Millions of Australians' Centrelink and Medicare files are being handed over to a United States multinational corporation as the federal government closes filing warehouses around the country.
A record management unit in Darwin has been closed by the Department of Human Services while a warehouse in Adelaide will shut next year. Storage units in Townsville and Tasmania are open but "under review".
The warehouses hold decades worth of Medicare, Centrelink and Child Support Agency files.
Human Services says the role of US-based Iron Mountain in managing the records will grow as each storage unit closes.
The news comes as the department seeks private players to take over Medicare payments, and Telstra employees prepare to answer phones in some government call centres from next month.
Record management units are giant, secure, federal government warehouses storing millions of paper files created over decades, with all staff subject to security clearances.
The paper files contain personal information, including the medical and financial data of citizens claiming welfare benefits like Newstart, pensions, disability benefits and child support.
Files are often retrieved from the archives as Centrelink workers assess claims or ongoing eligibility. However, for several years, all new files have been electronic.
DHS spokesman Hank Jongen confirmed Iron Mountain would take over the storage of the South Australian files in March 2015.
"Following an assessment of the most efficient and cost-effective option to continue managing paper records in Adelaide from this date, arrangements are under way to transfer relevant files to secure storage managed by the department's outsourced records management provider, Iron Mountain," he said.
Mr Jongen said the bill for the deal with Iron Mountain, which had been in place since 2011, would not change but closing the Adelaide warehouse would save the taxpayer $1.12 million per year.
"All staff currently working at the Adelaide RMU warehouse will continue to work from alternative department premises," he said.
"Expenditure for outsourced records management is expected to remain steady in line with previous years, while the consolidation of the department's records management warehouse facilities has resulted in ongoing lease and utility savings of approximately $1.12 million per year."
He said there were no plans to close the remaining warehouses but their futures would be considered as leases expired.
"There are no immediate plans to change operations at the record management units in Perth, Brisbane, Sydney and Melbourne," Mr Jongen said.
"As the department continues to move more of its business online, changing customer preferences have resulted in a reduction of incoming paper across the department.
"The majority of incoming paper is now scanned and sent electronically for processing, removing the need for the paper to be stored.
"Existing records are also destroyed at the end of their required retention period.
"This has reduced the demand for hard-copy file storage through the department's record management units.
"As each of the department's RMU leases fall due for renewal, the department undertakes a review to determine the most efficient and cost-effective solution for managing the department's records in that location."