New figures reveal Services Australia may be failing in its obligations to vulnerable Australians – while simultaneously giving itself top marks for performance.
An audit conducted by the Australian National Audit Office (ANAO) into the accuracy and timeliness of welfare payments has found as many as one in five recipients are being paid incorrectly.
The report also accuses Services Australia, the government agency that runs Centrelink, of failing to pay recipients on time in one in four cases. Centrelink delivers social security payments and services to more than 5 million Australians.
While Services Australia reports that it is paying recipients accurately 98.9 per cent of the time, the ANAO found that number was actually 81.4 per cent.
The Guardian reports that of that figure, the report found 13.5 per cent had been overpayments while 5 per cent represented underpayments to welfare recipients.
Overpayments and underpayments
In the 2021-22 financial year, there was $7.2 billion in overpayments – representing 6 per cent of total payments – while there was $514 million in underpayments.
“The department’s and Services Australia’s processes for monitoring, reporting and continuously improving payment accuracy are partly effective,” the report reads.
“Weaknesses were found in … identifying underlying causes of payment inaccuracies, ensuring data accuracy and completeness, and quality assuring reported results.”
The ANAO found the reason for this discrepancy was due to Services Australia’s unusual method of reporting. The agency removes any incorrect payments that come as a result of the end recipient of the payment. For example, if a recipient failed to update Services Australia about a change in circumstances and an incorrect payment was made, it won’t be counted toward the final incorrect payment figure.
But in a reply to the audit, Services Australia noted it would not be adding recipient-based mistakes to its report of mistakes as it is largely out of its control.
Audit office recommendation
The ANAO wants Services Australia to develop a “reliable and unbiased” performance measurement system, saying it needs to include not just statistics within its control, but also those “within its influence”, such as recipient fraud or mistakes.
There were issues not just with amounts paid to recipients, but also with the timeliness of the payments. The ANAO found Services Australia’s processes for monitoring and improving the timeliness of payments was also only “partly effective”.
“The department’s oversight of payment accuracy and timeliness has not been proactive and strategic,” the report says.
“Assurance arrangements for payment accuracy and timeliness are not sufficiently objective and independent, and shared risks relating to payment accuracy and timeliness are not being managed collaboratively.”
The accuracy of Services Australia’s systems and processes have been under increased scrutiny of late, after the Royal Commission into the Robodebt Scheme fiasco, which found debts had been incorrectly issued to welfare recipients based on flawed internal automated systems.
Services Australia head Hank Jongen offered this explanation in response, claiming Services Australia’s accuracy and timing of payments has been improving (according to their own standards).
“We welcome the Australian National Audit Office’s (ANAO) report on the accuracy and timeliness of welfare payments, he said.
“We’re committed to providing the best possible service to Australians and ensuring they receive the right payment at the right time. As we stated in our response to the ANAO the way we measure our success differs from the methodology used by the ANAO.
“Services Australia uses two measures, administrative correctness (previously called payment correctness), and payment accuracy. These measure different things. Administrative correctness shows how successful we are at getting payments right when customers provide all the correct information, and update us in a timely manner when their circumstances change.
“Services Australia’s administrative correctness has remained steady at 98-99 per cent for the past 10 years. Payment accuracy measures customer reporting errors as well as administrative errors.
“We’ve increased payment accuracy rates over the last two years, with an accuracy rate of 94.03 per cent in FY2022-23, up from 93.26 per cent in FY2020-21. The introduction of pre-filled employer income has been a significant step in improving payment accuracy.”
He says the welfare system is vast and complex, but that they are taking the ANAO recommendations seriously.
“We operate in a highly complex environment, delivering payments that involve the assessment of different eligibility criteria and requiring varying levels of urgency,” he says.
“We take this complexity into account when monitoring payment timeliness and developing new payment timeliness measures. We’re constantly working to improve payment timeliness across all payments.
“We’re committed to working with DSS to ensure our timeliness measures remain relevant and reliable measures of performance.”
Have you ever received the wrong payment? Are you usually paid on time? Let us know in the comments section below.
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