Part 2: Expense Measures
Human Services
Centrelink — appropriation arrangements
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Department of Education, Employment and Workplace Relations | - | -0.5 | -0.5 | -0.5 | -0.5 |
| Centrelink | - | -2.3 | -2.3 | -2.3 | -2.3 |
| Total | - | -2.7 | -2.7 | -2.7 | -2.8 |
The Government will streamline Centrelink appropriation arrangements resulting in savings of $10.9 million over four years. Centrelink currently receives a substantial portion of its funding through the Departments of Families, Housing, Community Services and Indigenous Affairs, and Education, Employment and Workplace Relations. From 1 July 2009 Centrelink will receive all of its funding directly from the budget and this will reduce the administrative costs and red tape associated with oversighting the interagency processes that form part of the current funding arrangements.
Centrelink — call centre supplementation
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Centrelink | - | 60.0 | 60.5 | - | - |
The Government will provide $120.5 million over two years from 2009‑10 to ensure Centrelink is able to meet demand arising from customers making increased use of call centres, and a trend towards longer and more complex calls. This measure will also support Centrelink's emergency response capability.
Centrelink — maintenance of online service infrastructure
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Centrelink | - | 5.7 | - | - | - |
The Government will provide an additional $5.7 million in 2009‑10 to maintain the information technology infrastructure that delivers Centrelink's online customer services.
Continuation of this additional funding beyond 2009‑10 will be examined as part of broader service delivery improvements being considered by the Department of Human Services.
See also the related expense measure titled Service Delivery Reform — further development of initiatives in the Human Services portfolio.
Child Support Agency — additional funding
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Department of Human Services | - | 64.7 | 47.4 | 54.6 | 56.6 |
| Department of Families, Housing, Community Services and Indigenous Affairs | - | -27.9 | -27.9 | -27.9 | -27.9 |
| Total | - | 36.8 | 19.5 | 26.7 | 28.7 |
The Government will provide the Child Support Agency, part of the Department of Human Services, with an additional $223.2 million over four years to reduce the growth in child support debt and maintain customer service standards, such as telephone response times.
The need for additional funding has resulted from increased work associated with child support reforms which culminated in the application of a new child support formula from 1 July 2008. The number and cost of interactions with clients have proved to be greater than was estimated at the time. Costs have also been incurred as a result of the separation of the Child Support Agency's information technology and corporate services functions from the Australian Taxation Office.
These costs will be partially offset by reduced Family Tax Benefit (FTB) outlays of $111.6 million over four years, resulting in a net cost of $111.6 million over four years. These offsets will occur as the measure will lead to greater child support payments being made and child support payments are taken into account when calculating FTB entitlements.
Child Support Agency — income reconciliation
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Department of Human Services | - | 26.6 | 28.9 | - | - |
| Centrelink | - | - | - | - | - |
| Total | - | 26.6 | 28.9 | - | - |
The Government will provide $85.8 million over three years to enable the Child Support Agency (CSA), part of the Department of Human Services, to complete outstanding reconciliations of estimated parental income against actual income levels.
The outstanding reconciliations have arisen due to the additional work associated with changes introduced in the Child Support Legislation Amendment Act 1998 which had the effect of increasing manual intervention in the reconciliation process. Further outstanding reconciliations have arisen due to CSA system errors.
Where debts between parents are identified, they are legally debts to the Commonwealth and some applications for debt waiver are expected. The Department of Finance and Deregulation will receive funding to examine applications to waive amounts owed to the Commonwealth.
The reconciliations will ensure that child support payments made reflect the capacity of parents to contribute to the cost of their children.
Provision of $30.2 million has already been made in the forward estimates.
Drought assistance — continuation of rural support services
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Centrelink | - | 11.8 | - | - | - |
The Government will provide $11.8 million in 2009‑10 to continue the drought assistance mobile service and rural support services for communities affected by drought. The mobile service involves Centrelink staff travelling to rural communities, with a primary focus on providing better access to services for communities without a Centrelink office. The mobile service also assists people to access other Australian, state and local government services.
This funding also provides for the continuation of work to coordinate services in the Murray‑Darling basin, particularly in the southern irrigation areas in New South Wales, Victoria and South Australia.
The funding will also provide for 10 rural support officers and five social workers to strengthen the delivery of Government services to rural Australia.
Fraud and compliance — Centrelink debts — increase in repayment rate
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Centrelink | - | 0.7 | - | - | - |
| Department of Families, Housing, Community Services and Indigenous Affairs | - | - | - | - | - |
| Department of Human Services | - | - | - | - | - |
| Department of Education, Employment and Workplace Relations | - | - | - | - | - |
| Total | - | 0.7 | - | - | - |
The Government will increase the standard rate of debt repayment for Centrelink customers who have been overpaid. From 1 January 2010, Centrelink customers repaying a social welfare debt will repay their debt at a standard rate of 15 per cent of the value of their current benefit instead of the current 14 per cent. The debt repayment rate can be reduced by Centrelink, on request by the client, if it causes personal hardship. This measure will help reduce the growth in income support and family assistance debt.
This measure will cost $0.7 million in 2009‑10 to administer and is expected to increase repayment of debts by $102.7 million over four years. These debt repayments do not impact upon the fiscal balance of the Australian Government.
