The power of the computer has caught up with hundreds of thousands of people who were illegally claiming welfare payments. Data from the Australian Taxation Office, Centrelink and the Department of Veterans’ Affairs was matched over the past three years. The data-matching identified 210,921 welfare cheats who then had payments reduced or cancelled. Many had to repay.
The total amount saved was $550 million.
It is a fairly impressive saving since the data-matching law came into force three years ago. There has been some concern about welfare-bashing and privacy, but these concerns should not deter the continuation of data-matching.
On the question of welfare-bashing, The Australian Council of Social Service quite right points out that for people who have fraudulently collected financial benefits, it serves them right if they are caught. In fact, it is hardly welfare-bashing to catch people who have means to support themselves, like the person on $40,000 a year claiming an unemployment benefit. Rather, it is bringing to book some fairly well-off individuals. There were other cases of people faking separation and claiming sole-parent allowances or using false identities. But ACOSS raises the question of people inadvertently claiming benefits to which they are not entitled and then facing the very difficult budgeting task of paying it back. One difficulty is that claimants have to estimate their income in advance when being means-tested – particularly for family allowances – and at the end of the financial year, they find that if they have under-estimated their income they will have been over-paid their welfare benefit.
In these circumstances there is no question of penalty or criminal sanction. But the money must be paid back. The Minister for Community Services, Senator Amanda Vanstone, says that Centrelink has flexible arrangements for this. Given that the Government should not waive over-payments unless there are some exception circumstances because it would create dangerous precedents, this seems fair enough.
ACCOSS asserts that the system of welfare payments is complex and that is the reason many people have inadvertently over-claimed. In fact, though, the Government simplified this system, reducing the number of payment schemes from more than 10 to about four.
On the privacy question, data-matching does not appear to match standard privacy principles. As part of the arrangement under which people receive support benefits, they agree that the Government can use information it has to check the validity of the claim.
The essential point is that data-matching has caught out some undeserving cases. The test for the Government is to ensure that the money saved is used to provide more support to those in need.
Further, if the Government wants to escape the charge of welfare bashing, it would be helpful to see some evidence of data-matching catching cheats at the big end of town. It would be good to see, for example, how data-matching of tax-file numbers with land-titles information and data held by the Australian Securities Investment Commission netting hundreds of millions of dollars in evaded capital gains taxes, undeclared dividends or taxes on earnings sent off-shore, for example.
To its credit the Government has appointed a Minister for Revenue – Helen Coonan. If the Minister for Dishing Money Out can get such an impressive result in catching cheats through data-matching, the onus is now of the Minister for Bringing Money In to get a similar result.