The Architecture of Negligence: What the Forensic Audit Reveals About Australia's Age Pension

*This article is a plain-English summary of the full forensic audit report, "The Architecture of Negligence," authored by Scott Hill, CEO of the Australian Pension Community Support Network. The full 18-page report with 33 citations is available to [download here](/report).*

The Headline Finding

The Australian National Audit Office (ANAO) identified approximately **$5 billion in incorrect pension payments** made by Services Australia between 2021 and 2024. Of that figure, **$1.33 billion represents direct underpayments** — money that was legally owed to seniors but never paid.

This is not a rounding error. It is a systemic failure.

The Processing Time Crisis

At the peak of the crisis in early 2024, the average time to process an Age Pension claim had blown out to **84 days** — nearly double the agency's own 49-day target. With **1.52 million claims outstanding**, seniors were being forced to deplete their savings, rely on family, or go without income while waiting for their legislated entitlement.

The report documents that phone wait times exceeded one hour on more than 57% of operating days, cutting off the only alternative for the 25.3% of elderly Australians who lack the digital skills to use myGov.

The 2017 Asset Test: Engineering Exclusion

In 2017, the government doubled the asset test taper rate from $1.50 to $3.00 per $1,000 in assets. The result:

• **100,000 seniors lost their pension entirely**
• **200,000 saw significant reductions**
• For couples with assets between $400,000 and $1,000,000, the effective "tax" on savings is **7.8% per annum** — often exceeding investment returns

The report describes this as "engineering exclusion" — a policy change designed to reduce the pension roll while appearing to be a technical adjustment.

The Digital Moat

The "online-first" mandate has created a technological barrier for the most vulnerable seniors. The 2025 Australian Digital Inclusion Index shows **66.5% of Australians over 75** lack the skills to navigate myGov. For these seniors, the phone is the only option — and the phone is effectively unavailable.

The report calls this "exclusion by design": the system is not broken for these seniors; it is working exactly as a fiscal gatekeeper would want it to work.

Who Is Most Affected

The report identifies six groups facing disproportionate harm:

| Group | Primary Barrier |

|---|---|

| Women 65+ | Lower lifetime earnings and superannuation gaps |

| Private renters | Rent Assistance indexed to general CPI, not market rents |

| Migrants | Rigid identity documentation requirements |

| First Nations elders | Historical records not accepted; digital exclusion |

| Over-75s | 66.5% digitally excluded from myGov |

| Self-funded retirees | Unaware of changed eligibility after superannuation erosion |

The Fiscal Logic of Friction

The report asks a pointed question: *who benefits from this friction?*

The answer is uncomfortable. By pushing processing times from 49 to 84 days, the government effectively delays millions in payouts. By making the system complex enough that an estimated 5% of potential claimants give up, the government saves hundreds of millions annually. The report estimates the total annual financial loss to seniors from this "system friction" at a conservative **$790 million per year**.

What Needs to Change

The report makes 13 recommendations. The most urgent are:

1. **Abolish the $3.00 taper rate** — revert to $1.50 per $1,000 to end the savings disincentive trap

2. **Mandate proactive eligibility matching** — legislate Services Australia to contact eligible non-claimants using its own data

3. **Establish a "Human Guarantee"** — legislated 15-minute maximum phone wait times and a right to in-person service

4. **Index Rent Assistance to market rents**, not general CPI

5. **Adopt flexible identity evidence** for First Nations elders

6. **Establish an Algorithm Ombudsman** to audit automated processing for fairness and accuracy

What You Can Do Now

If you believe you are being underpaid or have been wrongly denied the Age Pension:

• Use our **[Eligibility Checker](/eligibility-checker)** to assess your entitlement
• Use the **[Underpayment Checker](/underpayment-check)** to identify potential back-payment claims
• Use the **[AI Case Assistant](/case-assistant)** for personalised guidance on your situation
• Download the **[full report](/report)** to share with your MP, a journalist, or your community group

The Age Pension is not a gift from the government. It is a deferred wage and a fundamental pillar of the Australian social contract. You have a right to it.