FOI: LEX25069
PROGRAM PROTOCOL
Data Matching between Department of Human Services
and the Australian Taxation Office
‘Non-Employment Income Data Matching - NEIDM’
August 2016
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Table of Contents
Table of Contents .......................................................................................................................... 2
1. Description of the Program Protocol ................................................................................... 3
1.1
Purpose ............................................................................................................................ 3
1.2
Requirement for a Program Protocol ................................................................................. 3
1.3
Definition of Data Matching ............................................................................................... 3
2.
Description of the Data Matching Program ......................................................................... 4
2.1
Summary of the program .................................................................................................. 4
3.
Agencies Involved ................................................................................................................. 5
3.1
Source Agencies ............................................................................................................... 5
3.2
Matching Agency .............................................................................................................. 5
3.3 PRIMARY USER AGENCY ............................................................................................... 5
4.
Data Issues ............................................................................................................................ 5
4.1
Data Quality ...................................................................................................................... 5
4.2
Data Integrity .................................................................................................................... 6
4.3
Data Security .................................................................................................................... 6
5.
The Matching Process .......................................................................................................... 7
6.
Action Resulting from the Program ..................................................................................... 8
7.
Time Limits Applying to the Program .................................................................................. 8
8. Public Notice of the Program ................................................................................................... 8
9.
Reasons for Conducting the Program ................................................................................. 8
9.1
Relationship with the agencies lawful functions ................................................................. 8
9.2
Social Considerations ....................................................................................................... 9
10.
Legal Authority ................................................................................................................... 9
10.1
DHS .............................................................................................................................. 9
10.2
ATO............................................................................................................................... 9
11.
Disclosure of Information Provisions ............................................................................. 10
11.1
DHS and ATO ............................................................................................................. 10
12. Alternative Methods ............................................................................................................ 10
13.
Pilot/Prior Data Match Programs ..................................................................................... 11
14.
Costs and Benefits ........................................................................................................... 11
Appendix A - Technical standards report ................................................................................. 12
Appendix B – Public notification ............................................................................................... 21
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1. Description of the Program Protocol
1.1
PURPOSE
The purpose of the program protocol is to:
(i)
identify the matching agency and the source agency;
(ii)
detail the direct relationship of the program to the performance of the lawful
functions or activities of the matching agency;
(iii)
set out the legal basis for any collection, use or disclosure of personal information
involved in the program;
(iv)
outline the objectives of the program, the procedures to be employed, the nature
and frequency of the matching covered by the program and the justifications for it;
(v)
explain what methods other than data matching were available and why they
were rejected;
(vi)
detail any cost/benefit analysis or other measures of effectiveness, which were
taken into account in deciding to initiate the program;
(vii)
outline the technical controls proposed to ensure data quality, integrity and
security in the conduct of the program;
(viii) provide details of pilot/prior data matching program;
(ix)
outline the nature of the action proposed to be taken in relation to the results of the
program including any letters to be used by the agency involved;
(x)
indicate what form of notice is to be given, or is intended to be given to individuals
whose privacy is affected by the program; and
(xi)
specify any time limits on the conduct of the program.
1.2
REQUIREMENT FOR A PROGRAM PROTOCOL
The Information Commissioner’s
Guidelines on Data Matching in Australian Government
Administration specify that a program protocol be prepared by agencies conducting
certain data matching programs. These guidelines are voluntary. The Department of
Human Services (DHS) complies with these guidelines.
1.3
DEFINITION OF DATA MATCHING
Data matching is the comparison of two or more sets of data to identify similarities or
discrepancies. In the context of this protocol, the term data matching is used to denote the
use of computer techniques to compare data found in two or more computer files to
identify cases where there is a risk of incorrect payment.
DHS observes the
Australian Privacy Principles. Individuals who consider that an agency
has interfered with their privacy may complain to the Office of the Australian Information
Commissioner.
