Business

Centrelink keeping track of monthly investment performance

The government is looking for a new database providing monthly updates on investment returns, which could allow it to reduce or increase the Centrelink and pension benefits it pays out as markets rise and fall.  

It plans to have the new database running by the start of next financial year providing monthly updates on unit prices for managed investments.

According to a tender released on Monday, the Department of Human Services wants the new database to "supply identity, unit price and other data for managed investments on a monthly basis". 

This could enable the government agency to conduct asset tests on a monthly basis. This means Centrelink income may drop month-by-month if financial markets are doing well and investment returns are good. Conversely, payments may rise again as markets decline. 

"The effect will be less certainty of Centrelink cash flow if they are going to more regularly recalculate those customers' benefits," the head of policy and government relations at the Financial Planning Association of Australia, Ben Marshan, said. 

Currently Centrelink receives information about investment performance from superannuants, people receiving Newstart allowance, parenting payment, disability support pension and the age pension. Those payments are then measured against the value of those assets. 

Advertisement

A spokeswoman for the Department of Human Services said it already updates information about a customer's registered managed investment products twice a year, with further updates made at the request of the customer or as part of a new payment claim.

"Customer records are updated using a repository of managed investment data which is updated monthly by an external service provider," she said. 

The existing arrangement expires on June 30, 2017. The spokeswoman added the database was ''not new for the department", but could not confirm if the new database would enable monthly assessments.  

"It's important to note this current tender process, including the electronic data, is not linked to the department's current online compliance activity. The tender is for the provision of electronic data about registered managed investment products that are available to customers, not customer-specific data," she added. 

Recently Centrelink has been criticised for using data-matching to retrospectively assess payments. The program has a high rate of falsely accusing people of owing the government money. 

With the managed investments Centrelink relies on its customers to tell them when income from investments increase, and adjusts their payments accordingly. Some people may be reluctant to report increases, in case it is short-lived. 

According to the tender, the database would include all publicly available managed investment products such as unit trusts, property syndicates, superannuation bonds and funds, deposit funds, annuities, insurance bonds, society bonds, savings plans, funeral bonds and debentures. It does not include any products listed on an Australian securities or stock exchange. 

Each managed investment will be recognised by an Asia Pacific Investment Register code, or one created by DHS. The database will consolidate information about investments mergers, demergers, rights issues and liquidations. 

0 comments