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Tuesday, 17 February 1987
Page: 11

(Question No. 4867)


Mr Blunt asked the Minister for Social Security, upon notice, on 11 November 1986:

(1) Has his attention been drawn to an article in the National Times on 19 October 1986 dealing with social security abuse and accident and workers' compensation.

(2) What action has he taken to ensure this abuse is minimised (a) in response to this report and (b) in each year since 1984.

(3) What communication takes place between his Department and insurance companies to ensure there is no overpayment.

(4) Is this information transfer effective; if so, why does the abuse continue.

(5) If this information transfer is not effective, why has nothing been done to improve the system and what action does he now plan to make it effective.

(6) What action has been taken under the (a) Crimes Act and (b) Social Security Act to recover money overpaid through this form of abuse in each State and Territory, in (i) 1983, (ii) 1984, and (iii) 1985.

(7) What sum of money was (a) overpaid and (b) recovered as a result of action taken under the (i) Crimes Act and (ii) Social Security Act in each State and Territory, in (A) 1983, (B) 1984 and (C) 1985.

(8) What effect did each of the Government's anti-fraud measures have upon this form of social security fraud.

(9) Is there a reluctance to launch a major clean-up for fear of a repeat of the situation which developed in the Greek social security conspiracy case; if so, why.

(10) If there is no reluctance, why have no major prosecutions occurred.


Mr Howe —The answer to the honourable member's question is as follows:

(1) I have seen the article. It refers to fraud perpetrated upon the insurance industry and an estimate that 30% of third party claims in Victoria could involve fraud. It also alleges that in one case an individual involved was also charged with social security fraud.

(2) and (3) Combating fraud in the insurance industry is a matter for those concerned. As far as communication between the Department of Social Security and insurance companies is concerned, such companies were recently invited to provide to the department details of persons in receipt of compensation. According to a report in the ``Daily Mirror'' of 21 October, the Director of the Insurance Council of Australia regarded the request as ``bullying'' and stated that he was unaware of any firm co-operating. The honourable member for Richmond's position on the initiative was revealing-he is quoted as saying that the department was ``going through the back-door to compensate for slack administration''.

In any case in which sickness benefit is payable to a person in receipt of compensation, the amount of sickness benefit otherwise payable is reduced by the amount of compensation received. This information is sought from the insurance company. Again, as a matter of course, where a claim for compensation has been lodged but no amount has been received, the insurance company is notified so that in the event of a lump sum settlement, a recoverable amount of sickness benefit must be remitted to the department before the balance is released to the person awarded the compensation. Similar provisions are to apply to invalid pension, unemployment and special benefit, sheltered employment allowance and rehabilitation allowance as from 1 May 1987.

(4) These procedures are generally effective.

(5) See answer to (2), (3) and (4) above.

(6) The department's statistical system does not allow the separate identification of an overpayment arising from motor vehicle accident or workers' compensation fraud.

(7) The department's overpayment statistics are not segregated into Social Security Act and Crimes Act categories except for the purpose of prosecution details.

Statistics of total overpayments raised and recovered by the Department of Social Security are collected by financial year rather than calendar year. The relevant figures are:

AMOUNTS OVERPAID

1983-84

1984-85

1985-86

$m

$m

$m

N.S.W. ...

26.2

23.9

29.0

Vic. ...

16.2

16.4

18.1

Qld. ...

8.5

7.6

10.2

S.A. ...

5.6

5.4

6.9

W.A. ...

4.2

4.4

6.2

Tas. ...

1.6

1.6

1.6

N.T. ...

1.4

1.0

1.8

AMOUNTS RECOVERED

N.S.W. ...

10.9

12.9

14.5

Vic. ...

9.2

9.8

11.0

Qld. ...

4.5

5.1

6.0

S.A. ...

3.6

4.0

4.6

W.A. ...

2.9

3.2

3.8

Tas. ...

1.0

1.0

1.1

N.T. ...

0.6

0.6

0.9

(8) I would expect the Government's anti-fraud measures to have the same general effect on any instances of this nature as they would on any other type of social security fraud.

(9) No.

(10) As noted in (1) above, the article refers to fraud in the insurance industry. No major instances of insurance fraud involving the Department of Social Security have been detected to date.