The objective of the audit was to assess whether, in relation to appeals to the SSAT and the AAT, Centrelink undertakes its role effectively, so as to support the timely implementation of the Tribunals' decisions about customers' entitlements. In assessing Centrelink's performance, the ANAO examined whether:

  • the information provided by Centrelink, in relation to appeals to the SSAT and the AAT, effectively supported customers' and Tribunals' decision-making;
  • the relationships and administrative arrangements between Centrelink, DEEWR and FaHCSIA supported the effective management of the appeal process and the capture of issues that may have broader implications for legislation, policy and service delivery; and
  • Centrelink implemented SSAT and AAT decisions in an effective and timely manner.

The audit focused on the external review and appeal mechanisms and completes the cycle of audits on Centrelink's review and appeal system. The audit examined those appeals where an implementation action was required and did not consider SSAT and AAT appeals that were dismissed, withdrawn or were not within the Tribunals' jurisdiction.

Summary

Introduction

1. Centrelink has more than 6.8 million customers and each year makes millions of decisions about their entitlements. An incorrect decision can have economic or other impacts on a customer, especially those who are the most vulnerable in the community. Therefore, it is important that customers have access to a process for having decisions reviewed that they believe are incorrect. Having in place an effective review and appeal system aligns with Centrelink's Customer Service Charter[1] and Statement of Commitment.[2] Such a system is an essential mechanism for providing customers with an assurance that the right decision is made about their entitlements.

2. In 2009–10, customers requested reviews of, or appealed, 194 000 decisions. These appeals represent a minority of the decisions made by Centrelink, nonetheless, they are an important indicator to help Centrelink improve service delivery and detect systemic issues, and alert both Centrelink and the responsible policy departments to problems with the interpretation and implementation of legislation.

Internal and external review and appeal system

3. Customers have a legal right to have an entitlement decision made by Centrelink reviewed if they believe that the decision is incorrect.3 The internal review and appeal system has two steps:

  • The Original Decision Maker reconsideration: this is where the customer service officer who first made the decision reviews the case. This reconsideration is not a legal requirement and customers can choose to bypass this step and go directly to the next level of internal review.
  • The Authorised Review Officer review: Authorised Review Officers are Centrelink officers who provide the first statutory level of review by re-examining the Original Decision Maker decision.

4. If customers disagree with the outcome of the Authorised Review Officer review, they have rights of independent review. Customers can consecutively seek merits review by the Social Security Appeals Tribunal (SSAT) and by the Administrative Appeals Tribunal (AAT); then appeal to the Federal Court[4] on a question of law; and ultimately appeal by leave to the High Court. Figure S 1 illustrates the rights of review and appeal available to customers.

Figure S1 Social Security Review and Appeal Structure

Source: SSAT, Annual Report 2009–10, p. 13.

Social Security Appeals Tribunal and Administrative Appeals Tribunal

5. The SSAT is a statutory body within the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) portfolio. It is the first level of external review of decisions made by Centrelink (and since 1 January 2007, the Child Support Agency), regarding social security, family assistance, education and training, and child support payments.

6. The AAT is a statutory agency in the Attorney-General's portfolio which reviews a wide range of administrative decisions made by Australian Government ministers, departments, agencies, authorities and other Tribunals.[5] Appeals related to family assistance and social security decisions are the most common type of appeals lodged with the AAT and constituted 36 per cent of all lodgements in 2009–10.[6]

7. In considering an appeal, the SSAT and the AAT can:

  • set aside a decision: replace Centrelink's original decision with either a new decision or send the matter back to Centrelink for reconsideration;
  • vary a decision: change the original decision to some degree (which may be to the applicant's full or partial advantage or disadvantage); or
  • affirm a decision: confirm the original decision.

8. Figure S 2 describes the review and appeal system, outlining the volume of appeals to each Tribunal in 2009–10 and the type of decision.

Figure S 2 Appeals to the SSAT and the AAT, 2009–10

Source: ANAO analysis.
Notes: * Centrelink advice.
** SSAT, Annual Report 2009–10. Outcome percentages based on 14 226 decisions reviewed (an
application may include appeals against multiple decisions). ‘No jurisdiction/withdrawn’ include
cases returned to Centrelink for an initial review by an Authorised Review Officer, applications
withdrawn by the applicant and cases where one of the parties fails to comply with the Tribunal’s
proceedings.
^ AAT, Annual Report 2009–10. AAT appeals that were dismissed/withdrawn (55%) include
appeals which were settled between parties.
^^ SSAT, Annual Report 2009–10.

