B19/1991 THE AUSTRALIAN TAXATION OFFICE, DEPARTMENT OF VETERANS' AFFAIRS AND DEPARTMENT OF SOCIAL SECURITY (ATO/DVA/DSS) DATA MATCHING PROJECT, INCOME MATCHING SYSTEM COMPONENT.

DATE OF ISSUE: 06 MAY 1991

THE AUSTRALIAN TAXATION OFFICE, DEPARTMENT OF VETERANS' AFFAIRS AND DEPARTMENT OF SOCIAL SECURITY (ATO/DVA/DSS) DATA MATCHING PROJECT, INCOME MATCHING SYSTEM COMPONENT.

Background

ATO/DVA/DSS data matching originated from a saving initiative by DSS/ATO for the April 1989 economic statement.

2.The objectives of the proposal are as follows:

-to strengthen relationships between ATO/DVA/DSS;

-to ensure greater compliance with eligibility provisions for pensions and benefits; and

-to strengthen measures to protect public revenue.

3.The component of the proposal that sought to strengthen the relationship between ATO/DVA/DSS is the Income Matching System (IMS).

What is the Income Matching System?

4.The Australian Taxation Office (ATO) currently receives, from financial institutions, details of income earned by investors.  The income may be in the form of interest, dividend, or unit trust distribution.

5.Service pensioners identity details are matched against ATO's records and when a match is established ATO provides details of "income" for that matched record.  Matches are recorded on tape and passed to DVA through DSS.  The matches are then compared to the information that is recorded on PIPS.

6.The matching criteria between ATO and DVA are at Attachment C.

7.Matching of ATO's 1988/89 IMS records has been completed.  The income matched for this exercise is the dividends and interest received from financial institutions (ATO's records) against the income held on the "FI" (not including cash) and "SH" screens, and the income for bonds and debentures recorded on the "M/L" screen.  Unit trust distribution and the "MI" screen are not being compared because ATO's records are for 1988/89 and during 1988 there were changes to how DVA assessed income for managed investments.

8.The output from this matching exercise has been sent to the Manager, Income Support, in the Branch Offices.

Procedures

9.Attachment A outlines the procedures for processing discrepant cases.  The output will list the discrepant cases in descending order allowing the examiner to commence investigating the cases with the largest discrepancy.  Cases are to be investigated in this order to return the greatest possible savings.

10.Care must be taken when investigating cases where:

.a full review has been completed since 1/7/90 or in the last twelve months (whichever is the lesser); or

a case where an SP3A has been returned and no reference has been made to the investments/ amounts that made the case discrepant.

For these cases the examiner will need to contact the financial institution to confirm whether or not the service pensioner had/has an investment with them before going to the pensioner, as we are required to be discreet in our investigations.

11.Attachment B is the form letter that is to be sent, on Branch letterhead, with the SP3A to the pensioner.  This letter has been cleared by Privacy and the Legal Advising Group in Central Office, therefore any changes to the content must be cleared by Central Office.

Over 80s

12.Service pensioners over 80 years of age are to be sent a Deeming letter by mid May and will be given one month to respond.  The date of effect for reductions resulting from this action will be 11 July 1991.  Investigation of discrepant cases where pensioners are over 80 years old is not to commence until directed by Central Office, which will be a date after 11 July 1991.

Recording

12.All cases are to be classified as a DIA and given the Income Matching attribute (100).  Attachment A outlines when cases are to be withdrawn.  Any case that requires investigation and subsequent PIPS action will follow normal recording procedures.  A record of cases that are withdrawn because of a mismatch must be kept.

13.Overpayments that result from Income Matching must be recorded to enable accurate calculation of savings.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS

ATTACHMENT A

PROCEDURES FOR INCOME MATCHING CASES

The hard copy output will be provided in different score groups with the discrepancy amount in descending order.  When selecting cases they should be taken from top to bottom, ie.  the largest discrepancy should be investigated first.

Step 1Select a number of cases to register and attribute them.  If the output provides enough information to make a judgement that investigation is not required, withdraw the case.  For all other cases request files.

Step 2When files arrive, check the following:

Was service pension granted before 1/7/88?

YesNo

Continue investigation of file — Withdraw case

Were we holding approximately the same amount of income during 88/89?

