In the 1990–91 Budget, the Government announced new measures to detect incorrect payment in the income support system. This involved a programme of computer matching of identity and income data held by a limited number of government agencies, including the Australian Taxation Office (ATO).
In order to validate these matches, people claiming Australian Government financial assistance have to provide a tax file number as a condition of grant of pension or allowance.
The legal authority for data matching is contained in the Data-matching Program (Assistance and Tax) Act 1990 (the Act). The Act provides for participating agencies holding personal data to match that information through a central Data Matching Agency located within the Department of Human Services (DHS). The establishment of the Data Matching Agency is authorised under section 4 of the Act.
Under section 12 of the Act, each agency is required to table in Parliament a standard report every year and a comprehensive report every three years. A comprehensive report was last submitted in 2013.
This report focuses on the operation of the Data Matching Program within DVA in the 2013–14 financial year.
For a full explanation of the progress of the Data Matching Program within the Department, this report should be read in conjunction with previous data matching annual reports.
Overview of the Data Matching Program
Objectives of the Data Matching Program
The objectives of the Data Matching Program are:
- to detect invalid tax file numbers
- identity matching, which detects fictitious or assumed identities
- payment matching, which detects people who maybe in receipt of incorrect or dual payments from the same or different agencies where the receipt of one precludes or limits the payment of the other
- income matching, which detects instances where the income information disclosed to the assistance agency differs from the income declared to the ATO (DVA provides details of these cases to the ATO for it to investigate).
There are six steps in each matching cycle. These are detailed in section 7 of the Act.
The following departments are involved in the Data Matching Program and are known as assistance agencies under the Act:
- Department of Social Services
The Act defines the ATO and assistance agencies as source agencies.
The ATO provides details of identity and tax data for people in receipt of income support payment for comparison with the details provided by the assistance agencies.
Types of discrepancies
The following types of incorrect payments are detected as a result of payment and income matching:
- non-entitlement of a client, partner, parent or child to a DHS or DVA payment, where receipt of a payment from one agency would preclude or limit payments from one or both agencies
- income disclosed to DHS and/or DVA which has been used to calculate an income support payment is different from that reported to the ATO.
Nature and frequency of matching
Data matching is defined as the use of computer techniques to compare data found in two or more computer files to identify cases where there is a risk of either incorrect payment or tax evasion.
Data matching investigations
Invalid tax file numbers
DVA actions all discrepancies from this step by contacting the client and obtaining the correct TFN.
DVA also actions all discrepancies from this step by correcting administrative errors, investigating anomalies that may potentially be fraudulent or seeking the correct name from the client and providing those details to the ATO for it to correct its records.
DVA runs payment matching in one cycle annually solely to confirm the validity of the checks and balances conducted currently within the Department.
Income matching is run in every cycle by the Department. Income discrepancies are selected during this process for further investigation.
Deselection of cases
There are no exclusions from data matching within the Department. However, deselection is applied, which allows for an even distribution of workload for the investigators.
Deselection is applied to Step 5 ‘income matching’ only, to ensure that the same discrepant case is not picked up in more than one cycle each year.
Critical analysis is conducted on all discrepant cases before being released into production to ensure the integrity of the data provided, to identify areas for improvement of selection, and to ensure all data-matching business rules are applied.
Investigations of all data match discrepancies involve examination of the client’s DVA electronic records and then, if necessary, the hard copy files. Any administrative errors are corrected at this stage without the client needing to be contacted. An example of this is Step 4 ‘identity matching’, where a husband’s TFN has been recorded for the wife, or vice versa.
Clients are sent correspondence in accordance with section 11 of the Act requesting further information and documentation to assist with the investigation. Under the Act, clients are given 28 days to comply, then a further seven days based on the Evidence Act 1995.
In cases where the initial investigation has revealed potential fraud, the investigator may use section 11(4), where a section 11 letter is not sent as it may prejudice the effectiveness of an investigation into the possible commission of an offence.
Based on the information that the client provides, the payment rate is corrected and, where appropriate, overpayments are calculated, raised and recovered.
Further information may be obtained from other Commonwealth, state or private agencies to help ascertain the correct client details.
The client’s right to privacy is protected at all times by application of the Information Privacy Principles (Privacy Act 1988) which govern the collection, storage, use and disclosure of personal information.
Action taken on discrepancies
Information required as per Act Guidelines 9(i) and 9(vi)
The Act requires that each source agency report on matters as described in paragraphs 9(i) and 9 (vi) of the Data-matching Program (Assistance and Tax) Guidelines such as the number of matches undertaken and the proportion of discrepancies. This section contains the details of information required by these guidelines.