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2. Description of the Data Matching Program
2.1
SUMMARY OF THE PROGRAM
DHS delivers a range of programs for payments and services on behalf of the
Commonwealth. These payments and services are delivered in accordance with Business
Partnership Agreements with client departments.
To maintain the integrity of these payments and services, DHS undertakes compliance
activities to ensure ongoing entitlement and eligibility.
In the 2015-16 Mid-Year Economic and Fiscal Outlook (MYEFO), the Australian
Government announced the Non-Employment Income Data Matching (NEIDM) program.
The purpose of the NEIDM program is to identify non-compliant individuals requiring
administrative or investigative action. This is identified through the comparison of
information held by the Australian Taxation Office (ATO) and what customer have
reported to both agencies. The comparison is to identify where DHS customers may have
income recorded with the ATO that exceeds the income they have reported to DHS.
The program is a phased project addressing non-declared and under-declared income
while delivering an enhanced online compliance intervention capability. The first phase of
the project involves approximately 20,000 compliance interventions that will rely on DHS’s
current manual letter process. Later phases of the project will involve the online
interaction with customers. This allows DHS to provide more detail to its customers and
empower them to respond in an informed manner. It also allows DHS to address non-
compliance in a more efficient manner in instances where customers choose not to
participate.
This program protocol covers the first phase of the program and will be updated prior to
the commencement of the later phases to address elements of the subsequent phases
such as the online compliance capability.
2.2 OBJECTIVES
The objectives of this matching program are to:
• Ensure that Centrelink payments are only made to those individuals who are
entitled to receive them.
• Detect and address non-compliance.
• Provide net savings by detecting overpayments and recovering debt.
• Develop an efficient online mechanism for customers to respond to suspected non-
compliance.
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3. Agencies Involved
3.1
SOURCE AGENCIES
The source agencies that supply data for the purposes of this program are:
• DHS
• ATO
3.2
MATCHING AGENCY
The key matching agency involved in this program is the ATO
DHS provide customer files to the ATO for identity matching.
3.3
PRIMARY USER AGENCY
DHS is the agency that makes most substantial use of the programs results. It
receives the matched data from the ATO to identify non-compliance.
4. Data Issues
4.1
DATA QUALITY
Poor quality data is of limited value in data matching. DHS will verify the integrity of the
data received for such things as correct format and that data is present in all the
mandatory fields.
Data quality mechanisms will include:
• the ATO only return high confidence match results to DHS.
• DHS will seek validation from the customer of any ATO income reported that may
be of relevance to welfare eligibility.
• where customers provide updated or corrected information, DHS takes this into
account when determining the type and need of administrative action.
DHS’s experience matching the same data with the same matching criteria shows an
extremely low number of instances of incorrect matching. Despite this, DHS has a well-
established process to deal with these instances and reduce or eliminate potential privacy
impacts.
To Support the NEIDM program DHS has formal programme and project governance
arrangements in place. This governance provides a formal reporting mechanism of all
data matching and issues including those related to privacy.
These governance arrangements consist of formal Compliance Programme and
Performance committees that oversee the department’s risk based Compliance
Programme. The committees consisting representatives responsible for aspect data
matching and the department’s actions resulting from the matching activity. Key decisions
and issues and performance reporting are controlled via these committees and formally
endorsed by departmental executives.
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Branches involved with data matching have a formal relationship with the DHS’s Privacy
and Information Release Branch to report and resolve privacy matters and data matching
incidents. The branch works in partnership with the Privacy and Information Release
Branch to collect and assess information on privacy issues relating to data matching.
4.2
DATA INTEGRITY
DHS maintains a high level of data integrity. Measures taken to maintain integrity levels
include designing systems that will not accept records that are incomplete, and identifying
and correcting records that have data items that are inadequate or corrupt.
4.3
DATA SECURITY
The ATO and DHS exchange data using the dedicated mainframe to mainframe Optus
Evolve link. This mechanism provides secure and trusted communications across
government jurisdictions.
