Compliance package

Compliance package - prevention


1 July 2001 - New proof of identity system

September 2001 - Risk profiling pilot

What's New

An improvement to the proof of identity system will help reduce the incidence of identity fraud. This will involve improved administrative processes under which a customer's proof of identity (POI) is documented and validated by Centrelink. This approach will reduce the incidence of fraud associated with people using false or assumed identities.

A risk profiling pilot which will create a profile of clients at high risk of being incorrectly paid based on historical characteristics. It will allow for the identification of people at risk of being overpaid and will allow Centrelink to better target contacts with clients. The risk profiling will centre on identified risks to correct payment and other outcomes. The pilot will focus on risks associated with failure to declare income or assets and of becoming long-term unemployed.


Customers are currently required to produce documentation to prove their identity to Centrelink when claiming a payment. The proof of identity (POI) measure will ensure that these documents are properly recorded on Centrelink's systems and facilitate validation of the documents. Arrangements will remain in place for clients who experience difficulty in providing adequate POI documentation.

This measure will enhance Centrelink's recording system to tighten POI processes and improve procedures to prevent opportunistic identity fraud. The measure will also further enhance the effectiveness of Centrelink's sophisticated computer detection methods to detect identity fraud.

The tiered POI model will be based on a points system (consistent with the well-established "100 Point" model), with documents being assigned values, and will result in an improved customer understanding and acceptance of Centrelink's POI policy procedures. In addition, the expected increase in consistency with the new POI model will result in more timely and more accurate assessments of customers' entitlements.

The risk profiling pilot will create a profile based on client characteristics. This will enable Centrelink to target interventions more effectively to achieve payment correctness and employment outcomes for clients. It will aid Centrelink in providing the best service available to clients.

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E2. Compliance package - detection


1 July 2001 - Data-matching with the ATO

1 July 2001 - Additional funding for processing of reviews resulting from tip-offs

What's New

Two initiatives will improve measures used to detect incorrect payment:

  • data-matching with the Australian Taxation Office (ATO) will identify Centrelink clients with undisclosed property assets and income; and
  • additional funding for increased reviews resulting from "tip-offs" from the public.


Undisclosed property assets were targeted in a feasibility study undertaken by Centrelink. The results indicated a significant risk of incorrect payments arising from the non-declaration of this type of asset.

As a result of this feasibility study, this measure was developed to help detect clients who have failed to provide information regarding assets and income in order to obtain social security assistance.

Around 20,000 clients will have their entitlements reviewed as a result of the data matching initiative. It is estimated that this will result in around 1100 cancellations, 4000 downward variations and 2900 debts.

As the general public's awareness of its ability to report fraudulent claims has risen so too has the need for additional funding to undertake reviews into possible fraudulent claims. These reviews have shown strong performance and the increased funding is expected to provide significant savings.

Funding will be provided to undertake an additional 20,000 reviews from 'tip-offs' already provided by the public. It is estimated that this will result in around 1,560 cancellations, 3,000 downward variations and 3,055 debts.

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E3. Compliance package - research and development


1 July 2001 – Feasibility study on matching ABN data

1 October 2001 – Feasibility study on matching group certificate data

2001-02 - Random sample surveys

What's New

Feasibility studies will be undertaken to assess the effectiveness of new data matching processes with the Australian Taxation Office (ATO) to identify undeclared income. These studies will assess the effectiveness of data matching with the ATO group certificate data and the Australian Business Number (ABN) as a control in the detection of employment income or income derived from operating a business which has not been declared to Centrelink.

Random Sample surveys of Centrelink clients receiving Carer Payment, Carer Allowance, Disability Support Pension, Parenting Payment (Single) and Parenting Payment (Partnered) will be undertaken to identify the level of, and reasons for, incorrect payment.

There will also be a review of existing deterrence measures and their effectiveness in reducing the incidence of social security fraud.


The data matching feasibility study will examine approximately 14,000 client records and match them with ATO databases including ABNs. It is estimated that this will result in around 1000 cancellations, 600 downward variations and 6,900 debts.

Random sample surveys have been undertaken in previous years to determine the extent of, and reasons for, incorrect payment. The random sample surveys in 2001-02 will examine a total of 10,000 clients across a number of payments. It is estimated that this will result in approximately 400 cancellations, 2000 downward variations and 1000 debts. These surveys will support the previous work in this area.

The review of the fraud deterrence framework will provide a high level analysis as to its effectiveness in deterring fraud in the Australian social security system and will take into account developments in international models and improvements in management information.

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