Fraud and compliance — establishing a data mining capability in Centrelink
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Department of Human Services | - | - | - | - | - |
| Centrelink | - | - | - | - | - |
| Department of Families, Housing, Community Services and Indigenous Affairs | - | -3.8 | -12.4 | -19.3 | -21.8 |
| Total | - | -3.8 | -12.4 | -19.3 | -21.8 |
The Government will establish an ongoing data mining capability in Centrelink that will help identify customers most at risk of receiving incorrect payments. This will include using advanced statistical techniques to identify high‑risk customers who would otherwise not have been identified under current approaches.
The cost of this measure will be met through redirected compliance activities within Centrelink and terminating or reducing less effective reviews. This measure will provide net savings of $57.4 million over four years.
Fraud and compliance — extend United Kingdom data exchange
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Department of Human Services | - | - | - | - | - |
| Centrelink | - | - | - | - | - |
| Department of Families, Housing, Community Services and Indigenous Affairs | - | -1.2 | -1.5 | -0.4 | -0.3 |
| Total | - | -1.2 | -1.5 | -0.4 | -0.3 |
The Government will extend data matching reviews undertaken with the United Kingdom, currently applied to the Age Pension, to the Disability Support Pension, Carer Payment and Commonwealth Seniors Health Card. Data matching of customer reported and actual United Kingdom pension income will test the accuracy of benefits received by people receiving the Disability Support Pension and Carer Payment and holders of the Commonwealth Seniors Health Card. This measure will reduce overpayments and will lead to the recovery of amounts already incorrectly paid.
The cost of this measure will be met from the savings from redirected compliance activities within Centrelink. The measure will provide $3.4 million in net savings over four years.
Fraud and compliance — extending real estate asset reviews to Disability Support Pension
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Department of Human Services | - | - | - | - | - |
| Centrelink | - | - | - | - | - |
| Department of Families, Housing, Community Services and Indigenous Affairs | - | -1.3 | -6.1 | -8.1 | -10.3 |
| Total | - | -1.3 | -6.1 | -8.1 | -10.3 |
The Government will extend the real estate asset reviews currently applied to recipients of the Age Pension to recipients of the Disability Support Pension. This will help prevent debts arising from non‑reporting and under‑reporting of real estate asset values (other than the family home) and improve the accuracy of payments of the Disability Support Pension.
The cost of this measure will be met from redirected compliance activities within Centrelink. The measure will provide net savings of $25.9 million over four years.
Fraud and compliance — increased Centrelink compliance review activity
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Centrelink | - | 3.1 | 11.7 | 11.7 | 11.9 |
| Department of Human Services | - | - | - | - | - |
| Department of Families, Housing, Community Services and Indigenous Affairs | - | -0.9 | -9.5 | -11.2 | -11.8 |
| Department of Education, Employment and Workplace Relations | - | -1.5 | -35.2 | -36.7 | -37.2 |
| Total | - | 0.7 | -33.0 | -36.2 | -37.1 |
The Government will increase the number of compliance reviews that Centrelink undertakes, using information obtained from existing data matching programs such as Tax File Number Declaration form matching and Pay As You Go payment summary matching. From 1 January 2010, Centrelink will expand the number of reviews of customers by 6,250 in 2009‑10 and by 31,250 in the following years. The measure is an extension of existing compliance programs, which improve the accuracy of social welfare payments and minimise debt accrued by customers.
This measure will cost $38.4 million over four years to administer and is expected to reduce welfare overpayments by $144 million over four years, resulting in net savings of $105.6 million over four years.
Fraud and compliance — matching of Medicare Benefits Schedule and Pharmaceutical Benefits Schedule data
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Medicare Australia | - | 1.0 | 0.9 | 0.9 | 0.9 |
| Department of Human Services | - | - | - | - | - |
| Department of Health and Ageing | - | - | -4.2 | -4.5 | -6.7 |
| Total | - | 1.0 | -3.3 | -3.7 | -5.8 |
| Related capital ($m) | |||||
| Medicare Australia | - | 0.6 | - | - | - |
The Government will establish expanded data matching of Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Schedule (PBS) data to help identify unusual claiming patterns for health service activity, such as unusually high claiming of prescriptions or overuse of medical services. This will allow inappropriate or fraudulent claims to be investigated and addressed.
This measure will cost $4.2 million over four years to implement and is expected to result in a reduction in MBS and PBS payments of $15.4 million over four years, resulting in net savings of $11.3 million over four years.
Medicare Australia — additional offices
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Medicare Australia | - | 1.2 | 1.7 | 1.7 | 1.7 |
| Related capital ($m) | |||||
| Medicare Australia | - | 0.8 | - | - | - |
The Government will provide $7.0 million over four years, including capital of $0.8 million, to establish Medicare Australia offices in Belmont, Western Australia, and Belmont and Warrawong, New South Wales. The new Medicare Australia offices will be co‑located with Centrelink Customer Service Centres and will make it more convenient for people to access Medicare services in these areas.
Further information on the new Medicare Australia office in Belmont, Western Australia, can be found in the press release of 22 April 2009 issued by the Minister for Human Services.
This measure delivers on the Government's election commitment.
Service delivery reform — further development of initiatives
| 2008‑09 | 2009‑10 | 2010‑11 | 2011‑12 | 2012‑13 | |
|---|---|---|---|---|---|
| Department of Human Services | - | 5.0 | - | - | - |
The Government will provide $5.0 million in 2009‑10 to continue the development of service delivery reform initiatives and to develop an overarching business plan for agencies in the Human Services portfolio, including Centrelink and Medicare Australia.
The initiatives are expected to focus on opportunities to improve services for Australian citizens, through a more integrated national service delivery system.
This funding extends the 2008‑09 Budget measure Service Delivery Reform in the Human Services portfolio.
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