Services Australia portfolio

On 1 July 2025, the responsibilities for Services Australia moved from the Social Services portfolio to the Finance portfolio.   Services Australia is the Australian Government’s primary payment and service delivery provider and delivers a range of payments and services to support individuals, families and communities, as well as providers and businesses. These include income support payments and services, aged care payments, Medicare payments and services, child support services and a range of Information Community and Technology (ICT) functionalities for Australian Government departments and agencies. Further information is available from Services Australia’s website.

In the 2026–27 Portfolio Budget Statements (PBS) for the Social Services portfolio, the aggregated budgeted expenses for Services Australia for 2026–27 total $8.5 billion. The PBS contain budgets for those entities in the general government sector (GGS) that receive appropriations directly or indirectly through annual appropriation Acts.

The level of budgeted departmental   and administered   expenses, and the average staffing level are shown in Figure 1. Departmental expenses are the most material component representing 73 per cent of the total budgeted expenses.

Figure 1: Services Australia – total expenses and average staffing level by entity

Source: ANAO analysis of 2026–27 Portfolio Budget Statements.

In determining the 2026–27 audit work program, the ANAO considers prior-year audit and other review findings and what these indicate about portfolio risks and areas for improvement. The ANAO also considers emerging risks from new investments or changes in the operating environment. The ANAO had regard to the final report of the capability review of Services Australia that was endorsed by the Australian Public Service Commissioner in December 2024. 

The primary risks identified by the ANAO for Services Australia relate to the integrity and lawfulness of decision making, maintaining operational and workforce capability to meet customer needs when there is a reduction in funding, regulation, risk management, cyber security and effective project management for ICT systems. Timely and effective delivery of Services Australia’s modernisation agenda, ICT reforms and compliance programs is required to maintain the integrity of the services and payments which Services Australia manages on behalf of the Australian Government.

Specific risks in Services Australia relate to governance, service delivery, procurement, regulation and asset management and sustainment.

Governance

Audit work   and the findings of the Royal Commission into the Robodebt Scheme and the Commonwealth Ombudsman’s own motion review into income apportionment   have highlighted issues with program governance, engaging with risk at senior levels, lawfulness of decision making and relationships with policy entities.

Fit for purpose bilateral arrangements, timely performance monitoring and reporting and the proactive management of shared risks are required for Services Australia to maintain effective relationships with policy entities and balance competing priorities across the services and payments it delivers for the Australian Government.   Policy entities and entities receiving corporate shared services require timely, reliable and complete access to information from ICT systems to meet legislative and policy requirements. 

Services Australia delivers programs through a large number of ICT systems.   Information Technology (IT) control weaknesses increase the risk of fraudulent, unauthorised or erroneous transactions being processed, and increase the risk of such transactions not being detected in a timely manner.   There are also dependencies on appropriate governance of the ICT environment to ensure accurate payments and business continuity.

The volume and sensitivity of the personal and business information held by Services Australia requires the prompt identification and remediation of cyber security vulnerabilities and robust information access and incident management processes. 

The scale and breadth of Service’s Australia’s remit pose challenges for its governance and delivery of services. Factors that increase complexity of Services Australia’s governance and delivery include the number of staff and locations that it operates in, entities that it delivers services on behalf of and to, and legislation and policy that it must implement.

Service delivery

Strategic management of resources and improvements to the reliability of information sources and the methodology for its performance reporting are essential to demonstrate achievement of the agency’s purpose and meet service delivery requirements. 

Over the forward estimates period to 2029–30, Services Australia’s departmental resourcing reduces by $1.4 billion (23 per cent) due to the impact of terminating budget measures. A continued focus on operational capability will be essential to ensure it can support the continued delivery of its wide range of services. 

A priority for Services Australia is improving the digital service offer and welfare payment infrastructure through projects and investment in core technology enablers. Services Australia faces challenges around the effective implementation of new ICT systems while also maintaining the entity’s current ICT infrastructure, including implementing legislative and policy changes. To address these challenges Services Australia planned to develop a 10-year ICT Architecture Strategy and Plan.

The delivery of payments and services on behalf of policy entities places a responsibility on Services Australia to provide adequate assurance in relation to its management of fraud and payment integrity risks to support policy entities meeting their responsibilities under the Public Governance, Performance and Accountability Act 2013 (PGPA Act). 

Advancements in digital technology, such as artificial intelligence, offer significant opportunities for service delivery improvements, but can also present risks of digital exclusion. Services Australia needs to ensure services remain inclusive and responsive to diverse cultural, individual, geographic and accessibility needs, so customers are not left behind as service models become increasingly digital. 

Services Australia’s performance framework has a strong focus on its customers. Performance results for customer service delivery and satisfaction in 2023-24 and 2024-25 did not meet all targets. Targets for ‘customer serviced within 15 minutes’ and ‘customer satisfaction’ results were not met in either year. While additional resourcing led to the target for ‘work processed within timeliness standards’ being achieved in 2024-25, reductions in departmental resources from terminating measures will impact results in future years. 

