The scope of the audit covered Centrelink's emergency management framework and community recovery assistance operations in general, with a specific focus on the 2009 North Queensland floods and Victorian bushfires. FaHCSIA's role during those disaster events was also considered as it played a key role in establishing the policy parameters of the services Centrelink delivered and addressing issues arising from policy implementation.



1. An emergency is an event, actual or imminent, that endangers or threatens to endanger life, property or the environment, and requires a significant and coordinated response. An emergency becomes a disaster when the event causes significant destruction, disruption and/or distress to a community. Emergency management describes the range of controls and procedures for managing an emergency event.1

2. Under Australia's constitutional arrangements, state and territory governments have primary responsibility for emergency management within their jurisdictions and have laws, funding mechanisms and organisational arrangements in place to deal with such emergencies.2 The Australian Government assists state and territory governments by enhancing the support arrangements available and providing extra resources, such as financial assistance through the Natural Disaster Relief and Recovery Arrangements, as required.

Australian Government Disaster Recovery Arrangements

3. Australian Government advice and assistance for disaster recovery is coordinated through the Australian Government Disaster Recovery Arrangements. The Arrangements were developed, and are maintained, by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). FaHCSIA is the lead Australian Government agency for coordinating domestic, social and community disaster recovery, and has an ongoing role in the development of tailored assistance measures to support those affected by disasters both in Australia and overseas.

4. Assistance can include the Australian Government Disaster Recovery Payment (AGDRP) which provides one-off immediate financial assistance to individuals adversely affected by a major disaster. Ex gratia payments relating to specific hardship, such as lost income or funeral expenses, may also be made available to support people affected by a disaster.3

5. Centrelink is responsible for delivering services to people immediately following the occurrence of a disaster and then appropriately supporting them through the disaster recovery process. This includes the delivery of financial assistance (such as the AGDRP and ex gratia payments), providing case management services, and providing call centre overflow services for state and territory governments.

Audit objectives and scope

6. The objective of the audit was to:

(a) assess Centrelink's effectiveness in delivering financial assistance for community emergencies/disasters;

(b) examine Centrelink's ability to effectively respond to business disruptions caused by community emergencies/disasters; and

(c) identify opportunities for improvement in Centrelink's emergency management and community recovery assistance activities.

7. As part of the audit, the ANAO also reviewed Centrelink's progress in implementing recommendation No.11, relating to Centrelink's relationship with stakeholders during emergency preparation and responses, from ANAO Audit Report No.9 2003–04, Business Continuity Management and Emergency Management in Centrelink.4

8. The scope of the audit covered Centrelink's emergency management framework and community recovery assistance operations in general, with a specific focus on the 2009 North Queensland floods and Victorian bushfires. FaHCSIA's role during those disaster events was also considered as it played a key role in establishing the policy parameters of the services Centrelink delivered and addressing issues arising from policy implementation.

9. The scope of the audit did not include the business continuity aspects of Centrelink's framework for business continuity and emergency management, which were the subject of ANAO Audit Report No.46 2008–09, Business Continuity Management and Emergency Management in Centrelink. It also did not cover case management aspects of Centrelink's crisis response and recovery arrangements for the floods and bushfires.

Disaster responses reviewed for the audit

10. In conducting the audit, the ANAO had regard to a number of disaster responses including the November 2008 South East Queensland storms, and the May 2009 Northern New South Wales and South East Queensland floods. The audit, however, primarily focused on the responses to:

  • 2009 North Queensland floods—on 31 January 2009, Tropical Cyclone Ellie caused a rain depression in far North/Northern Queensland resulting in substantial flooding to townships between Townsville and Cairns. Over 3000 homes in the Ingham area were affected by the floods; and
  • 2009 Victorian bushfires—on 7 February 2009, ‘Black Saturday', Victoria suffered one of Australia's worst natural disasters when bushfires spread through a large number of towns and communities. In total, 173 people lost their lives, 2100 properties were destroyed or badly damaged, and over 400 000 hectares were burnt.

