DRAFT Report on the study tour by the Portfolio Committee on Social Development to Australia (07-11 August 2006)

Having undertaken a study tour to Australia on social security related matters on 07-11 August 2006, the Portfolio Committee on Social Development reports:

1. Delegation

         Tshivhase, Ms T J-Committee Chairperson and delegation leader

         Direko, Ms I W - MP

         Masutha, Mr M T - MP

         Waters, Mr M - MP

         Fukula, Mr MC - Committee Secretary

2. Background
In the year 2003, the Portfolio Committee on Social Development was tasked to legislate for the establishment of the new South African Social Security Agency (SASSA), which would over time assume the responsibility of payment and administration of social grants. The establishment of SASSA was necessitated by the severe weaknesses in the management and administration of social grants often resulting in a failure on the part of government to ensure that those entitled to the benefit were provided with the best possible service. This continued to lead to ongoing litigation and substantial negative publicity in the press.

SASSA is a Cabinet-endorsed focused and specialized institution that is meant to take responsibility for the management and delivery of social grants. Its strategic intent is to facilitate improvement in the quality of services provided to beneficiaries and ensure that the minimum standards operate countrywide, for consistent and predictable service delivery. This, it is hoped will lead to efficiency gains which will manifest themselves in the reduction in the cost of service delivery as well as the drastic minimization of fraud associated with social grant administration and payment. The establishment of the Agency will have far reaching implications, requiring expert management of people, structures and processes.

Subsequent to passing the SASSA legislation in 2003, our committee could, sadly, not effectively interact with the provincial and local government stakeholders on some of the unfolding developments leading up to the establishment of such an Agency as it was hamstrung by the work on the recently finalized Children and Older Persons' Bill in the years 2004 and 2005 (first half). Given the breathing space at its disposal at the moment resulting from the conclusion of the committee's legislative work in June 2005 and also as a gesture of its commitment to wanting to contribute towards ensuring that transition from the old to a new grant administration dispensation takes place as envisaged, the Committee adopted a proactive approach and visited the province of North West on 01-05 August 2005.

The visit was in sync with our Committee's oversight role. It was intricately linked to our Committee's mission of reviewing, developing and monitoring the implementation of appropriate legislation that responds to the social development needs of the people and that assists in reducing poverty and social exclusion, and ensuring public participation. And also ensuring that the policies and social development services implemented by Government are focused on comprehensive protection against vulnerability and on strengthening the social fabric.

Prior and subsequent to the visit to North West, our committee had facilitated a number of interactions with officials from the social security branch in the national Department of Social Development and South African Social Security Agency on such pertinent issues as the reporting mechanism of SASSA to Parliament, SASSA's Business Plan as well as progress made and challenges currently experienced with regard to its rollout plan and its general transitional arrangements; update on the Human Resource issues one of which was the issue of the transfer of staff and assets.

Having been to provinces and also interacted with SASSA officials, the committee then took stock of its own capacity to exercise effective oversight over SASSA and arrived at a conclusion that its ability and skill to exercise effective oversight over SASSA could be better strengthened and sharpened if it could, among other things, visit, among other institutions, Centrelink in Australia and look at what they have to offer at operational and policy level. Moreover, to explore the systems that Australia has in place in governing how institutions like Centrelink interface and account to the Australian Parliament and the inherent challenges characterizing this relationship. The committee's view was that whatever experiential knowledge it gathered during its study tour in Australia, it would use it to strengthen its oversight arm in its relationship with the recently established South African Social Security Agency.

3. Summary

Our committee's delegation led by Mrs TJ Tshivhase undertook a fruitful study tour to Australia, on 07-11 August 2006. The delegation had Canberra, the capital town of Australia as its base. It met and interacted with various Australian stakeholders connected to, in one way or another, social security system, ranging from Members of Parliament to various state Agencies' officials. Furthermore, it visited a Centrelink Customer Service Centre in Belconnen, to have a first-hand experience of how this front line office was dealing with social security clients or customers, as they are known in Australia. This proved to be quite a useful site visit.