The ATO data received by DHS is held in DHS’s secure Teradata and SAP HANA
environments. These are core systems that employ strict security controls. Only DHS
employees with a business need have access to view the ATO data provided under this
program.
DHS’s staff are subject to existing security controls and the confidentiality provisions of the
Social Security (Administration) Act 1999. Access to DHS’s computer centres is strictly
controlled and entry properly authorised. DHS’s security system provides protection and
control of dataset access and system entry and program integrity. Security features
include logon identification codes, passwords and security groupings to ensure that
access to information is on a needs-only basis.
The ATO is responsible for its own security with respect to its staff and access to the data
provided by DHS. The ATO are subject to existing security controls and subject to the
Privacy Act 1988, the Crimes Act 1914 and the Public Service Act 1999. Access to the
ATO’s computer systems is limited and is subject to requests for system access which
include reminders about privacy and security obligations. Security features include logon
identification codes and passwords. All access to the system is monitored and logged.
Existing security arrangements in the department automatically log user access to data
files.
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5. The Matching Process
The identity data matching of the two information sources is conducted by the ATO.
The output of this matching is provided to DHS as ‘matched’ records.
DHS uses these matched records to identify customers, who may have income that has
not been correctly declared to DHS.
The matching process will use various elements and/or combinations of the following
fields:
• Gender
• Surname
• First Name
• Other Given Name
• Year of Birth
• Month of Birth
• Day of Birth
• Address Line 1
• Address Line 2
• Locality
• Post Code
• State Code
To uphold an individual’s right to privacy, the resulting matches are only those where the
ATO records have the same identity details as DHS’s customers. In addition to this, DHS
only exchanges information for customers who:
• have received a payment within the relevant financial year.
• are partnered to a customer who has received a payment within the relevant
financial year.
• have an outstanding debt.
The ATO then provide Income Tax Return and Pay As You Go information only for these
specific matched records.
A technical standards report can be found at Appendix A
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6. Action Resulting from the Program
Following the provision of matched records from the ATO to DHS, DHS will apply
compliance risk rules. If a matched customer meets key risk criteria, the relevant
information will be referred to the customer for response.
When a customer disagrees with the information presented they are provided an
opportunity to adjust the information and provide supporting evidence. DHS takes this
information into account when determining administrative action.
When a customer doesn’t provide a response within the specified time, DHS makes the
determination of appropriate administrative action based on the information provided by
the ATO.
7. Time Limits Applying to the Program
The first matching exercise is intended to be conducted in August 2016 and thereafter
occur on a bi-annual basis.
DHS does not intend to create a permanent register or database on matched or non-
matched selections as part of this protocol.
8. Public Notice of the Program
There has been several public references and announcements for the NEIDM program
which includes stating it involves ‘income data matching’.
While DHS has no objections to publicising high level details of this program and
submitting an appropriate gazettal notice. Advertising the specific details of the program,
such as matching criteria and risk profiles, would inform individuals of possible avoidance
techniques they would need to employ to evade detection and may make detection more
difficult.
A copy of the Public Notice can be found at Appendix B.
9. Reasons for Conducting the Program
9.1
RELATIONSHIP WITH THE AGENCIES LAWFUL FUNCTIONS
The program is related to the DHS’s lawful function of limiting payments to those eligible
under relevant legislation. The
Social Security Act 1991 and the
Social Security
(Administration) Act 1999 provide that customers are required to be eligible for payment.
These requirements are given to customers in a written advice authorised under different
sections of these Acts for different payment types.
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9.2
SOCIAL CONSIDERATIONS
Welfare is often topical and of interest to the media and the general public. There are
some key social issues associated with the measure:
• that only persons entitled to receive payments from DHS do so and they receive
correct entitlements
• An individual’s right to privacy is protected.
