Show download pdf controls
  • Department of Human Services – specified benefits and entitlements 2017–18 to 2019–20 financial years data matching program protocol

    At a glance

    This protocol has been prepared to meet the Guidelines on Data Matching in Australian Government Administration 2014 (Guidelines) published by the Office of the Australian Information Commissioner (OAIC).

    The Australian Taxation Office (ATO) will collect information from Services Australia for the following benefits and entitlements:

    • Paid parental leave scheme.
    • Medicare entitlement statements.

    This data will be compared with claims made in income tax returns for the invalid and invalid carer tax offset and for exemptions from paying the Medicare levy and Medicare levy surcharge.

    In recent years there have been a number of legislative changes for invalid and invalid carer tax offset. The invalid and invalid carer tax offset is reduced for any year the claimant received paid parental leave. The paid parental leave data will allow the ATO to ensure the offset is correctly claimed.

    Medicare provides Australian residents access to health care. To help fund the scheme, most taxpayers pay a Medicare levy of 2% of their taxable income. Medicare levy is payable by individuals residing in Australia who are eligible for Medicare benefits.

    Individuals who are not entitled to Medicare benefits can claim an exemption from the Medicare levy in their income tax return. To obtain an exemption, taxpayers must not be eligible for Medicare benefits and apply for a Medicare entitlement statement.

    The DHS Medicare Entitlement Statement Unit process Medicare entitlement statement applications. The Medicare entitlement statement is applied for using the approved form and must be reapplied for each financial year. Individuals may have a Medicare entitlement statement for multiple periods in the same financial year. Exemption from the Medicare levy extends to the Medicare levy surcharge.

    Taxpayers who don’t have private hospital health insurance, may have to pay the Medicare levy surcharge in addition to the Medicare levy. Medicare levy surcharge depends on the period without appropriate private hospital health insurance and your income.

    The program will enable the ATO to avoid any unnecessary contact from us for those that are genuinely entitled to claim these offsets and exemptions.

    We have been undertaking this data matching program for nine years and intend to continue conducting this data matching program for a futher three years.

    Program objectives

    The objectives of this data matching program are to:

    • Ensure that taxpayers are correctly claiming entitlement to the invalid and invalid carer tax offset and exemption from payment of the Medicare levy and Medicare levy surcharge.
    • Work with taxpayers and intermediaries to obtain a better understanding of the identified risks and trends of non-compliance.
    • Develop education strategies so that compliance is better understood and easier in the future.
    • Expedite the processing of income tax returns and payment of refunds to taxpayers who are genuinely entitled to claim these offsets and exemptions.
    • Undertake verification activities where the information obtained indicates a taxpayer may not be entitled to claim the offset or exemption, either partly or in its entirety.
    • Ensure compliance with registration, lodgement, correct reporting and payment of taxation and superannuation obligations.

    How the data will be used

    The data obtained from DHS will be matched against claims and offsets claimed by a taxpayer on their income tax returns and:

    • Invalid and invalid carer tax offset may be:  
      • Reduced for any period the claimant received paid parental leave.
      • Disallowed where the claimant and their spouses adjusted taxable income exceeds $100,000.
      • Disallowed where the person being cared for is not in receipt of eligible invalidity support payments.
       
    • In certain circumstances taxpayers may be exempt from paying the Medicare levy where they are not entitled to receive Medicare benefits for a part or whole financial year. Claims for exemption from payment of the Medicare levy and MLS may be disallowed where:  
      • They declare they are not entitled to receive Medicare benefits but do not hold a valid Medicare entitlement statement.
      • There is a discrepancy between the number of days they claim they are not entitled to receive Medicare benefits and what is included in the Medicare entitlement statement.
       

    Learn more about what we will do before amending a return.

    Previous/pilot programs

    The program allows us to identify those taxpayers that are entitled to claim the specified tax offsets and exemptions, along with those that may have made a claim for an offset or exemption to which they are not entitled.

    Tightening of the eligibility rules, our data matching program and education strategies have seen a 72% reduction in discrepant claims for the invalid and invalid carer tax offset.