Some interesting innovations and devices caught the eye of our delegation. One of those is Centrepay, a free direct bill-paying service offered to customers receiving money from Centrelink. The other one was the Child Support Scheme administered by the Child Support Agency. The Child Support Scheme was introduced in the late 1980s to address the problem that, following separation, most non-resident parents (mostly fathers) were providing little, if any, financial support to their children, even where court orders had been made, with consequent high levels of child poverty and high costs to the public purse.

Another useful innovation that could be explored further was the access card, which is touted as a major breakthrough in the efforts to ensure different data interface and thus guarantee data integrity. This card will be used as a single form of identification for accessing, among other things, health as well as the social security services.

Below is a list of some of the activities from our delegation's itinerary:


         Meeting: Department of Families, Community Services and Indigenous Affairs (FACSIA)

         Visit to Belconnen Centrelink Customer Service Centre .

         Visit to Centrelink National Support Office: Meeting with Deputy CEO, CIO John Wadeson

         Meeting with Chair and Members of the Standing Committee on Family and Human Services

         Meeting with the Chair and members of the Senate Finance and Public Accounts Committee

         Meeting: Ms Annette Ellis MP, Deputy Chair of the Australian - South Africa, Parliamentary group

         Meeting; Child Support Agency



         To explore how Centrelink 's operational system

         To look at what oversight responsibility Parliament in Australia has over its centralized social security agency similar to our South African Social Security Agency (SASSA).

         To see how the centralized social security agency relates to Parliament in Australia.

         To interact with Members of Parliament in Australia on the future political, social and economic as well as strategic thinking in respect of its centralized social security agency.

         To look at challenges facing Australia's centralized social security agency.

         Lessons from Australia for South Africa

5. Meeting with FACSIA - Monday, 07 August 2006

Our delegation met with representatives from the Department of Families, Community Services and Indigenous Affairs (FACSIA). The purpose was mainly to check the kind of a relationship FACSIA has with the Centrelink.

FACSIA was established in October 2004 to improve the development, delivery and coordination of Australian Government social and health-related services. It brings together six agencies, the Child Support Agency, Commonwealth Rehabilitation Services (Australia), Centrelink, the Health Insurance Commission, Australian Hearing and Health Services Australia.

FACSIA is responsible for a wide range of programs and services for individuals, families and communities, including social support for seniors, people with disabilities, carers, youth and women. In addition, it has responsibility for childcare, housing and Indigenous affairs.

FACSIA is the Australian government's principal source of advice on social policy issues. It is, however, not the sole custodian of this function. It shares it with other government and non-government organisations. Although It develops the social security policy, it is however not responsible for overseeing the actual day-to-day administration of the social security system in Australia.

In its interaction with the FACSIA representatives, our delegation was told of an interesting future policy innovative in the form of an access card. It is touted as a major breakthrough in the efforts to ensure data interface and thus guarantee data integrity. This card will be used as a single form of identification for accessing, among other things, health as well as the social security services.

Our delegation heard that there were few cases of fraud or corruption from officials working within the FACSIA.

6. Meeting with CentreLink officials - Tuesday, 08 August 2006

Our delegation met with Mr John Wadeson, Deputy CEO and Chief Information Officer from Centrelink's National Support Office. The crux of our delegation's meeting with Mr Wadeson dwelled more on what Centrelink was all about including the services it is offering.

6.1 Background information on CentreLink

Centrelink is a service provider to over 6.4 customers, including retired people, families, sole parents, people looking for work, people with a short-term incapacity, people with a disability, students, young people, indigenous people and people from diverse cultural and linguistic backgrounds.

Its vision is reportedly to make positive difference to Australian individuals, families and communities particularly during transitional periods in their lives.

It has one government-directed outcome, which is 'effective delivery of Australian services to eligible customers. This outcome is to be supported by the output 'efficient delivery of services to eligible customers.

Centrelink generates its revenue through Business Partnership Agreements or similar arrangements with client agencies. Funds are appropriated to the policy agencies and paid to Centrelink in return for specified services.