11. Given the devastation that was caused by the floods and the bushfires, the Australian Government responded by announcing, among other measures, recovery assistance packages to support those people who had been adversely affected by each disaster. Assistance provided by FaHCSIA and Centrelink on behalf of the Australian Government included:

  • delivery of the AGDRP ($1000 per adult and $400 per child);
  • delivery of the Income Recovery Subsidy (IRS) ex gratia payment, which provided assistance to employees, small business operators and farmers who had lost income as a result of the floods or bushfires. This subsidy provided fortnightly payments equivalent up to the maximum rate of Newstart Allowance depending on the person's circumstances. This assistance was offered for a period of 13 weeks5; and
  • delivery of the Funeral/Memorial ex gratia payment which provided a $5000 payment for funeral/memorial and related costs to one immediate family member for each individual who died or was declared missing as a direct result of the disaster.

12. In addition to direct financial assistance, Centrelink provided support to the Victorian State Government including: social work and case management services; call centre overflow services for the Victorian Bushfire Information Line; and support and recovery activities in Relief and Recovery Centres and Community Hubs.

13. The 2009 Victorian bushfires were a large scale disaster which occurred concurrently with the North Queensland floods. Significantly more financial assistance payments were made as a result of these disasters, compared to other disasters that occurred in recent years. During 2008–09 (noting that some payments continued to be made in 2009–10), Centrelink reported making AGDRP payments of approximately $46 million to 36 840 people affected by the floods and approximately $64 million to 56 165 people affected by the bushfires. In addition, Centrelink also delivered approximately $15 million in ex gratia assistance in the form of IRS and funeral/memorial payments.

Overall conclusion

14. FaHCSIA and Centrelink play key roles in the Australian Government's disaster recovery efforts through the development, coordination and delivery of assistance measures and services. Successive disaster events in 20086 and 20097 highlighted the significant resources and effort that is required of FaHCSIA and Centrelink in the delivery of recovery assistance. This was especially apparent in February 2009, when the agencies provided community recovery assistance in response to two major and concurrent natural disasters; namely floods in North Queensland and bushfires in Victoria.
15. In delivering the financial assistance and a range of other support and recovery activities to people affected by the floods and bushfires, Centrelink demonstrated that it has the capability to adapt its service delivery arrangements to effectively respond to disasters and Australian Government directions. Centrelink rapidly delivered over $110 million in financial assistance to approximately 93 000 people, as well as provided support services, such as case management, to meet the needs of communities affected by the disasters. The demand of responding to large scale concurrent disasters, however, along with increased demands on its service delivery network, affected Centrelink's capacity to manage the disruptions to its business-as-usual activities and to maintain its customer service obligations as outlined in its customer service charter.
16. Over the past decade, Centrelink's emergency management framework has been tested and refined through providing community recovery assistance in a range of disasters such as floods, fires, cyclones and bombings. While the majority of these events have involved single emergencies with contained impacts, the 2009 North Queensland floods and Victorian bushfires presented a different challenge and required Centrelink to respond to two major concurrent disasters, separated by a vast distance.
17. In responding, Centrelink was able to mobilise its workforce8, (including redeploying over 330 staff), and reprioritise operations where required. Notably, this coincided with a general period of increased demand for Centrelink services, primarily due to the deterioration in general economic conditions.9 The increased demands challenged the capacity of Centrelink to maintain its performance in delivering its customer service obligations. Due to the significant redeployment of Area staff and increased demand for business-as-usual services, service standards in areas such as queue times in Centrelink offices, and responding to phone calls at Centrelink call centres, were not achieved.10
18. Despite this, throughout the response to the floods and bushfires, Centrelink staff demonstrated a commitment to ensuring that people affected by the disasters were provided with support. Centrelink received relatively few complaints (102 as at 5 February 2010); the main concern raised was customers being unable to contact call centres. The ANAO also commissioned a qualitative research project to gain information and insights into the customer experience when claiming and receiving assistance from Centrelink. Participants were appreciative of the financial assistance provided to them following the disasters and commented on the quality of the assistance provided by Centrelink staff, who were seen as being ‘kind', ‘empathetic' and ‘helpful'.
19. Some of the service delivery arrangements implemented during the 2009 North Queensland floods and Victorian bushfires, which were aimed at responding to customer needs (such as reducing proof of identity requirements and making cash payments), were not within Centrelink's standard delivery arrangements. As such, these arrangements increased the risk of inappropriate claiming of disaster recovery payments. This highlighted the need to balance service delivery and payment integrity requirements in areas such as customer self-declaration, as well as the benefits of a planned rather than reactive approach where possible.
20. The total amount of disaster recovery assistance paid in 2008–09 (including for the North Queensland floods and Victorian bushfires) as reported by Centrelink, was inconsistent with the payment policies; that is, payments of either $1000 or $400. The capture of accurate financial and performance information assists to improve service delivery, identify areas of risk and fulfil public accountability obligations. The ANAO observed inconsistencies and limitations in the data captured and reported for 2008–09 disaster responses. This impacted on areas such as Centrelink's: ability to fully understand payment integrity risks (particularly involving customer self-declaration and payments processed without signatures); capacity to accurately measure payment processing times; and public reporting (different payment figures for the same disasters were listed in Centrelink's and FaHCSIA's 2008–09 annual reports).
21. Notwithstanding Centrelink's significant effort and effectiveness in delivering disaster recovery assistance, the response to the floods and bushfires highlighted some areas that could be improved so that Centrelink's emergency management capabilities can be deployed more effectively in the future. To address the identified areas, the ANAO has made four recommendations aimed at assisting Centrelink to build on its existing disaster response capability; covering:
  • preparedness for cross-Area and cross-geographical disasters;
  • enhancing assurance that the risks of the customer claims process are addressed;
  • capture and reporting of disaster recovery payment information; and
  • provision of information on recovery assistance measures available to members of the community affected by a disaster.

