraud Tip‑off Line and more than 76,000 tip‑offs from other sources.

Table 51: Public tip‑offs
 

2015–16

2016–17

2017–18

Tip‑offs through the Fraud Tip‑off Line

42,825

38,838

33,123

Tip‑offs from other sources

67,973

75,227

76,181

Payment accuracy and correctness

The department conducts activities to ensure that it consistently pays the right person the right amount through the right program and at the right time.

To monitor how successfully the department is doing this, random sample surveys are conducted to estimate the percentage of people whose payments were free of administrative and processing errors. This measure is known as payment correctness. The department had a target of 95% in 2017–18, and it achieved payment correctness of 98.5%.

DSS uses a similar measure, known as payment accuracy, which factors in errors by both the person receiving payments and the department. It publishes the results in its annual report (see the Department of Social services website).

The department has a thorough system of checks in place to minimise the likelihood of errors.

Compensation payments

The Social Security Act 1991 encourages people to use private financial resources, such as compensation payments, before accessing a social welfare payment. It also ensures that any compensation payments for an injury or illness are considered in the calculation of any social welfare payments.

Under the Act:

  • if a person and/or their partner claims or receives a social security payment, they may be required to take action to obtain compensation when it may be payable
  • the department can recover past payments of social security from arrears payments of periodic compensation payments and lump‑sum compensation payments
  • periodic payments, such as weekly workers’ compensation payments, reduce the rate of social security payments—any excess is treated as income for partners of compensation recipients
  • if a person receives a lump‑sum compensation payment, they will not receive social security payments during the preclusion period.

So that individuals fully understand the effect of a compensation payment on future social welfare payments, the department requests that they discuss the effect of their preclusion period with department staff. This helps them to make informed decisions about their financial situation.

Individuals and their legal representatives can also access an online estimator on the department’s website to estimate the effect of a pending compensation claim.

Potential overpayments

The department uses data matching to identify possible discrepancies in the information that customers provide compared with information held by external sources. The department then examines and investigates the data discrepancies. These data matching processes adhere to the Privacy Act 1988 and are carried out in accordance with the Guidelines on data matching in Australian Government administration issued by the Office of the Australian Information Commissioner.

In 2017–18 external sources used included:

  • Australian Securities and Investments Commission
  • Australian Tax Office
  • Commonwealth Superannuation Corporation
  • Department of Education and Training
  • Department of Jobs and Small Business
  • Department of Health
  • Department of Home Affairs
  • Department of Veterans’ Affairs
  • Defence Housing Australia
  • public and private education providers
  • state and territory departments of corrective services
  • state and territory registrars of births, deaths and marriages
  • state and territory land titles offices.

Clarifying discrepancies

A key component of the department’s work to protect the integrity of the welfare system is the checking of past income for current and former customers.

In line with the government’s budget measures, the department is increasing the number of compliance checks where there is a discrepancy between the income that the customer reported to the department and information held by other parties, such as the ATO. During a compliance check, customers are given an opportunity to explain the discrepancy and have the choice of doing so through an online portal or over the phone though a dedicated number.

During the year the department continued to enhance the online portal and associated compliance letters. The department has done this through extensive user testing and consultation with community and welfare organisations. By taking a user‑centric approach and using plain language, the department has helped customers to better understand the information and requirements in letters.

To deliver the increased number of compliance checks the department has engaged additional resources, including 1000 staff through a labour hire arrangement.

Behavioural insights shaping the design of Income Data Matching Compliance budget measures

Since July 2017, the Behavioural Insights and Engagement team has been working with customers, community and legal organisations, and departmental staff to develop the department’s approach to implementing the government’s Income Data Matching Compliance budget measures.

In particular, the team has initiated face‑to‑face meetings and regular emails and phone calls with many groups that made submissions to the 2016–17 Senate inquiry into the welfare system, to give them an active role in the design process.

With colleagues from the project team and the Chief Citizen Experience Office Division, by the end of May 2018 the Behavioural Insights and Engagement team had conducted more than 230 interviews with Centrelink customers focusing on the standard letters and online processes relating to income data matching. These interviews help project staff get to know the people they are designing for and build empathy and understanding.

From November 2017 to April 2018, the team conducted 70 interviews with customers across six locations in New South Wales, the ACT, Victoria, South Australia and Tasmania.

The interviewees were selected to include significant numbers of:

  • Indigenous Australians
  • multicultural Australians
  • both current and non‑current customers of a variety of payment types
  • people in a range of gender and age groups.