Centrelink's relationship with the Department of Education, Employment and Workplace Relations (DEEWR) and FaHCSIA

9. Centrelink, as a service delivery agency, is responsible for the administration of a range of Commonwealth payments that in 2009–10 totalled over $85 billion. DEEWR and FaHCSIA are the departments responsible for the development of policy relating to the three payment types that generate the largest number of appeals to the SSAT and the AAT (Newstart Allowance, Disability Support Pension and Age Pension). Centrelink acts as the delegate of the Secretaries of DEEWR and FaHCSIA in managing appeal cases arising from decisions made by Centrelink under the social security and family assistance laws. The two departments, however, retain a decision-making and oversight role in relation to Centrelink's activities in conducting these appeals.

Audit objective, criteria and scope

10. The objective of the audit was to assess whether, in relation to appeals to the SSAT and the AAT, Centrelink undertakes its role effectively, so as to support the timely implementation of the Tribunals' decisions about customers' entitlements. In assessing Centrelink's performance, the ANAO examined whether:

  • the information provided by Centrelink, in relation to appeals to the SSAT and the AAT, effectively supported customers' and Tribunals' decision-making;
  • the relationships and administrative arrangements between Centrelink, DEEWR and FaHCSIA supported the effective management of the appeal process and the capture of issues that may have broader implications for legislation, policy and service delivery; and
  • Centrelink implemented SSAT and AAT decisions in an effective and timely manner.

11. The audit focused on the external review and appeal mechanisms and completes the cycle of audits on Centrelink's review and appeal system.[7] The audit examined those appeals where an implementation action was required and did not consider SSAT and AAT appeals that were dismissed, withdrawn or were not within the Tribunals' jurisdiction.

Overall Conclusion

12. In making over $85 billion in payments, Centrelink makes millions of decisions on an annual basis relating to customer entitlements. Only a small number of these decisions are appealed. In 2009–10, 11 203 and 2322 cases were appealed to the SSAT and AAT respectively. Nonetheless, the effective operation of the review and appeal process is an important feature of the Australian social security system and Centrelink customers are entitled to expect that decisions about their entitlements are correct and, in cases where they believe incorrect decisions have been made, have access to appropriate review and appeal mechanisms.

13. As part of the review and appeal process, Centrelink is required to: inform customers of their rights; provide information to customers and the Tribunals during the process; work with DEEWR and FaHCSIA in representing the Commonwealth's interest; and implement Tribunal decisions in a timely manner. In undertaking these roles, Centrelink and the policy departments have a duty to behave ethically, fairly and honestly.[8]

14. Centrelink has an established framework for managing its role in the review and appeal process. The framework supports Centrelink to meet external requirements and achieve organisational goals such as those outlined in the Customer Service Charter and Statement of Commitment. As part of the approach to the review and appeal process, Centrelink provides customers with access to information about their appeal rights; has professional working relationships with the SSAT and AAT; provides information to the Tribunals in a timely manner; and has developed processes, in conjunction with DEEWR and FaHCSIA, to manage appeals and capture many of the implications for legislation, policy and service delivery from Tribunal decisions. These arrangements have helped facilitate an improvement in the time taken to implement the Tribunals' decisions—with the average time taken to implement SSAT and AAT decisions during the period 1 July 2008 to 30 June 2010 being 26.6 days and 20.7 days respectively.

15. Notwithstanding Centrelink's work in building and utilising this framework, there remain areas where it could improve its practices so as to better meet the needs of stakeholders, particularly customers. Opportunities for improvement exist in relation to the clarity, relevance and completeness of information provided to customers and the Tribunals; and the capture of insights from Tribunal decisions that affirm Centrelink decisions. Most importantly for customers, opportunities also exist to amend current business practices so as to bring about a timelier implementation of Tribunal decisions.

16. To assist Centrelink in its role in the process of appeal to the SSAT and the AAT, the ANAO has made three recommendations aimed at improving:

  • the clarity and relevance of information provided by Centrelink so as to better meet the needs of its customers and the Tribunals; and
  • the timeliness of Centrelink's implementation of the Tribunals' decisions by reviewing the approach to implementing different decision types and establishing a time standard for the implementation of decisions.

Key Findings

Communicating with customers (Chapter 2)

17. Centrelink has a legislative obligation to provide adequate information on its system of review and appeal.[9] Overall, the information provided by Centrelink, including those materials prepared for customers from diverse cultural and linguistic backgrounds and from Aboriginal and Torres Strait Islander backgrounds, meets this obligation. The information provided in letters of notification, however, which are Centrelink's key communication tool for advising customers of their entitlements, could be improved to better describe the internal review mechanisms and the respective roles of the Original Decision Maker and the Authorised Review Officer.