22. In April 2009, Centrelink commenced a post-implementation review (PIR) on the bushfire response. The review, undertaken by PricewaterhouseCoopers, made 23 recommendations, which are consistent with the findings and recommendations in this audit report. Centrelink is taking steps to address the recommendations of the PIR.

Key findings by chapter

Developing Policy Advice for Disaster Recovery Assistance (Chapter 2)

23. FaHCSIA responded to the 2009 North Queensland floods and Victorian bushfires by convening the appropriate disaster recovery committees and coordinating with other government agencies to assist people affected by these disasters. The relevant disaster recovery committees were convened promptly, with appropriate agency representation and communication structures. Issues raised in the meetings were considered and the action items identified were quickly implemented. While room for improvement in some of the secretariat processes has been highlighted (such as tracking the progress of action items), FaHCSIA has already commenced developing guidelines and templates to improve this function for future occasions.

Developing disaster recovery assistance packages

24. To facilitate the consistent, timely and accurate activation of the AGDRP, FaHCSIA has developed detailed guidelines, activation checklists, budget submission examples and templates for preparing the appropriate management information and public information websites. In comparison, a similar set of procedures and templates is not in place for the activation of ex gratia payments.

25. The Australian Government has a policy framework for using ex gratia payments.11 The scale of the 2009 disasters, combined with the need to respond in a timely manner, meant that FaHCSIA did not fully consider all of the elements of the policy; namely, in formulating the IRS payment policy FaHCSIA did not obtain specific legal advice on the availability of other schemes. In this context, FaHCSIA could improve its preparedness for disaster events that may involve the implementation of ex gratia payments by developing guidelines for the activation of the payments, similar to those used for the AGDRP.

Centrelink's Operations in an Emergency (Chapter 3)

26. Centrelink's emergency management (EM) framework is a component of its broader business continuity framework. The EM framework is clearly articulated, logical, coordinated and provides an appropriate basis for Centrelink to effectively respond to emergencies and provide community recovery assistance. The plans and structures identified in the framework have been regularly activated over recent years through successive disaster events. Most of these events have had a localised impact and have been managed by Centrelink's Area offices with National Support Office support.

27. Centrelink's high level of preparedness for such disasters is reflected in the effectiveness of its response to the 2009 North Queensland floods, which involved anticipating the effects of the disaster on residents, planning and intelligence gathering, notification of the disaster and the convening of local committee structures to manage the response.

28. The 2009 Victorian bushfires, by contrast, created a more uncertain environment with significant planning and management challenges. The complex, widespread and evolving nature of the disaster meant that centralised command, control and coordination arrangements needed to be adopted to bring together Centrelink's local Area-led response arrangements. The centralisation of cross-Area responses was not an established component within Centrelink's crisis coordination structures and this resulted in an initial lack of clarity about the local governance arrangements for responding to the bushfires.