Aligned to those issues is a concern for social justice. In particular, there is strong support
in the community for an income support system that directs available funds and services
to those most in need of assistance. The program helps to achieve this in two ways:
• By strengthening controls in the DHS ’s payment systems, it reduces the outlays
from DHS’s programs (this provides funds for the Government to direct to other
priorities); and
• The existence of effective controls in payment systems soon becomes evident to
the community and rapidly increases voluntary compliance.
Suitable safeguards against unreasonable intrusion into the privacy of individuals are built
into the data matching arrangements. Matching is conducted in accordance with the
Privacy Commissioner’s Guidelines on Data Matching in Australian Government
Administration
.
When comparing the NEIDM program to DHS’s existing data matching activity, the NEIDM
program reduces the amount of information disclosures and burden places on customer
and third parties.
10. Legal Authority
10.1 DHS
Section 192 of the
Social Security (Administration) Act 1999 provides that DHS may
require the provision of information of relevance to the assessment of claims for DHS’s
payments, including whether a payment is or was payable to the person who received it or
whether the rate is or was correct.
Section 195 of the
Social Security (Administration) Act 1999 provides that DHS may
require the provision of specified information that relates to a class of people. This section
authorises DHS to request data about customers.
Australian Privacy Principle 6 (APP 6) does not limit the disclosure of personal information
by an agency where that disclosure is required or authorised by or under law. As the ATO
information involved in this data matching program is obtained by DHS under
Schedule 1
Item, 1 of Table 1 of the Taxation Administration Act 1953, APP 6 does not limit its
disclosure to DHS.
10.2 ATO
The ATO legislation allows the ATO to disclose ATO information to an Agency Head
(within the meaning of the Public Service Act 1999) of an agency (within the meaning of
that Act) dealing with matters relating to the social security law (within the meaning of
subsection 23(17) of the Social Security Act 1991) where is for the purpose of
administering that law (the Social Security Act 1991).
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11. Disclosure of Information Provisions
11.1 DHS AND ATO
DHS view the NEIDM program as a positive step in continuing to increase it transparency
in its data matching activity.
Under this program DHS will provide the actual data received from the ATO to the
customer. At the same time, the program reduces the amount of information disclosures
with third parties such as employers.
There is also reduced information disclosure of customer have to again provide income
related information to DHS that has already been provided to the ATO.
ATO only releases sufficient information to DHS to allow it to determine whether a
customer is eligible for payment and whether administrative action needs to be
considered.
12. Alternative Methods
Currently, DHS undertakes similar matching to this program under the
Data-matching
Program (Assistance and Tax) Act 1990. (DMP). While the DMP addresses similar
compliance risks, restriction of the Act has meant overtime, that DHS haven’t been able to
introduce efficiencies developed in other matching programs. This has led to DHS’s
activity under the DMP to become inefficient for customers and third parties as well as
DHS itself when compared to the other compliance activity.
The NEIDM program not only opens the door for DHS to recognise efficiencies, it will form
part of DHS’s innovative compliance platform for the future. DHS’s will be able to address
significantly more non-compliance and do so by empowering customers with more
information.
It is not possible to conduct this type of compliance activity without the exchange and
matching of data. The NEIDM program represent the most efficient and effective
alternative to address compliance related to un/under-declared income.
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13. Pilot/Prior Data Match Programs
DHS and the ATO have been working in partnership to conduct data matching for more
than two decades.
The ATO and DHS participate in data matching activity under the Data-matching Program
(Assistance and Tax) Act 1990. There are several other data matching programs that the
two agencies conduct which include the same data in this program.
The NEIDM program uses the same data and matching routines as several previous
programs with the significant difference being the combination of two ATO sources
(ITR and PAYG) into one program.
This allows DHS to provide more detail to its customers and empower them to respond in
an informed manner. It also allows DHS to address non-compliance in a more efficient
manner in instances where customers choose not to participate.
14. Costs and Benefits
As announced in the MYEFO, the NEIDM program is expected to return over $300M in
savings for the first year from approximately 80,000 interventions. The 20,000 manual
interventions covered by this program protocol represent a significant proportion of the
first year’s activity.
