Australia’s age pension system, one of the nation’s most significant social support programs, has been hit by serious concerns after a new audit revealed billions of dollars in incorrect payments and widespread service delays affecting older Australians.
An investigation by the Australian National Audit Office has found that roughly $5 billion in age pension payments were incorrect over a three year period to 2023–24. The errors included both overpayments and underpayments, with the majority of mistakes resulting in pensioners receiving more than they were entitled to. However, more than a quarter of the incorrect payments involved seniors being paid less than their lawful entitlement, leaving vulnerable Australians short of vital income.
The age pension currently costs the federal government more than $62 billion a year and accounts for over 40 per cent of all social security payments. Around 2.7 million Australians rely on the pension, which is means tested and requires recipients to meet age and residency criteria.
The audit found that Services Australia, which administers the pension, has only partly effective systems in place to assess eligibility and calculate payment rates. A heavy reliance on income and asset declarations made by applicants was identified as a key weakness, with limited use of available data to verify information. This approach reduced the agency’s ability to accurately determine who should receive payments and how much they should be paid.
Automated systems play a major role in calculating fortnightly pension payments, but the audit highlighted risks linked to this reliance. These included insufficient assessment of system reliability and inadequate staff training to manually calculate payments when automation fails. Internal quality checks also fell below targets, and accuracy benchmarks were not met across consecutive financial years.
Delays in service delivery were another major concern. Seniors waited an average of more than six weeks for age pension claims to be processed, while phone wait times regularly stretched beyond an hour. Complaints related to the age pension surged by almost 80 per cent over two years, despite only minimal growth in the number of recipients.
The audit also criticised compliance efforts, finding they were not focused on areas most likely to generate payment errors and were not properly evaluated to determine whether they improved accuracy or reduced costs.
Oversight issues extended beyond Services Australia. The Department of Social Services was found to be monitoring payment delivery but failing to properly assess whether the pension was achieving its intended outcomes for recipients. This gap limited the government’s ability to understand the real world impact of the program.
Administration of the pension for veterans and their partners was also flagged as a concern, with governance arrangements remaining unchanged for more than a decade, raising questions about whether legislative and performance standards were being met.
The auditor-general concluded that improvements were urgently needed, including stronger eligibility checks, better targeted compliance, simpler claims processes, improved digital access for older Australians and reduced waiting times. Without reform, the report warned, ongoing errors and delays would continue to undermine confidence in one of Australia’s most important social safety nets.
In response, the responsible department acknowledged the findings and said steps had already been taken to address some issues, with further changes planned in the coming months.
