Budget 2019: Changing the Social Security Income Assessment Model

adminBriefing papers, News & media

The new measure, “Changing the Social Security Income Assessment Model”, is intended to simplify and automate reporting obligations for people in receipt of income support payments who receive income from other sources. The assessment will change so that it is based on “income-received” rather than “income-earned” each fortnight.  Information about an income recipient’s income will also be automatically provided in real time from the person’s employer via the Australian Taxation Office to the Department of Human Services using the Single Touch Payroll program.

Brief overview

Subject to the passage of legislation from 1 July 2020, income support recipients will no longer be required to calculate and report their employment income based on the gross income they have earned each fortnight. Instead, income support recipients who are employed will be required to report income that is received each fortnight as reflected on their payslips.

The Single Touch Payroll program operates by using Standard Business Reporting enabled software. Most employers will be required to undertake real-time reporting to the Australian Tax Office of:

  • employee salary or wages,
  • ordinary time earnings,
  • payments withheld by an employer, and
  • superannuation contributions.

This information is created and reported along with other payroll functions undertaken by employers, such as generating payslips.

Through Single Touch Payroll data sharing arrangements, data held by the Australian Tax Office on an income support recipient’s  income will be shared with Department of Human Services. The shared data will be used by the Department of Human Services to accurately calculate the amount of income support payment  that the person is entitled to receive.

The Budget states that the measure will not change the eligibility criteria or the maximum rate of income support payments.

One of the stated intentions of the measure is to reduce the compliance burden for people receiving income support payments by reducing the likelihood of over payments and debt repayments.

When will the measure be implemented?

The Australian Tax Office has been relying on the Single Touch Payroll program since late 2015, following the passing of the Budget (Omnibus) Savings Act 2016, to reduce duplication and streamline processes.

From 1 July 2020, income data received through an expansion of Single Touch Payroll data-sharing arrangements will be shared with the Department of Human Services on a fortnightly basis.

To expand the use of Single Touch Payroll to the Department of Human Services, legislation will need to be passed which will enable the Australian Tax Office to share data with the Department of Human Services.


This measure is consistent with government’s increasing reliance on sharing and matching data between government agencies.

Lessons learned from ‘Robodebt’

NSSRN welcomes any measure that simplifies reporting obligations and reduces social security over payments by ensuring that each person receives the rate of payment they are entitled to receive.

However, the lessons learned from the online compliance initiative, ‘Robodebt’, must be addressed before any new automation to the social security system is implemented, including the need to:

  • properly invest in fully developing the automated system, rather than only seeing it as a cost-saving measure,
  • rigorously test the automated system to ensure that it works reliably to generate data to support accurate decision-making,
  • ensure there is a fair and accessible mechanism for challenging the accuracy of any decisions made in reliance on the the automated system, and
  • effectively consult with people receiving income support payments and community organisations working to fully understand how the automated system will impact on disadvantaged and vulnerable people, and the stress that interacting with the system may cause.

Robodebt unfairly shifted the administrative burden to the income recipient to prove they did not have an over payment, when previously the onus would have been on the Department to prove the over payment existed. Any new measures relying on automation should ensure that this onus remains with the Department to take into account all data necessary to make accurate decisions.

More information needed on reporting obligations and data set

It is unclear from the wording of the measure in the Budget what obligations will remain for people receiving income support to report their income.

It is also unclear what specific data will be shared and for what period data will be reviewed. We are concerned about the potential for Single Touch Payroll data to be used retrospectively by the Department to raise debts. As listed above, appropriate development and system testing will be necessary to prevent a repeat of the problems experienced with the premature rollout of Robodebt.

Savings should be reinvested in social security

By automating reporting processes the Government intends to achieve savings of $2.1 billion over five years starting from 2018 – 2019.  We support the generation of savings from reduction of inefficiencies and costs, but not at the expense of sound decision-making and the well-being of society’s most disadvantaged and vulnerable. In NSSRN’s view the savings should be specifically redirected to improving Social Security programs rather than to general Budget repair and funding of policy priorities as stated in the Budget.

This factsheet was prepared by the National Social Security Rights Network (NSSRN). The NSSRN is the peak community organisation in the area of income support law, policy and administration. NSSRN members are community legal centres across Australia which provide free and independent legal assistance to people experiencing issues with social security and family assistance payments.

April 2019