Unambiguous public communication campaigns and options for dealing with unexpected or inappropriate outcomes are key to the effective delivery of government bonus schemes, according to Commonwealth Ombudsman Professor John McMillan.

Today he released the findings of an investigation into complaints about the $8.7 billion Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA)–developed Economic Security Strategy Payment (ESSP), delivered by Centrelink.

The ESSP is a widely publicised lump sum, tax free payment to people who held an eligible concession card or received an eligible social security payment, veterans’ payment or family assistance payment on 14 October 2008. Most payments (to 7.7 million people) were made in December 2008, but they will continue up to 30 June 2011.

The Ombudsman acknowledged that the scale of the ESSP payment scheme was immense, there was a short time frame for implementation and that there was extensive publicity about ESSP payment criteria. However, valuable lessons could be drawn from complaints from those who were confused or missed out on a payment.

‘It is important to identify clearly who is eligible for a bonus scheme, how eligibility is determined, and when a payment will be made,’ Professor McMillan said. ‘The content, targeting and timeliness of FaHCSIA’s information about the ESSP was inadequate, leading to some erroneous assumptions and adverse consequences for many people.

‘Ms H is a case in point. A lump sum Family Tax Benefit recipient, Ms H anticipated a December 2008 payment, but was not in fact eligible to receive the ESSP until she lodged her 2008-09 tax return. As a result, Ms H was not able to pay Christmas bills that she would not have accrued had the information campaign made clear her ESSP would be delayed.’

Professor McMillan said it was challenging, but essential, for government to provide ready access to information to people affected positively or negatively by a scheme.

‘In this case, because the positive aspects of the ESSP were so widely communicated, FaHCSIA had an obligation to inform those groups of people it could predict would wrongly think they were eligible, that they were in fact not eligible.’

He also identified a need to improve usage of mechanisms to deal with design problems.

‘The ESSP legislation does allow for the establishment of an administrative scheme to address unforeseen problems,’ he said. ‘But because FaHCSIA and Centrelink did not put in place a comprehensive system to collect, record and analyse feedback and complaints about the ESSP, there is little and incomplete evidence to support doing so.

‘Some pensioners became ineligible for the ESSP because they topped up their pension with paid work in the week in which their eligibility was assessed—making them worse off overall. This was the case with Mr O, a Disability Support Pensioner, whose earnings as a casual relief teacher put him over the qualifying limit. Neither FaHCSIA nor Centrelink know how many people might be in this position.’

The Ombudsman recommended that FaHCSIA conduct a rigorous analysis of complaint data in response to the findings in his report and advise the relevant Ministers that insufficient consideration has been given to establishing an administrative scheme.

Download the report: Administration of the ESSP: An examination of the implementation, monitoring and review of the scheme.

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Date of release: 15 November 2009