29. Subsequent to the audit fieldwork, Centrelink adopted a new Incident Management Framework which includes arrangements for establishing a centralised onsite management structure for cross-Area events. As part of the implementation of the revised response arrangements, Centrelink would benefit from conducting test exercises to provide assurance that the arrangements will operate effectively in cross-Area situations (refer Recommendation No.1).

Managing Disruptions to Centrelink's Business-as-Usual Activities (Chapter 4)

30. Responding to major disasters can have a significant impact on the management of resources and business-as-usual activities. When required, Centrelink is able to manage excess demand for services by using its extensive network to redistribute work and redeploy staff to affected Areas. Centrelink used these strategies successfully during the 2009 North Queensland floods and Victorian bushfires, including redeploying over 330 staff to its Victorian response. While this deployment was carried out effectively in the circumstances, Centrelink's preparedness for mobilising staff would be improved by adopting a planned and targeted approach to identifying staff with appropriate skills. To this end, the recent development of the ‘Centrelink Emergency Reserve'—a database of staff who have volunteered to assist in the event of future disaster responses—will assist with enhancing Centrelink's ability to deploy staff specifically trained for such situations.

31. Centrelink's ability to meet its eight customer service standards was impacted by a range of factors during 2008–09 including: the disasters, the delivery of two large government initiatives12 and increased demand for Centrelink payments resulting from the deterioration in general economic conditions. The impact of these factors was most pronounced over the disaster period (January 2009 to April 2009), which resulted in reduced timeliness in responding to customer calls, longer queue times in Centrelink offices, and slower decision review processing times. To mitigate the impact of these events, Centrelink implemented various strategies, such as a range of scheduling, call routing, technological and staffing measures in call centres.

32. To avoid burdening disaster affected customers, Centrelink suspended debt recovery and suppressed all customer letters in disaster affected regions. Overall, 70 000 Centrelink customers had over 180 000 letters suppressed as a part of this strategy. The decisions to suspend debt recovery and suppress customer letters created significant unforseen challenges for returning to business-as-usual operations. To return to normal business activities a range of manual checking activities and a large staffing commitment were required. Centrelink has returned debt recovery to business-as-usual, but has advised that debts relating to the disaster period13 will continue to be identified until at least 2012.

33. The work to lift letter suppression was completed by 3 June 2009. Using its experience from the 2009 Victorian bushfires, Centrelink has developed a checklist of procedures for managing service delivery in situations when letters are being suppressed, including key activities, roles, decision-makers and timing considerations for implementing, managing and removing letter suppression.

Delivery of Community Recovery Assistance (Chapters 5 and 6)

34. During the 2009 North Queensland floods and Victorian bushfires, over half of the total claims granted for the two disasters were processed in February 2009 (52 per cent), with the volume of claims granted each day ranging from 423 on 9 February 2009 to a peak of 4177 on 17 February 2009. To manage the demand for processing emergency payments, Centrelink introduced measures that included redeploying staff, establishing processing centres in different regions and processing claims over the phone.

35. Centrelink aimed to process AGDRP claims for the floods and the bushfires within 24 hours. To help achieve this, Centrelink advised that during the response it actively monitored, in real-time, the volume and processing time for claims, and allocated resources accordingly. While feedback from customers gathered through the ANAO's quantitative research project indicated that payments were generally made in a prompt manner, Centrelink does not record in its systems sufficient information in aggregate form to retrospectively determine the time taken to process claims. This limits Centrelink's ability to demonstrate its overall performance in this area.

Service delivery

36. During the 2009 floods and bushfires, Centrelink made a number of changes to its standard claiming, processing and payment arrangements in order to meet Australian Government directions and administer disaster recovery payments. These changes included:

  • removing the requirements for customers to provide proof of identity (POI) prior to receiving an AGDRP or ex gratia payment;
  • paying customers who had provided unsigned claim forms; and
  • paying customers immediately in cash.

