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New study finds Centrelink leads the way to stop fraud

Media Release

17 June 2011

THE HON BRENDAN O’CONNOR MP
MINISTER FOR HOME AFFAIRS AND JUSTICE

THE HON TANYA PLIBERSEK MP
MINISTER FOR HUMAN SERVICES

Minister for Justice Brendan O’Connor and Minister for Human Services Tanya Plibersek say a study released today shows that Centrelink is amongst world leaders in stopping welfare fraud.

The Australian Institute of Criminology report Detecting and Preventing Welfare Fraud shows sophisticated data-matching techniques and dob-ins by the public are helping to crack down on Centrelink fraud.

The report examines the suite of anti-fraud measures used by Centrelink including data analysis, tip offs, investigations and recovery actions.

The anti-fraud methods were compared with the strategies employed by other similar nations.

“The study found that Centrelink reflects international best practice in stopping welfare fraud against the taxpayer. That’s good news for Australian taxpayers,” Mr O’Connor said.

“Fraud against the Commonwealth is a significant concern and welfare payments are an area of vulnerability.

“It is disappointing that a minority of people seek to exploit a system that is designed to support people when they are having a tough time,” Mr O’Connor said.

“But it does happen and we must be constantly vigilant to ensure that taxpayers money is not wasted or inadvertently provided to people who are not entitled to payments,” he said.

Minister Plibersek said Centrelink’s successful anti-fraud measures involve public education campaigns about reporting rules, combined with prosecution and recovery of debts.

“While most Centrelink customers are honest and are in genuine need of assistance, unfortunately some people attempt to take advantage of the system,” Ms Plibersek said.

She said the first step in preventing fraud is ensuring people are aware of their entitlements and obligations – as well as the seriousness of breaching the rules.

“Data matching was introduced by the Labor Government in 1991 and continues to be highly effective in detecting inconsistencies in the information people provide to the government.

“Cross-checking ensures income provided by Centrelink is reflected in Australian Tax Office records and other sources,” she said.

Detecting and Preventing Welfare Fraud finds that in 2008-09:

  • Centrelink conducted four data-matching cycles, involving 53,643 reviews, resulting in the debt recovery actions totalling $112.5 million.
  • Tip offs, data-matching and other triggers led to 26,084 formal investigations of possible fraud and a further $113.4 million was recouped.
  • 5,082 matters were referred to the Commonwealth Director of Public Prosecutions. Of those cases, 3,388 cases were prosecuted with a conviction rate of 99%. The average saving was calculated at $4,347 per investigation.
  • There were 166 referrals for prosecution by Centrelink’s Identity Fraud Detection Team

Centrelink’s Identity Fraud Detection Team investigates identity fraud including offenders stealing, borrowing, fabricating or altering identity documents to obtain illegitimate payments. The team has advanced computer equipment and skills to detect fraudulent identities.

“The report also notes the latest initiatives in fraud detection and prevention, such as better initial applicant identification checks and more targeted communication about clients’ changed circumstances,” Ms Plibersek said.

“It is pleasing to see we have been successful with our identity verification procedures and our work to data-match with financial institutions.”

The report’s author Professor Tim Prenzler noted further investigation of the motivations of offenders would be useful to help identify the incentives for fraud.

Detecting and Preventing Welfare Fraud is available at www.aic.gov.au.  

Media Adviser: Jayne Stinson 0458 547 512 jayne.stinson@ag.gov.au
Media Adviser: Simon Crittle 0466 773 531 simon.crittle@humanservices.gov.au