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30% of Centrelink payments wrong.

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Kelvin Thomson MP

Shadow Minister for Public Accountability Shadow Minister for Human Services

Thursday, 22 June 2006

30% of Centrelink payments wrong

An internal Centrelink survey has revealed that 30% of Centrelink accounts contained an error that resulted in the wrong payment and that a staggering 45% of all customer accounts contained an error.

This means the payments to as many as 2 million of Centrelink’s 6.4 million customers could be wrong. This is gross mismanagement by the Howard Government.

According to the Random Sample Survey (RSS) results for 2004-05, made public in a recent Australian National Audit Office (ANAO) report, of the 10,048 records randomly selected for review: • 45.3% (4552) of records contained at least one error; and

• 29.8% (2990) of records contained an error with a dollar impact.

In the accounts that had an error with a dollar impact (29.8%), the dollar impact either resulted in a debt, a cancellation or a variation of a payment. For those customers that incurred a debt due to an overpayment (the vast majority), the average amount was $1,034.

While these errors could be due to Centrelink administration (22%) or customer error (78%), the Audit Office found that: “there is the potential for Centrelink administrative error to be incorrectly attributed as customer error. This can occur because Centrelink has not

recorded the customer’s previously updated information.” Pg 104.

The report also found that Centrelink incorrectly reported its Payment Correctness to the public through its Annual Report. Centrelink claimed it was correct with 96.8% of payments when it was actually only correct with 70% of payments.

Shadow Minister for Human Services, Kelvin Thomson, said that “this Audit Report has caught out Minister Hockey and caught him out in a big way.”

“These findings are unacceptable, Centrelink’s 6.4 million customers deserve better.

“The buck for Centrelink stops with Minister Hockey. These are his errors and his debt.

“The Government needs to put the resources and the training into Centrelink, and it desperately needs to simplify what has become a hideously complex welfare payments system,” he said.

Report: Assuring Centrelink Payments - The Role of the Random Sample Survey Programme (Audit Report No. 43 2005-2006). Link:!OpenDocument

Attached: Random Sample Survey (RSS) error results for the full year 2004-05 (from Pg 18)

Contact: Patrick Pantano (02) 6277 4632 / 0403 502 071

Random Sample Survey (RSS) error results for the full year 2004-05

(Page 18 of Audit Report No. 43 2005-2006)

Table 1

Type of error Number Percentage

Reviews with no error 5 496 54.7

Reviews with error

Reviews with an error with no dollar impact

1 562 15.5

Reviews with Centrelink administrative error with no dollar impactAB

944 9.4

Reviews with an error with dollar impact

2 990 29.8

Reviews with Centrelink administrative error with dollar impactABC

342 3.4

Total reviews with error 4 552 45.3

Total number of reviews 10 048 100.0

Notes: A) Additional data supplied to the ANAO by Centrelink not included in report from which the remaining results reported in this table were sourced.

B) The number of reviews with a customer error with or without a dollar impact cannot be calculated by subtracting administrative error from the total number of reviews with an error with or without a dollar impact. This is because a review can have multiple errors. Centrelink also advised the ANAO that it could not provide

the break down of reviews with a customer error with and without a dollar impact, without significant additional work.

C) The payment correctness figure of 96.6 per cent discussed in paragraphs 20 to 22 is calculated by subtracting the figure for reviews with Centrelink administrative error with dollar impact (3.4 per cent) from 100 per cent.

Source: Rolling Random Sample Surveys, Final Results Quarter 4 of 2004-2005, including full year, Compliance and Review, Centrelink, February 2006.