37. The revised claims processing and payment arrangements were made in reaction to the evolving disaster events and reflected a desire to be responsive to the circumstances of customers. However, adopting these service delivery arrangements also increased the risk of inappropriate claiming of disaster recovery payments. For example, not seeking POI eliminated a front end control for inappropriate claiming, while not collecting signatures and paying cash reduced the capacity to follow up on electronic and physical evidence relating to claims.

38. Prior consideration of the different service delivery arrangements that could be used to respond to different disaster types14 would have reduced the need for Centrelink to be reactive in its service delivery decisions and would have provided a planned strategy for managing the associated payment integrity risks. Centrelink's ability to balance service delivery and payment integrity requirements during disaster response situations could be improved by undertaking scenario planning, in conjunction with FaHCSIA, and then developing guidance, procedures and training.

Payment integrity

39. Payment integrity is an important task for Centrelink to manage as the agency is legislatively required to ‘have regard to the establishment of procedures to ensure that abuses of the social security system are minimised'15. Further, the Business Partnership Agreement (BPA) between Centrelink and FaHCSIA nominates ‘ensuring payment integrity' as a service delivery indicator.

40. As discussed, Centrelink implemented a number of service delivery arrangements that increased the potential risk for fraudulent claims. In implementing the arrangements, Centrelink informed the ANAO it took account of the need to balance the risks to government outlays against the circumstances of the disaster and its impact on people. Centrelink intended that the increased risks to payment integrity would be addressed by ‘back-end' (that is post-event) payment integrity activities. These activities included providing avenues for customers and staff to alert them of concerns regarding potentially fraudulent claims through its tip-off system; identifying and investigating potentially fraudulent disaster recovery payments once the initial response phase of a disaster was over; and undertaking debt recovery.

41. Centrelink's payment integrity activities are designed to take a targeted approach to address some of the risks (such as multiple payments) associated with its payments and delivery methods. The payment integrity activities for the floods and bushfires, however, did not adequately capture risks such as customer self-declaration for claiming the AGDRP, or processing unsigned claim forms. As such, the lack of information on the extent of these risks limits the assurance that Centrelink can derive from its payment integrity activities. These risks can further increase if it is perceived that Centrelink does not conduct checks on the validity of the claim—an issue that was highlighted in the ANAO's qualitative customer research project (refer Recommendation No.2).

Monitoring and Review of Community Recovery Assistance (Chapter 7)

42. Centrelink generally provides its disaster-related services on behalf of FaHCSIA.16 This arrangement is formalised in a BPA,17 which establishes clear governance and reporting arrangements between the two agencies, including service delivery standards, monitoring and quarterly reporting arrangements. Regular post-event implementation reviews (PIR) of disaster responses are a component of Centrelink's BPA obligations. A PIR of the Victorian bushfire response has been produced and Centrelink is responding to its recommendations.

Monitoring and reporting of data

43. There are some limitations on the level of reliance that can be placed on the data that Centrelink uses to produce internal management information and results for its annual report. This is highlighted by some inconsistencies in figures reported by Centrelink and FaHCSIA in their 2008–09 annual reports. The total amount of disaster recovery assistance paid in 2008–09 (including for the North Queensland floods and Victorian bushfires) as reported by Centrelink, was inconsistent with the payment policies; that is payments of either $1000 or $400.

44. The quality of source data, and inconsistencies in figures reported, reduces the level of reliance that stakeholders can place on the reported results and the performance of Centrelink in delivering disaster recovery assistance. To improve the overall quality of the data, Centrelink could undertake an assessment of the reliability of the data and reports generated in its system(s) as the basis for demonstrating performance. The results of this assessment could then be used to update and maintain standards and procedures for the collection and use of the data (refer Recommendation No.3).

Customer Feedback

45. As a part of the audit testing process, the ANAO commissioned an independent, qualitative research project to gain information and insights into the customer experience when claiming and receiving disaster recovery assistance from Centrelink following the North Queensland floods and Victorian bushfires. The research found that participants were appreciative of the financial assistance provided following the disaster events and considered Centrelink's customer service to be of a high quality.

46. While the feedback from the focus groups and interviews was predominately positive, some participants also reported aspects that they believed did not work as well. The concerns expressed included needing to reclaim due to inaccurate advice on eligibility or misplacement of a claim form by Centrelink. Participants also advised that disaster recovery assistance could be improved by implementing a wider use of local mass media to advertise the availability of financial assistance and better follow-up communications about the full range of assistance (refer Recommendation No.4).