    Based on the invalid and invalid carer offset work undertaken on 2015–16 tax returns the ATO contacted over 500 taxpayers regarding their dependent invalid and carer offset and raised $1 million in revenue.

    Correct reporting of Family Tax Benefit Part B and the Carer's Allowance helped reduce the risk so the data is no longer collected.  Paid parental leave can still be incorrectly reported at a welfare label.

    Our data matching activities on Medicare exemption claims for 2015–16 returns identified 95,388 individuals that held Medicare care entitlement statements. We were able to validate the majority (89)% of these without needing to contact the taxpayer. Reviews are being conducted on the remaining 10,251 claims.

    Data related matters

    Data matching and user agency

    We are the matching agency and the sole user of the data obtained in the course of this data matching program. The data matching program will be conducted on our secure systems in accordance with approved policies and procedures.

    In very limited and specific circumstances we may be permitted by law to disclose individual records to other government agencies.

    Learn more about our on-disclosure provisions.

    Data providers

    Data will be obtained from the Services Australia (Centrelink and Medicare).

    Data elements

    We will obtain from Services Australia for the 2017–18, 2018–19 and 2019–20 financial years the following information:

    • Paid parental leave scheme.  
      • Identifying particulars of the employer (Australian business number, legal and trading names, addresses).
      • Detail of payments made by the employer to the recipient (employee) (start and end dates, amounts paid).
      • Identifying particulars of the recipient (employee) of paid parental leave (name address, date of birth, customer reference number).
      • Detail of payments made by DHS to the employer, for payments made by the employer to the recipient (employee) (start and end date, amounts paid).
       
    • Medicare entitlement statements:  
      • Identifying particulars of the recipient of the statement (name, address, date of birth).
      • Detail of the periods the person was not entitled to Medicare benefits (start and end dates, current status).
       

    See the full data dictionary.

    Number of records

    We estimate that we will obtain each year:

    • 400,000 records for paid parental leave scheme.
    • 100,000 records for Medicare entitlement statements will be obtained each financial year.

    Data quality

    The ATO and DHS have an extensive history of working together to administer the respective Taxation and Social Security systems. DHS have legislative obligations to administer welfare payments and allowances which necessitate maintaining high quality data. We have previously collected this data from DHS and found it to be of high quality. The ATO has also developed quality assurance processes in conjunction with DHS to ensure the integrity of the data is not compromised.

    The data is supplied in accordance with reporting specifications including record layout and data format for each record. Data will be transformed into a standardised format and validated to ensure that it contains the required data elements prior to loading to our computer systems.

    Learn more about:

    Data retention

    The first collection of data under this program will include:

    • Paid parental leave scheme:  
      • Each financial year is collected annually in the second quarter of the following financial year (2017–18 data will be collected October/November 2018).
       
    • Medicare Entitlements Scheme:  
      • Each financial year is collected biannually in the third quarter of the following financial year and after the end of that following financial year (2017–18 data will be collected March and September 2019).
      • Original data is collected in the third quarter of the following financial year.
      • Original data and amendments is collected after the end of the following financial year.
      • The data refresh ensures currency of the data within the related claiming period.
       

    The collection of the remaining years will continue progressively on the above basis.

    We destroy information that is no longer required in accordance with the Guidelines and the National Archives of Australia's General Disposal Authority 24 - Records relating to Data Matching Exercises (GDA 24) as follows:

    • where the data matching process does not lead to a match and the data is no longer required at least within 90 days of the end of the data matching process
    • where a discrepancy match is identified, a decision as to whether administrative action will be taken will be made no later than 90 days after the data matching process
    • where a decision is taken to not pursue administrative action, the data will be destroyed within 90 days of making that decision
    • when selected cases are pursued, the data is then incorporated into our case record system in accordance with item 6.3 of GDA 24.

    Public notification of the program

    We will notify the public of our intention to undertake this program by:

    • publishing a notice in the Federal Register of Legislation - Gazettes in the week commencing 23 July 2018 – view the content of the gazette notice
    • publishing this data matching program protocol on our website at Data matching protocols
    • ATO advise data providers they:  
      • can notify their clients of their participation in this program and provide written materials to assist with this
      • should update their privacy policies to note that personal information is disclosed to the ATO for data matching purposes.
       