In additional to the quantitative benefits, the NEIDM program will allow DHS to address
significantly more non-compliance with customers. Overtime this will lead to more
preventative approaches and increase voluntary compliance and reduce debt.
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B. Matching Techniques
Identify Matching
The identity data matching of the two information sources is conducted by the ATO.
The output of this matching is provided to DHS as the ‘matched’ records.
DHS target customers where there is a discrepancy between income declared to the ATO
and income declared to DHS.
This could be -
A) Customer and Spouse
B) Spouse but not customer
C) Customer but not spouse
How DHS detect the discrepancy depends on the information gathered. DHS may have to
use different business rules to obtain an accurate and valid result.
Income Matching
Information is extracted from the DHS Enterprise Data Warehouse for both current and
the target financial years
• declared earnings
• compensation payments
• other government payments
• business, real estate or other income and / or payments
• partner relationship history
• student course history
• Centrelink payment and debt history
• demographic data as required
Algorithms are applied to this data to calculate totals for each financial year required.
Where a Customer or Spouse is identified as having a discrepancy, the selected case will
then be loaded into our core systems for compliance action.
C. Risks
Incorrect identity matches
The ATO uses sophisticated identity matching techniques to ensure they identify the
correct taxpayer from data provide by DHS. This technique uses multiple details to obtain
an identity match. For example, where a Customer Reference Number (CRN), name,
address and date of birth are available all items are used in the identity matching process.
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Very high confidence matches will occur where all fields are matched to a taxpayer in ATO
systems. Additional manual processes may be undertaken where high confidence identity
matches do not occur.
D. Data quality controls and audit
When compliance action is proposed, additional checks will take place to ensure the
correct DHS customer or spouse has been identified. DHS Customers will be provided
with the opportunity to verify the accuracy of the information before any compliance action
is taken.
E. Security and confidentiality
All DHS computer systems are strictly controlled with features including:
• system access controls and security groupings
• login identification codes and password protection
• full audit trails of data files and system accesses
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Appendix B – Public notification
The Australian Government Department of Human Services
NOTICE OF A DATA MATCHING PROJECT
The Non Employment Income Data Matching (NEIDM) project is a data matching process which wil enable
the Department of Human Services (department) to match income data it col ects from customers with tax
return related data reported to the Australian Taxation Office (ATO).
The Taxation Administration Act 1953 authorises the ATO to provide relevant data to the department.
The NEIDM project wil assist the department to identify social welfare recipients who may not have
disclosed income and assets to the department. Data received from the ATO will be electronically matched
with certain departmental records to identify non-compliance with income or other reporting obligations.
The department expects to match each of the approximately 7 million unique records held in its Centrelink
database. Based on non-compliance criteria, the department anticipates it will examine approximately
20,000 records in the first phase of the project.
The department wil use customers’ information in the context of the NEIDM project to:
• verify the information reported to it by customers;
• identify social welfare recipients who may not have disclosed income to the department;
• match and validate the Tax Return and the Pay As You Go data sets;
• identify discrepancies in the income declared to the department by the customer; and
• consider whether the department will initiate relevant compliance action in relation to a particular
customer (including debt recovery or a referral to the Commonwealth Director of Public
Prosecutions).
The class of people who may be affected by the NEIDM project will include welfare recipients who have
lodged a Tax Return with the ATO during 2011 to 2014.
The department’s NEIDM project has been informed by the Office of the Australian Commissioner’s
Guidelines on Data Matching in Australian Government Administration. Those Guidelines include standards
for data matching activities to protect the privacy of individuals. The department has prepared a program
protocol which describes the NEIDM project, in accordance with those Guidelines. Copies of the protocol
are available from:
Case Selection Section
Level 2
Louisa Lawson Building
25 Cowlishaw Street
Greenway ACT 2900
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