$2.84b hole in public’s pocket

WELFARE cheats have pocketed millions of taxpayer dollars after the Department of Human Services overpaid $2.84 billion through fraud or error last year.

The department probed just one in 10 reports of suspected fraud — and only 709 people were prosecuted.

Families with children racked up nearly half the debt with overpayments of $1.2 billion in family tax benefits during 2016/17, News Corp can reveal.

The unemployed were overpaid $424 million in Newstart benefits with $346 million more overpaid in add-on welfare payments such as rent assistance.

The Department of Human Services (DHS) overpaid 2.4 million people an average of $1174 each during the year.

It recovered only half the debt, leaving taxpayers with a $1.6 billion bill.

Debt collectors were used to get back $126 million in overpayments, but most were recovered through deductions from ongoing payments.

Whistle blowers dobbed in 114,065 people for suspected fraud, but the department investigated just 13,595 cases and only 709 were prosecuted.

Welfare can be overpaid as a result of fraud, such as using a false identity or lying about income or family status. But overpayments also arise accidentally when families claim weekly payments based on a low income, but earn more than expected during the year.

A DHS spokeswoman said the amount of money spent on fraudulent payments was “not readily available’’.

Human Services Minister Michael Keenan said the government was “committed to cracking down on welfare fraud more than ever before’’.

“Taxpayers are happy to support those who are in genuine need, but they expect integrity in the system,’’ he said.

Mr Keenan said tip-offs about welfare fraud had identified $40 million in overpayments last financial year.

“The department invests substantial effort to ensure all tip-offs are dealt with appropriately,’’ he said.

Legislation to slash welfare spending by streamlining payments is stuck in the Senate, which has already rejected the government’s plan for random drug testing of jobseekers.

Community and Public Sector Union acting national secretary Michael Tull blamed a flawed information technology (IT) system for errors.

“The Turnbull government should invest properly in world-class IT systems with enough permanent staff to oversee them,’’ he said.

“Instead, they’ve cut thousands of permanent staff, outsourced debt work and left the department without enough resources to provide the kind of service that Australians need.’’