Centrelink and ATO data matching program is underway
It is estimated around 460m pay events will be exchanged during the active period and will affect approximately 10-12m individuals who are mutual clients of the ATO and Centrelink. Among other things, this data matching program will be used to deter behaviours so individuals adhere to their obligations and support existing enforcement and recovery activities.
Centrelink and the ATO have commenced a new data matching program in relation to the use of Single Touch Payroll (STP) data. Broadly, the program will involve the exchange of STP data from the ATO to Centrelink (or Services Australia) in relation to individuals that have a client relationship with the agency. The data will then be matched against Centrelink held records and information.
For the purposes of this data matching program, clients of Centrelink include:
- an individual who is in receipt of or claiming a payment or service such as an income support payment, family assistance payments, low income card, and a child support paying parent.
- a related individual of the above, whose income may have an effect on the payability or ongoing entitlement to a payment of the individual above. This includes a partner/ex-partner, or a debtor (eg a non-current client who has an outstanding debt to Centrelink and where it is their responsibility to repay a debt).
The data matching program will apply for the 2019-20 and 2020-21 financial years and it is estimated that around 460m pay events related to STP will be exchanged in relation to approximately 10-12 million individuals. This figure may fluctuate depending on the economic impacts of COVID-19 and associated supports (ie JobSeeker).
Data exchanged in the program will consist of basic identifying information including name, date of birth, postal address, gender, and assigned CRN (or TFN for Child Support). Once an individual has been matched using the basic identifying information, a more detailed exchange of STP information will follow including employers’ ABN and contact information, year to date salary and wages (ie income, allowances, deductions, and employment termination payments), and pay period details (ie start and end dates, and payment dates). Note the employment commencement and cessation dates will be used to identify when the sharing of STP data is no longer necessary.
Centrelink notes that data quality mechanisms will be implemented in this data matching program meaning that ATO will only provide data for mutual clients where it has “high confidence” that they have identified the correct individual. If an individual cannot be confirmed as a mutual client of interest of both the ATO and Centrelink, no STP data will be exchanged.
Safeguards will be present where key data elements fail validation or there is unexpected or out of order payroll processing of STP data. This consists of quarantining the data from use or flagging the data to minimise misinterpretation.
According to Centrelink, matching data is one of the key controls it uses to manage the risk of fraud and non-compliance. Specifically, in this case, this data matching program will:
- deter behaviours so individuals adhere to their obligations;
- support existing enforcement and recovery activities; and
- enable Centrelink to provide early intervention to educate customers about what information needs to be provided to meet their income reporting obligations.
If you or your partner currently receive a support payment, family assistance payments, low income card, or a child support through Centrelink, now may be the time to review your obligations to ensure you’re not overpaid. Remember, Centrelink has may tools in its arsenal to recover debts including its tax garnishee program where it can ask the ATO to withhold or garnish some or all of a tax refund to pay a Centrelink debt.
Centrelink and ATO data matching, need to review your financial situation?
If you need help to work out whether you or your partner is doing the right thing and declaring the correct amount of income to Centrelink, we can help you work that out. Keep in mind that STP now allows ATO to receive timely information every pay cycle from most employers, so don’t wait, contact us today.
Hunter Partners are Accountants, Tax Agents and Financial Planners. We can assist you with all aspect of your accounting, tax and financial planning requirements, call Hunter Partners on (07) 4723-1223.
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