Budget 2018: Government funds Centrelink, Medicare payment system overhauls

The government plans to spend $316.2 million over four years as it enters the third stage of its massive overhaul of Australia’s welfare payment system.

The Welfare Payment Infrastructure Transformation (WPIT) kicked off in July 2015. It is planned to be completed in 2022. WPIT has been split up into five phases, with phase two, which is expected to be completed this year, beginning in January last year.

The total cost of the WPIT overhaul, which involves the replacement of Centrelink’s aging welfare payments system, is expected to be around $1 billion. WPIT is replacing a 1980s system based on the Model 204 (M204) database for IBM mainframes.

The government in 2016 revealed SAP had been selected as the preferred core software vendor for the program.

The government claims that WPIT has already delivered efficiencies, with phase one cutting the average processing time of Youth Allowance and Austudy claims from nine weeks to under five weeks.

“Those claiming job seeker, age and disability pensions and carer payments will be the next to reap the benefits from digital transformation,” said a statement released by human services minister Michael Keenan and social services Dan Tehan.

WPIT is delivering “more efficient and automated claim, assessment and payment processes,” budget documents state.

Funding for the third tranche was already included in the forward estimates, with the government revealing in the 2016-17 MYEFO that efficiencies of $103.7 million over four years from 2017-18 would be realised.

As of the end of March this year, the spend on the second trance of WPIT was $173.2 million.

The budget also includes $106.8 million over four years from 2018-19 “to modernise the health and aged care payments systems and ensure that the Government continues to own and operate the ICT systems that support the delivery of Medicare, the Pharmaceutical Benefits Scheme, aged care and related payments into the future.”

“This measure includes funding for replacing and decommissioning ageing ICT systems, upgrading cyber security, and introducing user experience improvements for consumers and providers of health and aged care services,” budget documents state.