Crackdown on welfare fraud

Thousands of Australian welfare recipients may find themselves the target of the Government’s new bid to wipe out welfare fraud.

As of 1 July, the Government has increased the Department of Human Services’ (DHS) capability to detect, investigate, deter and punish suspected welfare fraud. The initiative also includes improvements to automation of assessment procedures, better targeting of high risk areas and recovery of debts owed by welfare cheats.

Around 800,000 individuals currently receiving unemployment, disability or pension benefits, who are under suspicion of providing misleading information about their incomes, will come under increased scrutiny.

The Government expects to recoup about $1.7 billion from thousands of welfare cheats courtesy of the DHS’s extended fraud detection powers and changes such as:

  • Cease payments to jobseekers who don’t follow the rules and conditions aligned with receiving Centrelink benefits.
  • Welfare recipients will no longer be able to use payments to lease TVs, fridges or other goods under an indefinite or short-term contract of less than four months.
  • Parents earning more than $100,000 (reduced from $150,000) will no longer be eligible for the Family Tax Benefit Part B payment.


It is hoped that the new fraud detection capabilities will strengthen the integrity of Australia’s welfare system to make it more sustainable and provide better support for those who need it most.



Opinion: A fairer system for all

The Government’s effort to reduce the amount of welfare fraud throughout the system is commendable. After all, why should those who don’t follow the rules be allowed to continue to receive welfare benefits?

However, this effort will only be of benefit if the money recovered is then put back into the Treasury’s coffers and used to ensure the protection of pensions and benefits for those who truly need it most.

Anyone who has had experience dealing with Centrelink will surely welcome any improvements to the welfare system. The increase in fraud detection powers is but a small part of what the Government is trying to do to improve the fairness of benefits.

I wonder, however, could similar efforts be applied to chasing down corporate tax fraud and avoidance? Surely tracking down and recouping the money that should be paid to Australia by offending multinationals far outweighs the paltry savings which these DHS initiatives may produce and which would significantly further help the budget out of its precarious state. 

In 2015/16, the Government will spend an estimated $154 billion on welfare – that’s 35 per cent of total Government expenditure. The action being undertaken to reduce welfare fraud is hoped to recoup around $1.7 billion over the next four years (i.e. around 1.1 per cent of total expenditure divided by four years). With an initial investment of $60 million, and who knows how much more further down the track, the return on investment is not exactly flattering. 

It would be interesting to see how much more the Government could prop up our ailing bottom line by applying the same pressure to multinationals. After all, it could be said that these big companies are also enjoying the benefits of Government welfare.

What do you think? Are you happy that the Government is trying to reduce welfare fraud? Will this new crackdown affect you? Do you think the Government’s priorities are wrong and that the big end of town should be targeted first?

Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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