The government agency with a backlog of more than one million claims

Services Australia has a backlog of about 1.1 million unprocessed new claims across both health and welfare payments, contributing to Australians waiting months for access to payments such as the age pension.

In his first interview in the role, the agency’s chief executive, David Hazlehurst, said he intended to slash the backlog by up to 60 per cent by the middle of this year, helped by 3000 new recruits.

Services Australia chief executive David Hazlehurst was mobbed for selfies by some of the new recruits at the Parramatta office last week.Credit: Dominic Lorrimer

Services Australia is the agency that manages Centrelink, Medicare and Child Support. Hazlehurst’s target was to have 400,000-500,000 claims on hand at any one time, given Services Australia manually processes about 19.2 million claims every year and new claims are received every day.

In numbers to be revealed in Senate estimates later this week, Hazlehurst said the backlog included about 775,000 manual Medicare claims and about 360,000 welfare and social security claims.

The welfare claims are only 17 per cent of the annual manually processed claims, but nearly a third of the backlog, resulting in long waits for pensions, unemployment payments, parental leave pay and other benefits. The Sydney Morning Herald and The Age reported on Monday that new parents were often waiting three months to receive parental leave pay from the government.

“With the age pension, we aim to have 80 per cent of those claims done in 49 days and, at the end of December, 72 days was our average, so that’s clearly not where we want it to be,” Hazlehurst said.

“That feeds through into phone calls. The average time that people are waiting is around 33 minutes over the year to date, particularly in relation to the welfare and social services side of things. We’d like that to be more like 15 to 16 minutes.”

Fiona Guthrie, chief executive of Financial Counselling Australia, said the delays for welfare entitlements had huge impacts on people, and it was “demoralising and frustrating”.

“Financial counsellors have clients who are at risk of becoming homeless because of lack of income,” Guthrie said. “Parents are struggling to provide for their children and put food on the table three times a day.”

Hazlehurst said Services Australia was prioritising disaster relief, managing to answer most calls for flood assistance in South East Queensland within a minute and processing claims quickly as well.

Services Australia chief executive David Hazlehurst says a backlog of 1.1 million unprocessed claims is too high.Credit: Dominic Lorrimer

Hazlehurst said he would put more staff on the telephone lines, but the main focus was speeding up claims processing because when people are waiting they will also ring to follow up, resulting in more calls.

Government Services Minister Bill Shorten announced funding of $228 million in November for an additional 3000 permanent frontline staff at Services Australia, blaming the former government for slashing staff numbers during the robo-debt era.

The workforce of 30,000 is about 7000 lower than in June 2012, when the Department of Human Services was formed from the merger of Centrelink, Medicare and Child Support. The department became Services Australia in 2019.

Hazlehurst said benchmarking in 2020 identified that the resourcing would not be enough long term, but the agency was provided with emergency resources for increased workload during the COVID-19 pandemic. The backlog grew last year once the extra COVID resources fell away.

Services Australia will not clear the backlog as quickly as it could because the agency has switched off some of its automation processes following the robo-debt debacle, which a royal commission found to be illegal.

“Naturally, we’re very sensitive to getting things right around [the use of technology and automation] with the experience of robo-debt for example,” Hazlehurst said.

“We’re really wanting to make sure that [with] everything we do that uses technology to make us more efficient, people can understand how it’s working, it’s done fairly, and ethical considerations are taken into account.

“We’ve actually turned off some of what was able to be done in an automated way, so that we’re making sure that we’re getting absolutely everything right.”

Hazlehurst said more automation would be added in the future, but it would be done openly, not “in some sort of black box mysterious kind of arrangement”.

Hazlehurst is a veteran public servant who most recently worked on the reviews of the National Disability Insurance Scheme and myGov, and was a former deputy secretary for the Department of Agriculture.

He started his job at the helm of Services Australia amid a hiring spree at the agency. More than 800 people started on the same day as he did in mid-January.

Overall, he said the agency had hired about 4000 new starters since November, including the newly funded positions and natural turnover, which was a big recruitment, training and integration effort considering it was more than 10 per cent of the workforce.

The staff across Australia are already working the phones as the agency experiments with combining on-the-job practice with formal training. The new joiners in Parramatta have physical red flags under their desks that they can wave in the air whenever they need extra help with a call.

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