• Department of Human Services - specified benefits and entitlements - 2014-15 to 2016-17 financial years data matching program protocol

    At a glance

    We will collect information from the Department of Human Services for the following benefits and entitlements:

    • family tax benefits - part B
    • paid parental leave scheme
    • carers' allowance
    • 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 surcharge.

    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. Due to a number of legislative changes in recent years, some people continue to claim these offsets and exemptions incorrectly.

    We have been undertaking this data matching program for more than five years and intend to continue conducting this data matching program for a further three years. It is not part of the two enhanced welfare payment integrity measures announced in the 2015-16 Mid-Year Economic and Fiscal Outlook but is to identify peoples entitlement to offsets and exemptions administered through the taxation system. 

    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 care 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 the Department of Human Services 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 family tax benefit - part B or paid parental leave
      • Disallowed where the claimant and their spouses adjusted taxable income (including any amounts of carer allowance received) exceeds $150,000
      • 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 surcharge 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 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.

    Based on the dependent invalid and carer offset work undertaken this financial year on 2013-14 tax returns the ATO contacted over 2,000 taxpayers regarding their dependent invalid and carer offset and raised $1.5 million in revenue. We validated an additional 3,600 dependent invalid and carer offset claims without needing to contact the taxpayer.

    During the 2014-15 financial year we undertook compliance activities relating to the dependent invalid and carer offset claimed in 2012-13 returns and identified over 5,000 people that incorrectly claimed the offset raising $8 million in revenue.

    Our data matching activities on Medicare exemption claims for 2013-14 returns identified 62,000 individuals that held Medicare care entitlement statements. We were able to validate the claims of 57,000 of these without needing to contact the taxpayer. Reviews are being conducted on the remaining 5,000 claims.

    Data matching and user agency

    We are the matching agency and in most cases 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 Department of Human Services (Centrelink and Medicare).

    Data elements

    We will obtain the following information from the Department of Human Services for the 2014-15, 2015-16 and 2016-17 financial years:

    Family tax benefit - Part B

    • Identifying particulars to the benefit recipient (name, address, date of birth, customer reference number)
     
    • Identifying particulars of the recipient's spouse (name, address, date of birth, customer reference number)
     
    • Identifying particulars to the benefit recipient (name, address, date of birth, customer reference number)
     
    • Details of spousal arrangements (marital status, start and end dates)
     
    • Identifying particulars of the recipient's children (name, address, date of birth, customer reference number)
     
    • Details of spousal arrangements (marital status, start and end dates)
     
    • Details of payments and benefits received by the recipient (amounts received, start and end dates)
     
    • Other information that is deemed necessary for determining eligibility for a tax offset or rebate
     
    • Details of payments and benefits received by the recipient (amounts received, start and end dates)
     

    Paid parental leave scheme

    • Employer information (Australian business number, legal and trading names, addresses)
     
    • Identifying particulars of the recipient (employee) of paid parental leave (name, address, date of birth, customer reference number)
     
    • Details of payments made by the employer to the recipient (employee) (start and end dates, amounts paid)
     
    • Details of payments made by the Department of Human Services to the employer, for payments made by the employer to the recipient (employee) (start and end date, amounts paid)
     

    Carer allowance and carer allowance health care card

    • Identifying particulars of the recipient of the allowance or health care card (name, address, date of birth, customer reference number)
     
    • Details of receipt of the allowance or health care card (type, start and end dates, amounts of benefits received)
     
    • Identifying particulars of the person(s) being cared for
     

     

    Medicare entitlement statement

    • 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)
     

    Number of records

    We estimate the total number of records for family tax benefit - part B, paid parental leave scheme and carers' allowance will be 2 million records for each financial year and a further 130,000 records for Medicare entitlement statements. All records relate to individuals.

    Data quality

    We have previously collected this data from the Department of Human Services and found it to be of high quality.

    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 collection of data under this program protocol is expected to occur in the first quarter of the subsequent financial year.

    Data will be destroyed in accordance with the guidelines as follows:

    • where the data matching process does not lead to a match and the data is no longer required 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
    • where administrative action is pursued, the data is then incorporated into the taxpayer’s file and can be retained in accordance with item 6.3 of National Archives’ General Disposal Authority 24.

    Public notification of the program

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

    • publishing a notice in the Commonwealth government notices gazette in the week commencing 15 February 2016 - view the content of the gazette notice.
    • publishing this data matching program protocol on our website at Data matching protocols
    • advising the data providers they  
      • can notify their clients of their participation in this program and provided written materials to assist with this
      • should update their privacy policies to note that personal information is disclosed to us 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 family tax benefit part B, paid parental leave, carer allowance and Medicare entitlement statements from the Department of Human Services (Centrelink and Medicare) for the 2014–15, 2015–16 and 2016–17 financial years.

    The data items that will be obtained are personal details of:

    • individuals in receipt of family tax benefit part B, including spouse and children details
    • employers and employees in receipt of paid parental leave
    • individuals in receipt of carer allowance and carer allowance health care card and the individuals being cared for
    • individuals in receipt of a Medicare entitlement statement.

    It is estimated that records for more than 2 million 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 invalid and invalid carer tax offset and exemption from payment of the Medicare levy and Medicare care levy surcharge
    • Work with taxpayers and intermediaries to obtain a better understanding of the identified risks and trends on non-compliance
    • Develop education strategies so that compliance is better understood and compliance is 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 rights.

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    Legal matters

    Learn more about:

    More information

    What we will do before we amend a return

    Where we detect a discrepancy that requires verification we will contact the taxpayer by phone, 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 is not 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.

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    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.

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    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.

    Additional manual processes may be undertaken where high confidence identity matches do not occur, or a decision taken to destroy the data with no further action.

    Where administrative action is proposed, additional checks will take place to ensure the correct taxpayer has been identified. The taxpayers will be provided with the opportunity to verify the accuracy of the information before any administrative action is taken.

    Data analysts use various models and techniques to detect potential discrepancies, such as under-reported income or over-claimed 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, or to destroy the data. In accordance with Guideline 7, where a decision is made not to take further action, the information that has been collected will be destroyed within 90 days of the decision not to take further action.

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    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 source agencies.

    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).

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    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 matching gatekeeper 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)
    • maintaining access management logs recording details of who has access to the data, why access is required and how it will be used
    • processes embedded into compliance activities, such as:  
      • 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.

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    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:

    • we only receive data 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 appear to be 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.

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    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 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.

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    Making a privacy complaint

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

    • using the online complaints form at Complaints
    • 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 How do I make a privacy complaint?External Link

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    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 identify and deal with non-compliant behaviour. Data matching programs also provide a degree of assurance that taxpayers are meeting their obligations.

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    Our legal authority to undertake a data matching program

    ATO legislation

    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 obligates 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.

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      Last modified: 15 Feb 2016QC 47950