The team also held a series of focus groups in Sydney and Melbourne with current and non‑current customers who have had income as a sole trader or from a business partnership.

The insights gathered from this research about how these groups of customers engage in the online environment and what they think, feel and do when contacted by Centrelink will be fed back into the design and implementation work and inform improvements to the user experience of the department’s compliance, debt management and appeals processes.

Serious non-compliance and fraud

The department’s intelligence capability

In 2017–18 the department conducted a variety of intelligence activities to detect and target potential fraud and serious non‑compliance associated with Social Security and Welfare, Child Support and Health programs. This included:

  • supporting a number of joint taskforce activities
  • testing and implementing new detection programs
  • assessing tip‑offs from the public
  • increasing the department’s well‑established detection capability
  • using data analytics and data mining to improve and refine the department’s detection processes.

The department continued to work closely with a number of other government agencies, including the Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian Criminal Intelligence Commission (ACIC), the CDPP and the AFP, to promote law enforcement.

Fraud investigations

The department investigates fraud and refers appropriate matters to the CDPP for it to consider prosecution. The department’s fraud control processes are deliberately focused on the most serious cases of fraud rather than on people making honest mistakes.

In 2017–18 the department assessed and investigated matters covering a range of risks, including:

  • undisclosed income or assets
  • identity fraud
  • undeclared family relationships
  • residency and absence from Australia
  • study requirements
  • claiming for services not rendered.

In 2017–18 the department completed 3,301 evaluations and 748 investigations of fraud.

Of the investigations completed:

  • 686 related to the department’s Social Security and Welfare Program
  • 56 related to the department’s Health Program.
  • three related to the department’s Child Support Program.

To support the investigation capability in a digital environment, the department enhanced its digital forensics capability through new detection technologies and deploying extra staff. The department also further developed risk profiling capabilities to enhance its ability to address online and identity fraud and prevent incorrect payments in real time.

Internal investigations

The department’s Internal Investigations Section is primarily responsible for leading investigations of potential unauthorised access and internal (administrative, program and information, including customer records) fraud and corruption. This section also works collaboratively with internal and external stakeholders, including:

  • the department’s Workplace Relations Branch on matters of employee misconduct
  • the AFP on matters of criminal investigation
  • the CDPP on briefs of evidence and referrals for consideration of criminal prosecution
  • the department’s Programme Advice and Privacy Branch on matters of unauthorised access and disclosure and eligible data breaches
  • the department’s Cyber Security Branch on matters of data security
  • the department’s Security Branch to ensure that the physical and information security of both customers and staff is maintained.

The Internal Investigations Section undertook a range of investigations, including:

  • unauthorised access to customer information
  • unauthorised access to personal administrative information
  • falsification of documents
  • fraud relating to leave and related entitlements
  • assisting customers inappropriately
  • unsecured external emails
  • dishonestly influencing a public official in the exercise of the official’s duties
  • identity fraud
  • undeclared family relationships
  • fraud by staff who are also customers
  • claiming for services not rendered.

The department’s digital forensics capability utilises the latest forensic technologies and methodologies to support investigations. Real‑time risk profiling capabilities have also been developed to address online and identity fraud and prevent incorrect payments.

Optical surveillance

Optical surveillance involves observing people, vehicles, places or objects. The department continued to use optical surveillance when other types of investigation techniques were unsuccessful and when there was a reasonable suspicion of fraud, serious child support avoidance or income minimisation.

In 2017–18 the department completed 50 matters involving optical surveillance.

Whole‑of‑government engagement to combat crime

To ensure a strong response to fraud and serious non‑compliance, the department continued to work with a number of other government agencies. This included cooperation through:

  • new information‑sharing arrangements
  • combined intelligence activities and investigations
  • engagement with overseas agencies
  • proactive data matching relating to people of interest
  • regular data matching
  • active involvement in taskforces.

Australian Transaction Reports and Analysis Centre

AUSTRAC gives the department access to its records of significant or suspicious financial transactions. AUSTRAC and the department have developed an automated data exchange capability to supplement existing data acquisition and sharing arrangements. This capability increases the department’s access to AUSTRAC intelligence used to detect undisclosed income or target unexplained wealth.

Greater access to AUSTRAC intelligence has strengthened the department’s ability to address serious and systematic misuse of the welfare system.

Australian Criminal Intelligence Commission

The department provides ongoing support to ACIC to address the threat of organised crime. In 2017–18 the department continued to have an officer seconded to ACIC working in the Australian Gangs Intelligence Coordination Centre. As part of this arrangement the department received information and intelligence from ACIC on issues associated with social security and welfare fraud and serious non‑compliance.

