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Welfare rorters costing us $40 million

| 15.12,11. 11:10 PM |

 

Welfare rorters costing us $40 million

 

December 16, 2011
 
THOUSANDS of welfare rorters have dodged punishment and cost taxpayers millions after Centrelink failed to capitalise on a dramatic increase in tip-offs from the public.
In the latest blow to the agency after a series of damning inquiries, Centrelink suffered a $40 million slide in the amount of illegally claimed funds it recovered last financial year.

New figures suggest Australians are becoming more inclined to dob in mates, with a 10 per cent rise in people turning in family and friends for a total of almost 110,000 tip-offs last year.

But Centrelink turned the increased public support into less than half as many criminal prosecutions as recent years.

While almost 4000 people busted rorting the system had payments clipped in 2010-11, it was only half as many as the 8000 to 9000 annual payment reductions in recent years.

The federal government yesterday defended the results, insisting they were due to a deliberate new focus on more serious cases of fraud and the diversion of almost a third of compliance staff away from normal duties for three months for last summer's natural disasters.

Human Services Minister Brendan O'Connor said the regime was "effective" but as a new minister he would consider other measures to tighten it.

"The government is committed to pursuing fraud, focusing on the most serious cases," Mr O'Connor said. "That means more people who defraud the system deliberately, repeatedly and over long periods of time will be caught and punished, and their fraudulent gains will be returned to the community."

But the opposition seized on the data to raise more questions about Centrelink's fraud operations following damning reports in the past 18 months.

In March, the Commonwealth Ombudsman found "systemic weaknesses" with Centrelink after about half of more than 200,000 clients had their account decisions overturned due to bungles.

An Australian National Audit Office report also warned last year that Centrelink may suffer a "significant increase" in fraud after it stopped identifying clients properly to save money.

While the report was critical of Centrelink's focus on less serious cases to achieve performance benchmarks, the Commonwealth Director of Public Prosecutions warned the efficiency drive may have compromised prosecutions and the recovery of funds.

Opposition human services spokesman Kevin Andrews yesterday said while the floods would have had a small effect on the results, the sharp drop in funds recovered from rorters and the plummeting enforcement figures validated the systemic concerns raised by the reviews.

The figures show only 79 referrals were made to the CDPP after 2006 and 296 referrals in previous years.

While debts recovered were down $14 million year-on-year to $26.8 million, the agency also suffered a $26 million shortfall in savings made from reducing payments - dropping from $2.4 million a fortnight to $1.4 million a fortnight.

Telegraph



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