YesNo

Withdraw case — Continue investigation

Is there a valid reason on file for the difference in income?

YesNo

Withdraw case — Continue investigation

Has there been a full review completed (SP3 or SP3A) since 1/7/90 or the last 12 months?

YesNo

Contact the financial — Send SP3A with the covering letter.

institution and ask about

the account/s in question,

dates, balances, interest rates.

It is expected that pensioners will take extra care when returning their form due to the attached form letter stating that we have received "information from ATO".

Step 3aSP3A is returned

Process case and if there is a reduction consider overpayment.  If there is no mention of the account/s in question or the difference in income still cannot be accounted for, write to the pensioner and ask about it.

Step 3bLetter is returned

Action letter and consider overpayment.

If the explanation is not satisfactory and adequate details are not provided, contact the financial institution and ask for details eg.  balance and interest rate from date of grant.

Overpayments

Overpayments will also need to be attributed as accurate records must be kept for reporting.

ATTACHMENT B

Dear ()

The Department of Veterans' Affairs verifies income information with the Australian Taxation Office to confirm the correctness of pension payments.

Information from the Australian Taxation Office suggests that you may have received income from a bank, building society, credit union, or other financial institution in the 1988/89 financial year.  The Department does not have a record of this income.

This income could affect the service pension that you are or have been entitled to receive.

Please complete the attached Income Statement which asks for details of your income, and return it to the address at the top of this page within 14 days.

If you have any questions please phone the number at the top of this letter.

The information sought is requested under Section 127 of the Veterans' Entitlement Act.  Failure to comply with this request may result in a penalty being imposed.

Yours sincerely

Delegate of the Secretary

ATTACHMENT C

MATCHING CRITERIA FOR IMS

Each service pensioner is first matched against tax-payers (T/P) on the primary key of SURNAME, FIRST INITIAL and FIRST DIGIT OF RESIDENTIAL POSTCODE.  If no tax-payer matches the service pensioner on all three fields, the service pensioner is unmatched.  If one or more taxpayers match on all three fields further checks are made.

For each tax-payer matching the service pensioner on the primary fields (the candidate group), a match score is established by comparing the three secondary fields, GIVEN NAME,SECOND INITIAL and SEX, of the service pension with the corresponding fields for the tax-payer, and adjusting the match score for the tax-payer from zero as follows:

GIVEN NAME — CLIENT FIELD — CLIENT FIELD

PRESENT — NOT PRESENT

T/P field present — Match — Add 16 — No change

Mismatch — Set to -32

and exit

T/P field not present Mismatch — Set to -32 — No change                                                        and exit

SECOND INITIAL — CLIENT FIELD — CLIENT FIELD

PRESENT — NOT PRESENT

T/P field present — Match — Add 8 — No change

Mismatch — Set to -16

T/P field not present — No change — Add 8

SEX — CLIENT FIELD — CLIENT FIELD

PRESENT — NOT PRESENT

T/P field present — Match Add 4 — No change

Mismatch - 10

T/P field not present Mismatch - 10 — No change

If the score at this point is not negative, the POSTCODE and IDENT are also compared, and the match is further adjusted as indicated.

For the POSTCODE, the service pensioner's postcode is compared with both the service and residential postcode for the tax-payer.  If it matches either or both, 32 is added to the match score.

POSTCODE — CLIENT FIELD — CLIENT FIELD

PRESENT — NOT PRESENT

T/P field present — Match — Add 32 — No change

Mismatch — No change

T/P field not present Mismatch No change — No change

IDENT — CLIENT FIELD — CLIENT FIELD

PRESENT — NOT PRESENT

T/P field present — Match — Add 33 — No change

Mismatch No change

T/P field not present — No change — No change

"EXIT" in the previous diagrams means no further checking is performed.  The checks already done have determined that this service pensioner cannot possibly match this tax-payer.

When the match score for each tax-payer in the candidate group has been established, the scores are checked to find the tax-payer or taxpayers with the highest positive score.

If all taxpayers in the group have a negative score, the transaction is unmatched,

Transactions are given a Match Score of either 1 or 2, 1 = a SCORE that is greater than 31, and 2 = a SCORE that is between 0-31.  For this matching exercise only transactions with a Match Score of 1 will be provided as output to the Branch Offices.