17 March, 2011

Missing Out

Here is an interesting piece by a researcher who discovered that 1.3 million Australians who qualify for pensions are missing out on their money simply because the system is too complicated. It grabbed my attention immediately. We usually hear stories in the reverse; dole bludgers 'taking' our tax money unfairly. So the question is, should the government spend as much time chasing up dole 'misser-outers' as much as they do 'dole-cheats'???
Hope you find this as interesting as I did...

Missing Out - David Barker

“Welfare cheat” stories have become a staple for tabloid current affairs programs in Australia. We regularly hear about the scourge of dole bludgers and those in the community who are claiming benefits but appear to be healthy. In fact, the recent Budget announced a crackdown on the disability support pension by overhauling the impairment test. The tax office is quick to pursue people for minor amounts of unpaid tax and Centrelink will recover any money that may have been incorrectly paid because of a change of personal details.

Fair enough. But where is the obligation for Centrelink to ensure that those Australians who are entitled to receive government assistance actually receive it? The short answer is there is no obligation. Centrelink’s guide to payments states that:

“It is your responsibility to decide if you wish to apply for a payment and to make the application, having regard to your particular circumstances”. Put bluntly, it is up to you.

Did you know that in the unfortunate event of your partner dying you may qualify for a bereavement allowance to assist you through this difficult time? Or, if you provide daily care to someone with “substantial functional impairment” you may qualify for the standard allowance paid to carers?

While the government does offer assistance to Australians doing it tough, it does not
go out of its way to promote the availability of this assistance or make it simple to apply. The result is people are missing out on assistance they qualify for, assistance that is designed to support a more equitable society.

The government’s own 2004 estimate is that 1.3 million Australians miss out on assistance. More recent analysis by The Australia Institute found that more than 168,000 Australians are missing out on assistance worth $623 million across just four payments for parents, widows, carers and the disabled. That is an average of $3,707 per person. Multiply that by the government’s own figure and the IOU bill quickly stacks up.

In contrast, everyone is aware of the need to pay tax on the money they earn. In fact, the tax office and the government are making it easier for us to comply with the requirement to pay the tax it deems we owe. For example, the tax office offers online tax forms that are already partially filled in making the lodgement of a tax return easier.

For the government’s part, the recent Budget included a standard $500 deduction for
work-related expenses that can be claimed without sending in each dry cleaning
receipt. Then there is the tax office’s annual awareness campaign to promote the tax pack for individuals lodging their own tax return which began airing in May, two months before the end of the tax year.

And if understanding every question or correctly filling in the form still seems daunting you can opt to let an accountant do the tedious work for you. It is in the government’s interest to make lodging a tax return as easy, straight forward and hassle free as possible. There is money to be collected at the end. However, the incentive for the government to make claiming welfare assistance is not so attractive. There is money to be paid out at the end.

Centrelink forms are every bit as long and complicated as a tax return form and in many instances as much if not more evidence of income and assets is required. Yet, there is no provision of partially completed forms online, or even online claiming for that matter. If the government was serious about providing the levels of assistance it offers then this is one option it could consider implementing.

The possibility of using an accountant to complete a form, as you can with your tax, is not promoted by Centrelink on the Parenting Payment claim form but is on the Private Company form. This option carries a level of risk though, because if your claim is not approved you are still stuck with the accountant’s bill.

All of this is superfluous though if an individual is not informed about the range of available assistance or how to go about accessing information about assistance and how to claim.

Data-matching between government departments and agencies is currently being used to find those people whose changing circumstances result in them no longer qualifying for assistance. There is no reason this function could not be applied to identify people who are missing out.

While the government facilitates the payment of taxes it appears happy to keep what they can from many who qualify for assistance. The government has the way, but lacks the will to ensure all Australians receive the assistance the government itself deems them to need.

AUTHOR: David Baker
LINK: https://www.tai.org.au/index.php?q=node%2F19&pubid=760&act=display

No comments: