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Above image: Left- SMSes sent in the 'Timely reminders to report on time' trial; Right- SMS confirmation sent in the "Improving government confirmation processes" trial/ Credit: BETA

Above image: Left- SMSes sent in the 'Timely reminders to report on time' trial; Right- SMS confirmation sent in the "Improving government confirmation processes" trial/ Credit: BETA

Australian Government’s Behavioural Economics Team trials SMS use for improving citizen-government interactions

The Australian Government’s central unit for behavioural economics in public policy, the Behavioural Economics Team (BETA), has released two reports on the effective use of SMS for improving interactions between citizens and the Government.

In the ‘Timely Reminders to Report on Time’ study, BETA partnered with the Australian Government Department of Human Services (DHS) to trial whether providing targeted, timely and behaviourally informed prompts about reporting income, via SMS, improves the number of recipients who report on time.

For Australians looking for work, Newstart Allowance and Youth Allowance (other) are the main payments provided by the Australian Government. In 2016, these payments totalled AU$10.95 billion. People who receive these payments must report their income every fortnight to ensure they receive the correct payment. In any given fortnight over 80,000 people (or 9 per cent) are late reporting their income and approximately 3,100 people are so late their payments are cancelled.

There are three common biases which influence late reporting: Cognitive overload (a person is overwhelmed with the amount or context of information provided to them); Procrastination (people are short-sighted and often put off decisions or behaviours, even those in their best interests); and Optimism bias and overconfidence (tendency to be unrealistically optimistic, leading to people being overconfident about their ability to report on time).

Drawing on these behavioural insights, BETA designed three types of SMS reminders sent the day before the income report was due: a short and simple reminder (short group); a reminder emphasising the costs of not reporting (loss frame); and a reminder making the benefits of reporting on time more salient (gain frame). Each message was sent in two versions: a personalised and a non-personalised version.

The ‘Loss Aversion’ type read “Your next Centrelink report is due tomorrow. Do this online or use our Express Plus app. We cannot make a payment until you report. Do not reply by SMS.”. The ‘Short’ type read “Your next Centrelink report is due tomorrow. You can do this online or use our Express Plus app. Do not reply by SMS”; and the ‘Gain frame’ type read “Your next Centrelink report is due tomorrow. Do this online or use our Express Plus app. Report on time to get a payment on time. Do not reply by SMS.”

BETA then tracked and measured the effect these messages had on income reporting and then compared these results with people who did not receive a reminder. It was found that sending any SMS reminder had a big impact, increasing the number of people who reported on time by 13.5 percentage points, with those who received an SMS reminder reporting sooner (66.6%) than those who did not (53.1%).

The team also looked at how late individuals were, who didn’t report on time. Those who did not receive an SMS reminder were, on average, 1.9 days late. Sending any SMS reminder reduced the average number of days late by 0.65 days to 1.2 days

Some reminders also resulted in fewer payment cancellations (down by 1.7 percentage points from 3.9 per cent to 2.2 per cent).

Additionally, people who are habitually late reporters were more responsive to SMS prompts. Habitually late reporters may simply be prone to forgetting their reporting obligations or may face circumstances that make it especially difficult to manage their affairs.

The team concluded that simple cost-effective SMS reminders (the average cost of an SMS was 9 cents) can have a two-fold benefit for Australians and the Department. The reduced likelihood of their income support payment being delayed or cancelled is both financially and cognitively beneficial for people. For the Department, applying the results to the full late reporting population, could shift 10,800 more people to report on time, saving approximately 240 hours of work every fortnight. These saved resources could be moved to other areas of the Department. The associated reduction in contact with the Department would also lower the burden on telephone services, making it faster and easier for others to get through.

Image credit: BETA

The second trial ‘Improving Government Confirmation Processes’ , sent a confirmation SMS to parents who were changing their Child Support assessment, making the whole process more transparent.

The Child Support Scheme ensures children receive an appropriate level of financial support following the separation of their parents. In 2016-17, the Australian Government DHS’ Child Support Agency oversaw more than $3.5 billion worth of transfers to support approximately 1.2 million children.

Under special circumstances for parents or children, a ‘Change of Assessment’ form has to be ldoged with the Department to adjust the amount of child support.

Parents often follow up with a call to enquire if their form has been received. Usually, the parent is told whether the form has arrived and to expect to be contacted in due time. BETA partnered with DHS’ Behavioural Insights Team and Child Support Team to simplify the process. Using behavioural insights, BETA designed a confirmation SMS and then ran a trial to see the response. The SMS confirmation parents received read: “Child Support has received your Change of Assessment form. You do not need to do anything. We will call you in the coming weeks. Do not reply by SMS”.

The objective was to address: Uncertainty avoidance (leads individuals to call the Child Support area to reduce their uncertainty); Trust and reciprocity (helps ensure positive, functional, effective relationships between citizens and the Government); and Lack of feedback (increases uncertainty).

Image credit: BETA

The confirmation SMS not only reduced the number of parents who called (down by 11.3 percentage points from 41.9 to 30.6 per cent), but if they did call, they would do so later (median time to call increased by 13 days). Based on these results, if everyone who submitted a change of assessment form received a confirmation SMS, there would be approximately 2,100 fewer phone calls made every year.

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