Australian Federal Police

The AFP contributes to the department’s fraud control capabilities. During the year, nine seconded federal agents worked in the department to help with investigations, including by preparing and executing search warrants. The federal agents also provide training and advice to departmental investigators and coordinate access to specialist forensic services.

The department collaborates with the AFP on specific joint operations to investigate and disrupt larger scale organised crime against health and welfare programs.

The department is a member of the AFP‑led Fraud and Anti‑Corruption Centre. The centre responds to serious and complex fraud against the Australian Government, corruption by Australian Government employees, foreign bribery, and complex identity crime involving the manufacture and abuse of credentials. One departmental officer is seconded to the centre.

Commonwealth Director of Public Prosecutions

In 2017–18 the department and the CDPP continued to work together to respond to fraud against government programs.

Successful prosecutions are a critical component of the department’s fraud control, prevention and deterrence strategies. The CDPP plays a pivotal role in prosecuting alleged fraud matters that the department has detected and investigated.

During the year both agencies increased their focus on collaboration and innovation, including through mutual training, efficiency, and capability development initiatives.

In 2017–18 the department referred 597 cases to the CDPP. These included:

  • 560 cases related to social security or family assistance payments
  • 35 cases related to Health Program benefits
  • two cases related to Child Support services.

The types of fraud and serious non‑compliance threats that the department addresses continued to shift towards those driven by technological changes or involving unexplained wealth. The department continued to work with the AFP and state police forces on a number of complex organised frauds and online frauds.

Prosecution is not the department’s only response to fraud and serious non‑compliance. Not all cases are suitable for prosecution, particularly where there are evidentiary issues. The department can take a range of administrative actions to complement prosecution activity and tackle cases that cannot be prosecuted.

The department does not set targets for prosecution activity. Instead, the department focuses on tackling fraud and serious non‑compliance threats holistically, quickly and cost‑effectively.

Child support compliance

In 2017–18 the department continued to refine its child support compliance programs. Various activities are used to ensure that assessments for child support are accurate. For example, it requests that the ATO take lodgement enforcement action for mutual customers where those customers have not submitted tax returns and therefore their child support liability cannot be assessed accurately. Any available tax refund can also be used to reduce outstanding child support.

Wherever possible, child support is collected via employer withholding and income support payments to ensure timely and sustainable payments are made.

Where voluntary compliance is not possible, the department will pursue collection. This could include seeking a DPO or pursuing collection from a paying parent through the courts.

Table 52: Child support compliance and enforcement actions
 

Number of actions

Child support collected/corrected $ million

2015–16

2016–17

2017–18

2015–16

2016–17

2017–18

ATO taxable incomes enforcedSee footnote(a)

58,588

65,407

107,049

n/a

n/a

n/a

Tax refund intercept paymentSee footnote(b)

97,679

99,022

108,549

114.6

116.0

127.4

Departure Prohibition OrdersSee footnote(c)

928

1,952

1,572

7.9

9.9

12.5

LitigationSee footnote(d)

184

208

113

6.4

8.1

7.5

  1. To ensure assessments for child support are accurate, the ATO takes lodgement enforcement action for mutual customers.
  2. Tax refund intercepts resulting from actions taken to enforce ATO taxable incomes (lodgement enforcement) are included in this figure.
  3. Departure Prohibition Orders (DPOs) preventing overseas travel are issued to persons who have not made satisfactory arrangements to clear substantial debts. A DPO is a rigorous debt treatment that stops a child support debtor from leaving the country. Due to the success of the program, additional resources were directed to this activity to increase the collection rate of outstanding child support.
  4. When other enforcement options have been unsuccessful and an assets or income stream is identified, the department takes litigation action against parents who repeatedly avoid paying their child support.
Table 53: Employer withholding from wages and salaries
 

2015–16

2016–17

2017–18

Active paying parents with employer withholding payments set upSee footnote(a)

62,702

67,676

69,110

  1. The department may initiate employer withholding for both current liability and child support debt.
Table 54: Deductions from Centrelink and Department of Veterans’ Affairs payments
 

2015–16See footnote(a)

2016–17

2017–18

Amounts collected from Centrelink and DVA paymentsSee footnote(b)

$69.4 million

$67.8 million

$66.8 million

  1. Represents the total amount of deductions from both Centrelink and DVA payments.
  2. These deductions may be made for both current liability and child support debt.

Page last updated: 13 September 2019