    • Privacy PolicyExternal LinkServices Australia on their website includes that personal information is disclosed to ATO for data matching purposes.

    Gazette notice content

    Commissioner of Taxation – Notice of a data matching program

    The Australian Taxation Office (ATO) will acquire details of individuals in receipt of Paid parental leave payments and Medicare entitlement statements from Services Australia (Centrelink and Medicare) for the 2017–18, 2018–19 and 2019–20 financial years.

    The data items that will be obtained are:

    • Paid parental leave scheme:  
      • Identifying particulars of the employer (Australian business number, legal and trading names, addresses).
      • Detail of payments made by the employer to the recipient (employee) (start and end dates, amounts paid).
      • Identifying particulars of the recipient (employee) of paid parental leave (name address, date of birth, customer reference number).
      • Detail of payments made by DHS to the employer, for payments made by the employer to the recipient (employee) (start and end date, amounts paid).
       
    • Medicare entitlement statements:  
      • Identifying particulars of the recipient of the statement (name, address, date of birth).
      • Detail of the periods the person was not entitled to Medicare benefits (start and end dates, current status).
       

    It is estimated that records for more than 500,000 individuals will be obtained for each financial year.

    These records will be electronically matched with ATO data holdings to identify non-compliance with registration, lodgment, reporting and payment obligations under taxation laws.

    The objectives of this data matching program are to:

    • Ensure that taxpayers are correctly claiming entitlement to the invalid and invalid carer tax offset and exemption from payment of the Medicare levy and Medicare levy surcharge.
    • Work with taxpayers and intermediaries to obtain a better understanding of the identified risks and trends of non-compliance.
    • Develop education strategies so that compliance is better understood and easier in the future.
    • Expedite the processing of income tax returns and payment of refunds to taxpayers who are genuinely entitled to claim these offsets and exemptions.
    • Undertake verification activities where the information obtained indicates a taxpayer may not be entitled to claim the offset or exemption, either partly or in its entirety.
    • Ensure compliance with registration, lodgement, correct reporting and payment of taxation and superannuation obligations.

    A document describing this program has been prepared in consultation with the Office of the Australian Information Commissioner. A copy of this document is available at Data matching protocols.

    The ATO complies with the Office of the Australian Information Commissioner’s Guidelines on Data Matching in Australian Government Administration (2014) which includes standards for data matching to protect the privacy of individuals. A full copy of the ATO’s privacy policy can be accessed at Your privacy.

    Go back

    Legal matters

    Learn more about:

    Data Dictionary

    Paid parental leave data dictionary

    Employee

    Field Name

    Characters

    Field Description

    Emplr_ABN

    11

    Employer ABN

    Emplyr_CRN

    10

    Employee CRN

    Emple_Srnm

    30

    Employee family name

    Emple_First_Gvn_Nm

    15

    Employee first given name

    Emple_Othr_Gvn_Nm

    15

    Employee second given name

    Emple_Day_Brth

    2

    Employee day of birth

    Emple_Mth_Brth

    2

    Employee month of birth

    Emple_Yr_Brth

    4

    Employee year of birth

    Emple_Res_Addr_Ln_1

    38

    Employee residential address line 1

    Emple_Res_Addr_Ln_2

    38

    Employee residential address line 2

    Emple_Res_Lclty

    27

    Employee residential suburb, town or locality

    Emple_Res_Stt_Cd

    3

    Employee residential state or territory

    Emple_Res_Pc

    4

    Employee residential postcode

    Emple_Res_Cntry

    20

    Employee residential country

    Emple_Pstl_Addr_Ln_1

    38

    Employee postal address line 1

    Emple_Pstl_Addr_Ln_2

    38

    Employee postal address line 2

    Emple_Pstl_Lclty

    27

    Employee postal suburb, town or locality

    Emple_Pstl_Stt_Cd

    3

    Employee postal state or territory

    Emple_Pstl_Pc

    4

    Employee postal postcode

    Emple_Pstl_Cntry

    20

    Employee postal country

    Emple_Rprt_Strt_Dt

    8

    Report start date

    Emple_Rprt_End_Dt

    8

    Report end date

    Employer

    Field Name

    Characters

    Field Description

    Emplyr_ABN

    11

    Employer ABN

    Emplyr_Srnm

    40

    Employer registered name

    Emplyr_First_Gvn_Nm

    40

    Employer trading name

    Emplyr_Addr_Ln_1

    38

    Employer address line 1

    Emplyr_Addr_Ln_2

    38

    Employer address line 2

    Emplyr_Lclty

    27

    Employer suburb, town or locality

    Emplyr_Stt_Cd

    3

    Employer state or territory

    Emplyr_Pc

    4

    Employer postcode

    Emplyr_Cntry

    20

    Employer country

    Emplyr_Strt_Dt

    8

    Report Start Date

    Emplyr_End_Dt

    8

    Report End Date

    Payment

    Field Name

    Characters

    Field Description

    Emplr_ABN

    11

    Employer ABN

    Emplye_CRN

    10

    Employee CRN

    Strt_Dt_PPL

    8

    Start date of paid parental leave

    End_Dt_PPL

    8

    End date of paid parental leave

    Dt_Clk_First_Pd_Emplr_for_Emple

    8

    Date Centrelink first paid employer for this employee

    Dt_Clk_Last_Pd_Emplr_for_Emple

    8

    Date Centrelink last paid employer for this employee

    Tot_Amt_Pd_to_Emplr_for_Emple

    6

    Total amount paid to employer for this employee

    Pmt_Rprt_Strt_Dt

    8

    Report start date

    Pmt_Rprt_End_Dt

    8

    Report end date

    Medicare entitlement statement data dictionary

    Field Name

    Characters

    Field Description

    REF-NUMBER

    12

    This field is provided to allow data records in the submitted dataset to be related back to data holdings from which the submitted data record may have been extracted, or, for use in indexing a dataset in order to merge the matching result details with the original source dataset.

    SRNM

    30

    The surname on an individual

    1ST-NM

    15

    The first given name of first given initial of an individual

    OTHR-GVN-NM

    30

    The second given name or second given initial of an individual

    FULL-NM

    76

    The name of a non-individual entity

    BRTH-YR

    4

    The year of birth of an individual

    BRTH-MTH

    2

    The month of birth of an individual

    BRTH-DAY

    2

    The day of birth of an individual

    ADDR-LN-1

    38

    The first line of the address

    ADDR-LN-2

    38

    The second line of the address

    STATE-CD

    3

    The state or territory of the address

    LCLTY-NM

    27

    The suburb, town or city of the address

    POST-CD

    4

    The postcode of the address

    FULL-ADDR

    140

    The field may contain address details that cannot readily be structured into address lines, locality and post code

    RPT-ID-NUM

    11

    A tax file number (TFN), Australian Company Number (ACN) or Australian Business Number (ABN)

    CERT-START

    8

    Date of the start of the Medicare Levy Exemption Certificate

    CERT-END

    8

    Date of the end of the Medicare Levy Exemption Certificate

    CERT-STAT

    1

    Status of the Medicare Levy Exemption Certificate: [C]ertified or [R]evoked

    Go back

    More information

    Our on-disclosure provisions

    Division 355 of Schedule 1 to the Taxation Administration Act 1953 sets out the other government agencies we can disclose taxpayer information to, and the circumstances we are permitted to make those disclosures. These include agencies responsible for:

    • state and territory revenue laws
    • payments of social welfare and health and safety programs for determining eligibility for certain types of benefits and rebates
    • overseeing superannuation funds, corporations and financial market operators to ensure compliance with prudential regulations
    • determining entitlement to rehabilitation and compensation payments
    • law enforcement activities to assist with specific types of investigations.

    Each request for information by other agencies will be assessed on its merits and must be for an admissible purpose allowed for by taxation laws.

