Services Australia has agreed to document the business rules used by its 40-year-old mainframe-based core system to calculate aged pension entitlements after a series of errant payments.
A federal audit this week [pdf] highlighted the case of an “IT system error” that remained unresolved for a decade and led to overpayment of entitlements totalling at $19.8 million.
The error, introduced with an update in June 2010, wasn’t picked up in regression testing and went undetected for so long in part because calculations are highly automated and staff are told to trust them.
“[Services Australia] does not have a process to independently calculate system-determined age pension payments, and it is difficult for staff to identify if system calculations are incorrect,” the audit stated, citing a January 2025 internal review by the agency.
“Staff are trained to trust system calculations and received limited training on conducting manual calculations to verify system-determined payment rates.”
Owing to the age of the mainframe-based system, known as the Income Security Integrated System or ISIS, “there is no available documentation that lists the business rules for age pension” calculations, Services Australia advised the federal auditor in 2024.
A risk assessment on the use of the automation is overdue.
In addition to pushing for this assessment to be completed, the federal auditor asked Services Australia to document the business rules implemented in ISIS for assessing aged pension claims – which the agency has agreed to do.
“Services Australia supports this recommendation and will work to ensure that business rules are appropriately documented,” the audit stated.
A replacement for ISIS was pursued a decade ago and, while parts of the system were modernised through the welfare payments infrastructure transformation (WPIT), that officially finished in mid-2022 and ISIS remains in use.