Reviews of entitlement by the Department may bring to notice cases where an offence may have been committed under the Veterans’ Entitlements Act 1986, the Safety, Rehabilitation and Compensation Act 1988, the Military Rehabilitation and Compensation Act 2004, the Social Security Act 1990, the Criminal Code Act 1995, or the Crimes Act 1914.
The Department’s role in the prosecution process is to investigate cases where it appears an offence may have been committed and to forward these cases, if warranted, to the Commonwealth Director of Public Prosecutions (CDPP) for a decision as to whether prosecution action should proceed.
Depending on the type of investigation required, a case may be referred to the Australian Federal Police for further investigation. For the past four years, any suspected fraud cases detected were referred to the Business Compliance Section of DVA for an initial case assessment, prioritisation and further action if appropriate.
Where sufficient evidence is obtained from investigation, the Business Compliance Section makes recommendations to senior management on the appropriateness or readiness of referring the matter to the CDPP.
|Cases referred to the Business Compliance Section identified through data matching||10|
|Cases referred to the CDPP identified through data matching||0|
|Dismissed by the CDPP due to insufficient evidence or not in the public interest||0|
|Cases with the CDPP pending consideration||0|
|Cases still under investigation by the Business Compliance Section1||4|
|Cases finalised by the Business Compliance Section without CDPP referral||6|
1 Figures may include cases that were identified in previous financial years
|Total Number of records read||1,310,243|
|Matches that resulted in discrepancies1||9,859|
|Proportion of matches that resulted in discrepancies||0.75%|
|Number of discrepancies referred for investigation||2,488|
|Number of discrepancies referred for investigation that resulted in a notice under section 11 of the Act being sent||192|
|Number of cases where the section 11 letter was followed up by action being undertaken2||173|
|Proportion of discrepancies that resulted in action being taken||1.75%|
|Proportion of discrepancies which did not proceed to action after a section 11 letter was sent||9.90%|
|Number of overpayments raised3||236|
|Cases where debt was fully recovered4||143|
|Number of pensions cancelled, suspended or reduced||183|
|Number of pensions that were continued||66|
|Number of pensions that were increased||18|
1 Discrepancies include those resulting from TFN validity checking, identity matching, payment matching and income matching. The number of discrepancies does not represent the number of pensioners: more than one discrepancy may be detected in respect of the same pensioner.
2 Refers to the action set out in section 10 of the Act – a pension was reduced, cancelled, increased or continued.
3 Overpayments raised include some for cases where section 11 action took place in a previous financial year.
4 This figure includes debts fully recovered from previous financial years.
Costs/benefits of the programme
This section discusses the costs and benefits of the Data Matching Program. The Department’s involvement in the programme has shown there are substantial savings to be gained through comparison of data held by different agencies.
|Support costs for data matching processing system||$1,362|
DVA calculates savings for clients whose payments are suspended, cancelled or reduced. For clients in receipt of a pension, it is assumed that they would have continued to receive the same rate of payment for 52 fortnights. These savings are in line with the methodology used by DHS to calculate savings.
|Number of pensions reduced||164|
|Number of pensions suspended/cancelled||19|
Table C5: Total savings 2013–14
|Pensions cancelled / reduced / suspended1||183|
|Potential overpayments identified2||130|
|Debts fully recovered this financial year||143|
|Value of overpayments raised||$1,622,938|
|Less waivers/write offs||-$644|
|Value of projected savings||$795,502|
|Total gross savings||$2,417,796|
|Less Departmental Expenses||-$195,590|
1 The number of cases that result in projected savings. Although a person’s pension may be cancelled, reduced or suspended, an overpayment may not necessarily exist.
2 Where a case officer believes there may be an overpayment, a potential debt identifier is registered. The figure reflects the number of potential debts identified.
3 The discrepancy between the number of overpayments identified and the number of overpayments raised is due to the fact that, although a potential debt has been identified, further investigation may result in a determination that no debt existed. Debts may also be raised and consequently recovered separately for both members of a couple. Overpayments raised during each financial year may also have been identified in previous financial years.
|Value of overpayments raised||$769,132||$1,726,242||$1,622,938|
|Less waivers/write offs||-$15,680||-$252,185||-$644|
|Value of projected savings||$513,811||$1,104,614||$795,502|
|Total gross savings||$1,267,263||$2,578,671||$2,417,796|
|Less Departmental Expenses||-$240,926||-$207,769||-$195,590|
|Cumulative net savings||$22,717,602||$25,088,504||$27,310,710|
Note: For a full explanation of previous years’ savings, this table should be read in conjunction with previous data matching annual reports.