Centrelink delivers services on behalf of about 25 client agencies. These cover a wide range of outputs in the form of products and services.

It seeks to build a stronger community by:


         Simplifying access to government services by providing a single entry point;


         Providing innovative and personalized services, opportunities and support that are culturally appropriate, during key life events.


         Maintaining a high level of customer service, while ensuring strong accountability to stakeholders; and


         Building quality relationships with our stakeholders to continually improve the social well being of Australian society.


6.2 Centrelink's business at a glance


         It has about 6, 5 million customers.


         It has over 1000 service delivery points nationally.


         It administers over 63 billion Australian dollars in program payments annually.


         It receives about 28 million phone calls annually.


         It sends approximately 90,6 million letters to customers annually.


         Grant payments are made fortnightly into a bank account. Those in rural areas, get a cheque payment.

6.3 Centrelink's Information Technology environment


         25000 staff users all connected to the same Centrelink system.


         About 1, 9 million customers registered for self-service online or telephone service.


         Interactive voice response facility in all Centrelink call centres.


6.4 Centrelink's current focus

         Improved and innovative customer service applications for face-to-face and online customer channels.


         Infrastructure enhancements to support expanded service requirements.


         Better linking and collaboration with other government and businesses.




6.5 Reporting of employment income and customer death


         Verification of employment income is done in conjunction with the Tax Office.


         When a customer dies, the relevant department notifies Centrelink automatically.


6.6 Interesting Centrelink's self-service transaction innovation-Centrepay


This is a free direct bill-paying service offered to customers receiving money from Centrelink. Grant beneficiaries can through Centrepay choose to pay bills by having a regular amount deducted from your Centrelink payment.

Centrepay is voluntary. Customers who choose to use Centrepay benefit from its convenience and security, knowing that their payments are under control. Instead of having large bills every month or quarter customers' bills are paid in manageable amounts from the customers' grant payment, making it easier for them to budget Centrelink, however, has to approve the institution to which the money is paid. It also has the right to curb the advance payment.

Centrepay does not charge a customer any fee to deduct the money from his/her payment, unlike other methods available for paying bills. However, the organization or person to which Centrepay sends the deduction is charged a fee.
Because the service is voluntary, a beneficiary can manage, suspend or cancel the deduction at any time.

8. Visit to Belconnen Centrelink Customer Service Centre - Tuesday, 08 August 2006

Our delegation visited the Belconnen Centrelink Customer Service Centre. This is a frontline office catering for day-to-day needs of Centrelink clients.

The Centre is equipped with, among other things, the following interesting resources:


         A job-search machine with a data base of all jobs available in Australia. The job search is free service.

         A free public telephone line for job enquiries.


         Social workers on hand.


         Job capacity assessors - looking at people's needs and doing job placements.


         Customer Relations Line for customers with problems.


         Queue management system.

9. Meeting with the Chairperson and members of the Senate Standing Committee on Finance and Public Administration - Thursday, 10 August 2006.

Our delegation met with this committee with the same view as with other committees it met to, among other things, look at how, formally, it relates with Centrelink, if there is any formalized relationship between two.
The Standing Committee on Finance and Public Administration is a committee that falls within the purview of the Senate House where the ruling government majority has reportedly no control. The Finance and Public Administration portfolio coverage includes Parliamentary Departments, Prime Minister and Cabinet, Finance and Public Administration and Human Services.

The committee, our delegation was told, does oversee Centrelink as part of broader oversight role over government administration. It looks mainly at service delivery aspect of welfare as opposed to policy. It therefore has no role in setting the guidelines or regulations for Centrelink operations.

The committee listed the following as commonly reported problems with Centrelink:


         Problems with Centrelink operational policies


         How Centrelink arrives at decisions-people do not know the basis upon which decisions are made.


         Misplacement and misuse of evidence by Centrelink officials.


         Rudeness of Centrelink officials.


         Reported abuse of clients by Centrelink officials.


         Overpayment and the expectation to have the money paid back. Some clients find it difficult to cpoe with this.

