Service Australia’s digital journey to transform welfare payments

Digital transformation challenged by global pandemic.

Australia’s social services agency, Services Australia’s seven year digital transformation journey was put to the test at the height of COVID-19, when staff distributed urgent relief payments worth more than A$1 million within four days to 1,400 Victorians who required emergency support to isolate and quarantine. It also distributed more than A$1.2 million in one-off stimulus payments to 5,000 people experiencing hardship in the Australian Capital Territory.

While its previous payments platform, met the needs of the department, its staff needed a more modern, extensible, and agile solution that would enable them to rapidly enact new policy proposals.

To support its digital transformation, the agency embarked on a seven-year program designed to transform the delivery of its welfare payments and services called Welfare Payments Infrastructure Transformation (WPIT) based on SAP Public Sector Collection and Disbursement (PSCD) on SAP S/4HANA.

The platform, which leveraged machine learning and advanced and augmented analytics, has streamlined payments, standardised business processes and allowed for increased automation, enabling staff to improve how they process and distribute payments.

Since implementation, staff have been able to disperse A$3.5 billion in social benefits across 5.38 million payments. It is also enabling faster processing times with staff able to process half a million payments within five minutes.

The legacy system (ISIS), which is integrated into finance systems and the Reserve Bank, has done an amazing job in delivering payments for many years, however Services Australia needed a more modern, extensible and agile solution. The current platform is 30 years old and constrains the government’s ability to rapidly enact new policy proposals.

The Payment Delivery Capability project (as part of the WPIT program) is creating a new Payment Utility platform for Centrelink social welfare payments, based on SAP Public Sector Collection and Disbursement (PSCD) on SAP S/4HANA. As a payments infrastructure asset, the Payment Utility has the ability to deliver payment services on behalf of other government agencies.

Services Australia recently achieved a landmark when it successfully migrated the Parenting Partnered Payment from the legacy system. This paved the way for Pension to be progressively migrated to SAP S/4HANA, and now Pension Payments to Australian citizens are delivered by the Payment Utility.

The project will continue to migrate Centrelink payments from the legacy systems, said Charles McHardie deputy CEO Transformation Projects at Services NSW.

“Our new Payment Utility, based on SAP S/4HANA, simplifies the end-to-end automation of both inbound and outbound payments, and provides the ability to deliver combined, same-day payments to Australians receiving emergency payments, pensions and other social benefits,” he said.

According to McHardie the government agency now has:

  • A streamlined platform for all Centrelink payments, allowing for increased automation and the ability to provide same day payment capability with more information (i.e. New Payments Platform 280 character messaging with payment into the citizens banking application).
  • Standardisation of business processes and functions for outbound and inbound payments, and supporting functions for financial reporting and reconciliation.
  • Technical capabilities to support future initiatives for the agency to re-use, innovate, and reduce costs via partnering with the Reserve Bank of Australia (RBA) on new and emerging payments capabilities.
  • A foundation API and batch-enabled service, reusable by other government agencies and departments, designed and built to be agnostic of agency, providing leverage and scale through centralised processing.
  • Creation of a managed service that allows the use of the Payment Utility by Services Australia and is reusable by other government agencies and departments.
  • A new, scalable technical infrastructure designed to run 24x7x365 with high availability, full disaster recovery, and capable of processing all Federal Government payments.



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