    Go back

    How we undertake data matching

    We use sophisticated identity matching techniques to ensure we identify the correct taxpayer when we obtain data from third parties. This technique uses multiple details to obtain an identity match. For example, where a name, address and date of birth are available all items are used in the identity matching process. Very high confidence matches will occur where all fields are matched.

    Where high confidence identity matches do not occur additional manual processes such as individual record searches, seeking sufficient common indicators to allow confirmation of an identy may be undertaken to obtain a high match. Where it is determined data is no longer required a decision is taken to destroy the data.

    Data analysts use various models and techniques to detect potential discrepancies, such as under-reported income or over-reported deductions. Higher risk discrepancy matches will be loaded to our case management system and allocated to compliance staff for actioning.

    Lower risk discrepancy matches will be further analysed and a decision made to take some form of compliance or educational activity. Where it is determined data is no longer required a decision is taken to destroy the data.

    Destruction of data is conducted in accordance with the timeframes and requirements of the Guidelines and GDA24 or an extension of time is sought from the Information Commissioner.

    Go back

    What we will do before we amend a return

    Where we detect a discrepancy that requires verification we will contact the taxpayer usually by telephone, letter or email.

    Before any administrative action is taken, taxpayers will be provided with the opportunity to verify the accuracy of the information obtained by us. Taxpayers will be given at least 28 days to respond before administrative action is taken.

    For example, where discrepancy matching identifies that a taxpayer may not be reporting all of their income, but in fact they are reporting the income under another entity, the taxpayer will be given the opportunity to clarify the situation.

    The data may also be used to ensure that taxpayers are complying with their other taxation and superannuation obligations, including registration requirements, lodgment obligations and payment responsibilities.

    In cases where taxpayers fail to comply with these obligations, after being reminded of them, escalation for prosecution action may be instigated in appropriate circumstances.

    Where a taxpayer has correctly met its obligations, the use of the data will reduce the likelihood of contact from us.

    Go back

    How we protect your personal information

    Our staff are subject to the strict confidentiality and privacy provisions contained in Division 355 of Schedule 1 to the Taxation Administration Act 1953 and include terms of imprisonment in cases of serious contravention of these provisions.

    All ATO computer systems are strictly controlled, with features including:

    • system access controls and security groupings
    • login identification codes and password protection
    • full audit trails of data files and system accesses.

    We will utilise our secure internet-based data transfer facility to obtain the data from DHS.

    Where this is not possible, data providers will be requested to provide copies of the data on a CD, DVD or USB device encrypted to a standard that satisfies Australian government requirements. The magnetic media device will be password protected, with the password provided under separate cover to us.

    Where the data is not collected by an authorised ATO officer, an approved courier service will be used to collect the data. In remote locations not serviced by an approved courier service, the Australia Post ‘Express Post Platinum’ will be used (this provides both tracking and signature for delivery features).

    Go back

    Our quality assurance framework

    Quality assurance processes are integrated into our processes and computer systems and are applied throughout the data matching cycle.

    These assurance processes include:

    • registering the intention to undertake a data matching program on an internal register
    • obtaining approval from the Data Steward and relevant Senior Executive Service (SES) officers prior to any activity being undertaken
    • conducting program pilots or obtaining sample data to ensure the data matching program will achieve its objectives prior to full data sets being obtained
    • notifying the Office of the Australian Information Commissioner of our intention to undertake the data matching program and request permission to vary from the data matching guidelines (where applicable)
    • access to the data is restricted to approved users and access management logs record details of who has accessed the data
    • quality assurance processes embedded into compliance activities include:  
      • review of risk assessments, taxpayer profiles and case plans by senior officers prior to client contact
      • ongoing reviews of cases by subject matter technical experts at key points during the life cycle of a case
      • regular independent panel reviews of samples of case work to provide assurance of the accuracy and consistency of case work.
       

    These processes ensure data is collected and used in accordance with our data management policies and principles, and complies with the Information Commissioner's data matching guidelines.