10 Meeting with the Standing Committee on Family and Human Services, Wednesday, 9 August 2006


The standing committee on Family and Human Services is one of thirteen general-purpose investigatory committees established by the House of Representatives of the Parliament of Australia.

In summary, the role of the Standing Committee on Family and Human Services is to carry out inquiries into matters referred to it by the House of Representatives or a Minister of the Commonwealth Government.

Our delegation heard that this committee does not have a direct oversight role over Centrelink. It, however, has an indirect oversight role through consideration of annual reports of different government and agencies like Centrelink that have to be tabled in Parliament. If there is any concerning matter involving Centrelink. It could thus call the latter to account. Constituency Offices also serve as a platform for an indirect oversight exercise by members of Parliament, by following up on issues raised by people in the communities they service, our delegation was told

11. Meeting with officials from the Child Support Agency (CSA), Friday, 11 August 2006.

The CSA is a government institution, integrated within Centrelink that operates as part of the Department of Family and Community Services. It is responsible for managing programs and delivering child support services through the Child Support Scheme. Because it is not part of the social security system, it therefore does not guarantee payment. The CSA only passes on money collected from the contact parent. It therefore does not have funds of its own to pay residence parent.

11.1 Child Support Scheme

The Child Support Scheme was introduced in the late 1980s to address the problem that, following separation, most non-resident parents (mostly fathers) were providing little, if any, financial support to their children, even where court orders had been made, with consequent high levels of child poverty and high costs to the public purse.

It came about as a result of the recognition that the system in which child maintenance was dealt with through the courts on a case-by-case basis had failed. Court orders were unrealistically low and difficult to predict. They also took little or no account of the rising costs of living. Furthermore. they were all too often ignored.

Almost two-thirds of non-custodial parents failed to meet their obligations to their children. To enforce a court order was considered time-consuming, expensive and frequently unproductive for the custodial parent. Many non-custodial parents tended to ignore successive court orders and seemed to regard supporting their children optional. Not only did the children suffer, but also increasing numbers of children were being supported by the tax paying rather than by their parents with whom the responsibility properly lay. Escalating welfare bill and growing numbers of children living at the poverty level prompted the government to act. The Child Support Scheme was introduced to overcome the problems.

The fundamental shift brought about by the Scheme was that the registration of a child support liability with the Child Support Scheme converts "a personal obligation into a debt owed to the Australian government collected by the Child Support Agency. Through the elimination of the need for private enforcement action, the Scheme sought to improve the working relationship between parents by reducing the stress and fear often associated with bargaining over money. It also sought to offer a degree of predictability and certainty about payments with respect to amount, regularity, and the timing of payments.

Central to the Scheme is the administrative assessment of child support liability via the application of the child support formula. This formula is expressed as a percentage of the non-resident parent's gross taxable income (after a self support component has been deducted) and is based on the number of dependent children under the daily care of the other parent - with provision for special circumstances. The Scheme removed the need for parents to have recourse to court-based discretionary assessment, which typically produced low child maintenance amounts that did not adjust for inflation.

The following mechanisms are used against fathers that renege on their maintenance:


         Have their tax monies intercepted.


         Have garnishee orders on their salaries - NB. Garnishee orders do not require a court action.


         Money is deducted from their bank accounts.


         They are denied permission to travel abroad.


The Portfolio Committee on Social Development recommends that:


Our committee commends Parliament for having allowed it to undertake the study tour to Australia. It is however of the view that as it is expected

To oversee SASSA; an entity that has a budget of about R55 billion. which is somewhat unique in South Africa, another other bigger delegation or two including a researcher should be allowed to undertake similar study tours to other countries with a similar socio-economic profile as South Africa. This, it believes, will assist immensely in capacitating and orientating its membership about the critical aspects relating to expert management of people, structures and processes in the Agency. The fact that the rollout of SASSA is currently underway and the committee is expected to effectively oversee it requires that Parliament provides our committee with adequate financial resources to undertake such trips as a matter of urgency.