18. Centrelink uses Authorised Review Officer decision letters to advise customers who have sought an internal review of the outcome. These letters also provide information to assist a customer when deciding whether to appeal to the SSAT. Centrelink has an internal quality assurance process that indicates a high level of positive ratings in relation to the quality and clarity of Authorised Review Officer decision letters. These results, however, contrast with the views of stakeholders consulted during the audit. A number of stakeholders reported that the reasons provided in support of the Authorised Review Officer decision were often insufficient or lacking in clarity, which generated some adverse affects on the operation of the Tribunals and potentially on customers.

19. Undertaking research to better understand the information needs from a customer perspective, vis-à-vis the views of an experienced Centrelink officer gained through the internal quality assurance process, could help address stakeholder concerns and allow existing processes to be refined accordingly.

Providing information to the Tribunals (Chapter 3)

20. In conducting merits reviews, the SSAT and the AAT make new decisions. To assist in this process and help outline the details of a case under review, Centrelink is required to provide the Tribunals, in a timely manner, with supporting documents that are clear and relevant. There are legislative and administrative mechanisms (such as task cards for SSAT requirements) in place to support the process and define the requirements that Centrelink must meet to provide timely, quality documents. Overall, Centrelink provides documents to the Tribunals in a timely manner and continues to improve its performance in this respect.

21. A majority of the SSAT offices and AAT registries consulted during the audit reported that Centrelink did not always meet their expectations in relation to the provision of clear and relevant documents, and this impacted on workflow and decision-making processes. This issue has been identified by the quality assurance process (task card compliance audits) undertaken to assess the documents provided to the SSAT, which shows a highly variable performance across Centrelink's network. Currently, no such quality assurance process is in place for documents provided to the AAT, with feedback on quality relying on ongoing communication between the agencies.

22. Centrelink has recently implemented measures designed to improve its performance in this area. Upcoming task card compliance audits and ongoing consultations with the Tribunals will help assess the success of these measures and allow the development of strategies to improve the clarity and relevance of documents provided.

Agencies' administration of Tribunal decisions (Chapter 4)

23. A suite of integrated legal and administrative arrangements between Centrelink and the policy departments exists to support the management of the appeals process. These arrangements also provide for, in most cases, the identification and analysis of issues that may have a broader impact on service delivery, legislative interpretation and policy development.

24. Decisions that are affirmed by the SSAT, however, are not systematically reviewed in the same manner as other SSAT and AAT decisions. While these decisions are less likely than changed decisions to contain critical information, they may still include important insights for agencies, such as if the SSAT has used a different legal basis to reach a similar position.

Managing the decision implementation process (Chapter 5)

25. In most cases, customers who have appealed a decision to the SSAT or the AAT have been in the appeal process for many weeks or months. For the most vulnerable, this may create a situation of financial insecurity, and it is important that the implementation of a decision, particularly one in their favour, is not unduly delayed. In that respect, based on an analysis of Tribunal decisions made between 1 July 2008 and 30 June 2010, 30 per cent of SSAT customers and 18 per cent of AAT customers waited more than 30 days to have their decision implemented. During the implementation process, customers are not informed of the status of their case unless they initiate contact with Centrelink.

26. The time taken to implement a decision can be divided into two parts: consideration of whether to appeal a decision to the next stage in the process (Centrelink has 28 days from a decision to lodge an appeal to the next level of review); and a Centrelink officer, the Original Decision Maker, giving effect to decisions in those cases where an appeal is not pursued.

Appeal consideration

27. In determining the most appropriate course of action, there are a range of considerations for Centrelink to assess, including the facts of the individual case and the financial circumstances of the customer. The appeal consideration process has been developed to enable Centrelink, DEEWR and FaHCSIA to have assurance that the decisions they may want to appeal are identified and reviewed. This approach is supported by legal advice obtained by the agencies which indicates that the implementation of a decision can be delayed while genuine consideration is given on whether to appeal or seek a stay of the operation of a decision.

28. Only a minority of SSAT and AAT decisions are ultimately appealed by Centrelink—in 2009–10, two per cent of SSAT decisions and 0.2 per cent of AAT decisions—with the time taken to consider appeal varying considerably between SSAT and AAT decisions. The majority of AAT decisions (61 per cent) were sent for implementation by the Original Decision Maker (following a decision not to appeal) within one to five days. Appeal considerations for SSAT decisions were more evenly spread over time, with 50 per cent of decisions sent for implementation within 15 days. The variability in the time taken to determine whether to appeal a case, combined with the fact that only a minority of cases will ultimately be appealed, indicates that processes relating to the consideration of appeal could be streamlined.