    Go back

    Why we undertake data matching

    We have considered a range of alternatives to this data matching program to ensure entities are complying with their taxation and superannuation obligations. Relying only on data already held by the ATO is of limited value for the following reasons:

    • the taxation system operates on willing participation so our data is derived from taxpayers that are correctly registered and meeting their lodgment obligations
    • we have no other data to cross-reference to ensure taxpayers are reporting their obligations correctly other than by directly contacting every taxpayer.

    This data matching program will allow us to identify taxpayers who are not fully complying with their obligations, as well as those that may be operating outside the taxation and superannuation systems. It will also reduce the likelihood of the ATO unnecessarily contacting taxpayers who are complying with their taxation obligations.

    Data matching is an effective method of examining records of thousands of taxpayers to ensure compliance with lodgment and reporting obligations that would otherwise be a resource intensive exercise.

    Data matching also assists us in effectively promoting voluntary compliance by notifying the public of areas and activities under scrutiny.

    Go back

    Costs and benefits of data matching

    Costs

    There are some incidental costs to us in the conduct of this data matching program, but these will be more than offset by the total revenue protected. These costs include:

    • data analyst resources to identify potential instances of non-compliance
    • compliance resources to manage casework and educational activities
    • governance resources to ensure that the Guidelines and Privacy Act 1988 are complied with, and quality assurance work to ensure the rigour of the work undertaken by analysts and compliance staff
    • storage of the data.

    Benefits

    Benefits from conducting this data matching programs include:

    • maintaining community confidence in both the taxation and superannuation systems by creating a level playing field, as well as maintaining community confidence in the ATO’s capacity to fairly administer those systems
    • integrity of the taxation and superannuation systems – there are inherent risks in taxpayers not complying with their obligations, including those that deliberately abuse these systems – this program will assist the ATO in detecting, dealing with and deterring those that are not meeting their obligations
    • enabling enforcement activity and recovery of taxation revenue – without undertaking this data matching program and subsequent compliance activity there are no assurances that a wider risk to revenue does not exist.

    Go back

    Making a privacy complaint

    If a taxpayer is not satisfied with how we have collected, held, used or disclosed its personal information, they can make a formal complaint by:

    • using the online complaints form at Complaints, compliments and suggestions
    • phoning our complaints line on 1800 199 010
    • phoning the National Relay Service on 13 36 77 (if you have a hearing, speech or communication impairment)
    • sending us a free fax on 1800 060 063
    • writing to us at:

    ATO Complaints
    PO Box 1271
    ALBURY  NSW  2640

    If a taxpayer is not satisfied with the outcome of the privacy complaint, they can contact the Office of the Australian Information Commissioner. More details on the process can be found on the OAIC website at Privacy complaintsExternal Link

    Go back

    Our lawful role

    The Commissioner of Taxation has responsibility for ensuring taxpayers meet their taxation and superannuation obligations. Compliance with these obligations is a matter we take seriously and failure to address non-compliant behaviour has the potential to undermine community confidence in the integrity of the taxation and superannuation systems and our capacity to administer those systems.

    Our data matching program is one of the strategies used to identity and deal with non-compliant behaviour. Data matching programs also provide a degree of assurance that taxpayers are meeting their obligations.

    Go back

    Our legal authority to undertake a data matching program

    ATO legislation

    The disclosure of this information is certified under Section 208 (b)(i) of the Social Security (Administration) Act 1999.

    Where appropriate to ensure statutory repuirements are met, the data will be obtained under our formal information gathering powers contained in section 353-10 of Schedule 1 to the Taxation Administration Act 1953.

    This is a coercive power that obligate the data providers to furnish the information requested. We will use the information for taxation and superannuation compliance purposes.

    Privacy Act

    Data will only be used within the limits prescribed by Australian Privacy Principle 6 (APP6) contained in Schedule 1 of the Privacy Act 1988 and in particular:

    • APP6.2(b) – the use of the information is required or authorised by an Australian law
    • APP6.2(e) – the ATO reasonably believes that the use of the information is reasonably necessary for our enforcement related activities.

    Go back

      Last modified: 25 Jul 2018QC 56316