With service centre visits exceeding 10 million annually since 2022–23, ensuring the physical safety of staff and customers, particularly in isolated locations, is critical to achieving Services Australia’s core mandate of delivering high-quality and accessible government services and payments. A Security Risk Management Review published in July 2023 found risks in Services Australia’s security and safety practices. In the 2024–25 Federal Budget, Services Australia was allocated $313.8 million over two years to enhance safety and security at service centres.

Services Australia has a responsibility to manage psychosocial safety of its staff and customers. Recognition and effective management of psychosocial risk is essential when engaging with customers. The Royal Commission into the Robodebt Scheme highlighted the potential impact on vulnerable customers of decisions made by Services Australia when administering payments and managing debts.

Procurement

Audit work and the ‘Independent Review of Services Australia and NDIA Procurement and Contracting’   report published in March 2023 identified weaknesses in compliance with the Commonwealth Procurement Rules, particularly in relation to demonstrating achievement of value for money and transparent decision making.   Each year Services Australia undertakes a significant number of procurements (in 2023-24 and 2024-25 Services Australia entered into 1945 and 2088 contracts with a total value of $1.9 billion and $1.7 billion, respectively). In 2025-26 Services Australia continued to transition its contact centre management services from Telstra to Optus. The contract is worth $589 million. Services Australia will need to manage risks related to this transition.

Regulation

Services Australia is responsible for monitoring, promoting and enforcing legislative compliance for the payments and services it delivers (including the identification, management and recovery of debt) on behalf of policy entities and its administration of the child support scheme. Effective regulatory approaches are required to maintain the public’s trust and achieve the desired outcomes, including through fraud detection and enforcement activities. Audit work has identified deficiencies in relation to the implementation of risk based and data driven strategies for regulatory activities, governance arrangements, compliance with procedural and legislative requirements, investigations and enforcement activities, and performance measurement and evaluation. 

Asset management and sustainment

Services Australia is continuing to undertake a major transformation and modernisation program across each of its service delivery channels – digital, face-to-face and telephony. Appropriate physical asset management includes consideration of asset risks, development of a strategic asset management strategy that is aligned to entity purposes and reporting against asset performance measures.

The ANAO’s performance audit activities involve the independent and objective assessment of all or part of an entity’s operations and administrative support systems. Performance audits may involve multiple entities and examine common aspects of administration or the joint administration of a program or service.

During the performance audit process, the ANAO gathers and analyses the evidence necessary to draw a conclusion on the audit objective. Audit conclusions can be grouped into four categories:

• unqualified;
• qualified (largely positive);
• qualified (partly positive); and
• adverse.

In the period between 2021–22 and 2025–26 Services Australia was included in 14 performance audits. The conclusions directed toward Services Australia were as follows:

• two were unqualified;
• four were qualified (largely positive);
• eight were qualified (partly positive); and
• none were adverse.

Figure 2 shows the number of audit conclusions for Services Australia that were included in ANAO performance audits between 2021–22 and 2025–26 compared with all audits tabled in this period.

Figure 2: Audit conclusions 2021–22 to 2025–26: Services Australia compared with all audits tabled

Source: ANAO data.

The ANAO’s annual audit work program is intended to deliver a mix of performance audits across seven audit activities: governance; service delivery; grants administration; procurement; policy development; regulation; and asset management and sustainment. These activities are intended to cover the scope of activities undertaken by the public sector. Each performance audit considers a primary audit activity. Figure 3 shows audit conclusions by primary audit activity for audits involving Services Australia.

Figure 3: Audit conclusions by activity for audits involving Services Australia, 2021–22 to 2025–26

Source: ANAO data.

Services Australia

Services Australia has responsibility for delivering a range of payments and services to support individuals, families and communities, as well as providers and businesses. These include income support payments and services, aged care payments, Medicare payments and services, and child support services. Social and health-related payments and services delivered by Services Australia on behalf of other entities are recognised within each of the individual policy agencies’ financial statements.

Services Australia’s total budgeted assets for 2026–27 are $6.7 billion, with 18 per cent of these assets attributable to child support receivables and 37 per cent attributable to land and buildings, encompassing right-of-use assets, as shown in Figure 4.

Figure 4: Services Australia’s total budgeted financial statements by category ($’000)

Source: ANAO analysis of 2026–27 Portfolio Budget Statements.

The engagement risk rating reflects the number and quantum of key areas of financial statements risk that will be a focus of the audit, as well as the: heightened public scrutiny and interest as a result of the Robodebt Royal Commission and other public reviews; significant IT and legal governance findings reported; and the role of Services Australia in delivery of the Australian Government’s health and social welfare benefits.

There are two key risks for Services Australia’s 2025–26 financial statements that the ANAO has highlighted for specific audit coverage. ANAO considers both risks potential key audit matters (KAMs).

• The valuation of receivables and payables related to the Child Support Program due to the value of child support payments yet to be paid by non-paying parents at the end of each financial year, which involves an actuarial estimation process, and requires significant judgement and assumptions. (KAM - Valuation of receivables and payables related to the Child Support Program)
• The recognition and impairment of intangible assets due to the complexities in capturing the actual costs of various internally developed software applications and consideration of the indicators of impairment to estimate the value of intangible assets in accordance with relevant accounting standards. (KAM – Recognition and impairment of intangible assets)