29. From Centrelink's perspective, the approach adopted provides time to consider each case and determine whether to appeal a decision. However, it also has the potential to adversely affect the majority of customers who have had a decision made in their favour by the Tribunals. Given the majority of SSAT and AAT decisions will not be appealed, greater emphasis on the early identification of decisions with characteristics which may lead to them being considered for further appeal would allow the remaining majority of SSAT and AAT decisions to be progressed to the implementation phase in a timelier manner, and minimise the financial impact on customers.

Implementing Tribunal decisions

30. Original Decision Makers do not have a set timeframe to implement Tribunal decisions. An analysis of the Original Decision Makers' implementation of decisions shows that 57 per cent of SSAT decisions and 51 per cent of AAT decisions were implemented within five days of receiving the decision. However, a significant proportion of decisions, 23 per cent of SSAT decisions and 30 per cent of AAT decisions, had not been implemented after ten days. Some cases are more complex to implement than others and this can impact on the time taken to complete the process. In certain circumstances, complex calculations or additional information is required to be provided by customers or third parties (for instance a valuation office or a medical practitioner). While Centrelink needs to take account of the circumstances and information required to implement a Tribunal decision, the absence of a clear time standard for implementation of Tribunal decisions creates a risk that some of the decisions take a longer period of time to implement, with adverse financial consequences for the customers.

Summary of agency responses

Centrelink

31. Centrelink welcomes this report and considers that implementation of its recommendations will build on and enhance our ongoing work to improve the internal review process.

32. Centrelink agrees with the recommendations in the report.

Department of Education, Employment and Workplace Relations

33. The Department of Education, Employment and Workplace Relations (DEEWR) welcomes the ANAO's finding that Centrelink has established a framework for managing its role in the review and appeal process which supports Centrelink to meet external requirements and achieve organisational goals. The department notes that the ANAO has identified areas where Centrelink could improve its practices so as to better meet the needs of stakeholders.

34. DEEWR accepts all of the ANAO's recommendations and notes those directed to other agencies, and is of the view that these will strengthen procedures in relation to Centrelink's role in the process of appeal to the Social Security Appeals Tribunal (SSAT) and to the Administrative Appeal Tribunal (AAT). The department will work with Centrelink, as appropriate, to implement the recommendations.

35. DEEWR agrees with all of the recommendations in the report.

36. DEEWR's full response appears in Appendix 1 of the report.

Department of Families, Housing, Community Services and Indigenous Affairs

37. FaHCSIA appreciates the opportunity to respond to the ANAO proposed report: Centrelink's Role in the Process of Appeal to the Social Security Appeals Tribunal and the Administrative Appeals Tribunal.

38. By identifying the type of decisions likely to be appealed, the prompt implementation of decisions that are unlikely to be appealed will reduce the potential for impact on customers in receipt of FaHCSIA payments.

39. FaHCSIA will support Centrelink to improve the timely implementation of tribunal decisions and will support them in monitoring performance against an agreed standard.

Footnotes

[1] Centrelink, What you can expect from Centrelink – Centrelink's Customer Service Charter, 2010, [internet] <http://www.centrelink.gov.au/internet/internet.nsf/filestores/co301a_1003/$file/co301a_1003en.pdf>, [accessed 12 November 2010].

[2] Centrelink, Centrelink's Statement of Commitment to Listening and Responding to Customer Feedback, (no date), [internet] <http://www.centrelink.gov.au/internet/internet.nsf/publications/statemen..., [accessed 12 November 2010].

[3] Part 4 (Divisions 3 and 4) of the Social Security (Administration) Act 1999 prescribes internal review processes, and the processes for external reviews by the SSAT and the AAT. The A New Tax System (Family Assistance) (Administration) Act 1999 and the Administrative Appeals Tribunal Act 1975 also have provisions for the review of decisions.

[4] An appeal can be transferred by the Federal Court to the Federal Magistrates Court.

[5] The AAT can also review administrative decisions made by state government and non-government bodies in limited circumstances.

[6] Administrative Appeals Tribunal, Annual Report 2009–10, AAT, Canberra, 2009, p. 20.

[7] Centrelink's internal processes have been the subject of separate ANAO audit coverage in recent years: Audit Report No. 22 2008–09, Centrelink's Complaints Handling System; Audit Report No. 40 2006–07, Centrelink's Review and Appeals System Follow-up Audit; and Audit Report No. 35 2004–05, Centrelink's Review and Appeals System.

[8] These concepts are established in the Model Litigant Obligations, which form part of the Legal Services Directions issued by the Attorney-General and with which agencies subject to the Financial Management and Accountability Act 1997, such as Centrelink, DEEWR and FaHCSIA, must comply.

[9] Section 8 and Section 138(1)(a) of the Social Security (Administration) Act 1999.

 

 

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