Update on Centrelink's Response to Recommendation 11 of Audit Report No.9 2003–04 (Chapter 8)

47. ANAO Audit Report No.9 2003–04 Business Continuity Management and Emergency Management in Centrelink recommended (Recommendation 11) that Centrelink monitor and review its emergency stakeholder liaison and response planning at a national level and implement relevant findings to ensure effective and consistent emergency responses by Centrelink at national, state/territory and local levels. Centrelink has implemented the recommendation. Centrelink is now a member of several state and territory committees through its network of Area Recovery Managers. Further, each Area is involved with a range of state and local disaster management groups. These interactions assist Centrelink to coordinate its emergency responses with stakeholders.

Summary of agency responses


48. Centrelink welcomes this report and considers that implementation of the recommendations will further enhance Emergency Management and Community Recovery Assistance in Centrelink.

The Department of Families, Housing, Community Services and Indigenous Affairs

49. FaHCSIA supports the recommendations and findings in the ANAO Report: Emergency Management and Community Recovery Assistance in Centrelink and embraces the opportunity to work with Centrelink to improve the service delivery of emergency payments. As the report has noted, ensuring effective responses to disaster situations in the future will require ongoing collaboration and coordination between FaHCSIA and Centrelink. To this end, the two agencies have commenced a range of activities to improve both policy implementation and service delivery.


1 Emergency Management Australia, Mutli-Agency Incident Management, 1998, p. ix.

2 Attorney General's Department, Australian Emergency Management Arrangements, 2009, p. 4.

3 The AGDRP is the most common form of payment made available by the Commonwealth in response to disasters, with its activation process and eligibility criteria set out in legislation. In contrast, ex gratia
payments are less frequently used and are made by relying on the Commonwealth’s executive power under the Constitution rather than legislation. For this reason, ex gratia payments provide flexibility to tailor and rapidly deploy payment schemes that recognise the particular circumstances of disaster victims.

4 Recommendation No.11 – ‘The ANAO recommends that Centrelink monitor and review its emergency stakeholder liaison and response planning at a national level, and implement relevant findings and recommendations, to ensure effective and consistent special and community emergency responses by Centrelink at the national, State/Territory and local levels.'

5 The IRS payment for the Victorian bushfires was subsequently extended for two further periods of 13 weeks making a total of 39 weeks.

6 2008 Disasters: QLD floods–Emerald/Charleville (January 2008); QLD floods–Mackay (February 2008); SE QLD storms (November 2008); and Mumbai Crisis (November 2008).

7 2009 Disasters: North QLD floods–Feb 2009; Victorian bushfires–Feb 2009; Northern Rivers/NSW floods–Mar 2009 and South East Queensland/New South Wales floods–May 2009.

8 Centrelink estimates that in the order of 1000 staff were involved in the responses.

9 The payments that Centrelink delivered on behalf of Australian Government agencies increased by 23.1 per cent to $86.8 billion in the year to 30 June 2009 and included the delivery of two large initiatives, the Economic Security Strategy and the Household Stimulus Package.

10 For the January 2009 and April 2009 quarters both standards as well as Authorised Review Officer (ARO) review times, experienced a decline in performance. The levels of performance for queue times and ARO reviews took until the July 2009 quarter to recover with call centre service levels recovering in the October 2009 quarter. Appendix 6 includes the details of the results for each standard from July 2008 to October 2009.

11 Department of Finance and Administration, Finance Circular 2006/05: Discretionary Compensation Mechanisms,
11 August 2006.

12 The Economic Security Strategy (October 2008) and Household Stimulus Package (February 2009).

13 29 January 2009 to 29 April 2009.

14 Such as POI levels for claimants who lost their identity documentation during a bushfire.

15 Social Security (Administration) Act 1999, paragraph 8(a)(v).

16 Centrelink also provides disaster-related services on behalf of other Commonwealth and state and territory agencies.

17 In November 2009, the BPA was replaced with the FaHCSIA and Centrelink Bilateral Management Agreement. As this was not in place at the time of audit fieldwork, this audit has focused on the BPA.