Centrelink to replace crucial mainframe welfare calculator

The Department of Human Services is preparing to rip and replace its complex welfare payments entitlements engine from its 30-year-old welfare payments system.

It last week opened bids for a new calculation engine solution to determine how much welfare recipients are paid through the country’s new SAP-based Centrelink payment platform.

The all-important solution is the first major procurement under the massive billion-dollar welfare payments infrastructure transformation (WPIT) program since systems integration in 2016, which Accenture subsequently won.

The build promises to be a “significant” project of the WPIT program so far, as it deals with the complex and high-risk task of deciding the eligibility of customers.

“Determining eligibility and calculating entitlements is one of the most complex and high-risk aspects of the department’s delivery of health and welfare payments to Customers,” tender documents state.

The department has also warned industry of the complexity of the current calculation engine, which is integrated within the legacy income security integrated system (ISIS) and based on Model 204 technology and some COBOL rate calculators.

However, the age of the system, coupled with the fact that business rules distributed across the department’s mainframe applications, makes responding to legislative or departmental changes difficult.

“The current entitlement system caters to the highly complex and interdependent social security legislation that has evolved over the life of the system,” the department said.

“The M204 software has been extended and enhanced many times in the last 30 years to service the current level of complexity and performance requirements as a result of legislative changes, increasing numbers of customers, and richness of the interdependencies between data and business rules.”

It said the current “assessment process chain” - which runs tens of millions of processes each day - is responsible for around 40 percent of the IBM z13 mainframe CPU consumed by M204, but that his excluded peak processing periods.

To address these challenges the department will build a new solution with a single master entitlements rules repository over the next two years to decouple business rules from processing.

It's "simplified architecture" will also increase efficiency by allowing faster changes “to the business rules embodying the key logic” that supports between 100,000 and 600,000 calculations an hour.

The replacement is expected to be a fully configurable end-to-end solution, consisting of software, implementation services and support and maintenance services.

It will also need to ingest data directly from customers to determine their entitlement, and capture processing coordination and entitlements calculation data that can be fed into a data lake for analysis.

DHS expects to select an initial shortlist of two or more respondents that will proceed to competitive dialogue approach from November.

It will use the competitive dialogue process to understand the suppliers proposed solution, providing participants with up to $500,000 to develop a prototype.

Like previous WPIT procurements, whether or not payments are awarded to the selected supplier depend on its ability to meet milestones.

This second state will follow a similar approach to the rest of the WPIT procurements to date, with the respondent to work with the department on technical design of the solution for a 13-week approach.

The new solution is expected to be completed during 2021, and will be incrementally deployed to allow the department to mitigate any risks.`

“The entitlement capability is a critical piece of the future state architecture and will be fundamental in supporting the systems and programmes in the department that deliver meaningful impact to the Australian economy and to the lives of Australians,” the department said.