Australia’s welfare system 2015 Budget This is an important long-term investment which will assist the work in addressing Making Australia’s welfare system fairer, Government’s the challenges facing welfare system, Australia’s more effective, coherent and sustainable, the costs of administering the by reducing and encouraging people to work. system for taxpayers and helping to catch welfare cheats. The Investment Approach What was announced in This Investment Approach uses actuarial the 2015 Budget? valuations to identify risk factors driving long-term welfare dependency. It identifies risk factors that $66 million will be provided as a first step to are responsive to early effective intervention. overhaul of ICT system. Australia’s welfare This approach was proposed in the McClure Further, the government will provide $20.7 million welfare report. to implement an Investment Approach to welfare, and $13.1 million to continue four major The concept is similar to the way insurance longitudinal studies. companies predict risk. The funding will support an annual actuarial valuation to determine the This investment will achieve long-term estimated future costs of the welfare system, sustainability and targeted supports for the looking at past evidence and how people interact welfare system. with the welfare system. The Government will replace the Department of It would also examine the characteristics of system with a Human Services’ antiquated IT people currently receiving welfare to understand modern platform that can better deliver for who is most likely to have an extensive reliance customers and taxpayers. Customers will start on welfare over their lifetime. This allows better benefitting from this upgrade by the end of 2016. decisions to be made on where to focus Government investment and who to focus on for IT system the greatest return on investment. In this case, The Department of IT system Human Services’ groups at risk of long-term dependency and will be replaced in stages, with work to begin disadvantage can be identified. in July. The New Zealand experience has shown that The new system will be designed around the intervening and investing early can help prevent customer; ensuring people are more swiftly debilitating cycles of intergenerational welfare directed to the most appropriate services. It will dependence. In New Zealand, the liability of the also maximise the benefits of e-Government. welfare system has been reduced by $7.5 billion.
Australia’s welfare system 2015 Budget Making Australia’s welfare system fairer, more effective, coherent and sustainable, and encouraging people to work. What was announced in the 2015 Budget? $66 million will be provided as a first step to overhaul of Australia’s welfare ICT system. Further, the government will provide $20.7 million to implement an Investment Approach to welfare, and $13.1 million to continue four major longitudinal studies. This investment will achieve long-term sustainability and targeted supports for the welfare system. The Government will replace the Department of Human Services’ antiquated IT system with a modern platform that can better deliver for customers and taxpayers. Customers will start benefitting from this upgrade by the end of 2016. IT system The Department of Human Services’ IT system will be replaced in stages, with work to begin in July. The new system will be designed around the customer; ensuring people are more swiftly directed to the most appropriate services. It will also maximise the benefits of e-Government. This is an important long-term investment which will assist the Government’s work in addressing the challenges facing Australia’s welfare system, by reducing the costs of administering the system for taxpayers and helping to catch welfare cheats. The Investment Approach This Investment Approach uses actuarial valuations to identify risk factors driving long-term welfare dependency. It identifies risk factors that are responsive to early effective intervention. This approach was proposed in the McClure welfare report. The concept is similar to the way insurance companies predict risk. The funding will support an annual actuarial valuation to determine the estimated future costs of the welfare system, looking at past evidence and how people interact with the welfare system. It would also examine the characteristics of people currently receiving welfare to understand who is most likely to have an extensive reliance on welfare over their lifetime. This allows better decisions to be made on where to focus Government investment and who to focus on for the greatest return on investment. In this case, groups at risk of long-term dependency and disadvantage can be identified. The New Zealand experience has shown that intervening and investing early can help prevent debilitating cycles of intergenerational welfare dependence. In New Zealand, the liability of the welfare system has been reduced by $7.5 billion.
2015_budget_fact_sheet_-_australias_welfare_system_-_final.docx