The federal government spent $2.1 million on a mailout to millions of age pensioners just days before the election was called, despite concern among officials that it amounted to political advertising.

The Department of Human Services sent taxpayer-funded letters to Australia’s 2.88 million age pensioners, alerting them to the new one-off energy assistance payment included in the April 2 federal budget plus other “beneficial changes” to the pension.

The mailout was on behalf of the Department of Social Services, which was responsible for the letter’s content. Minister for Families and Social Services Paul Fletcher authorised and signed it.

In response to questions from The Saturday Paper, the Human Services Department said: “The Department of Social Services confirmed prior to distribution that the letter wasn’t considered government campaign advertising.”

DHS said it “did not advise against distribution of the letter, provided it was not required to print or mail the letter during the caretaker period”.

DSS confirmed the two departments had negotiated over the timing.

“The Department of Human Services raised issues about the time frame for producing the letter, in light of the upcoming caretaker period, and potential service delivery impacts,” the DSS statement said. “The [DSS] and [DHS] worked through these matters. The letter was produced and distributed prior to the caretaker period.”

Other sources have told The Saturday Paper that some departmental officials remain concerned about both the nature of the letter and its timing, produced on the cusp of an election campaign.

Further, DSS said: “The department does not consider that the letter constitutes an information or advertising campaign as defined by the guidelines.”

Other sources have told The Saturday Paper that some departmental officials remain concerned about both the nature of the letter and its timing, produced on the cusp of an election campaign.

DHS received $9.2 million in the federal budget this financial year to assist with the administration of the new one-off energy assistance payment.

It has confirmed $2.1 million of that is being spent on the pensioner mailout.

The Saturday Paper understands the department engaged its contractor, Fuji Xerox, to print more than two million copies of the letter, working through the weekend of April 6 and 7 to have them printed and posted before the public service caretaker period began.

DHS did not respond to questions about the letters having been printed on a weekend or whether this incurred extra cost. It is also not clear whether they were sent standard mail or at a premium to ensure delivery before the caretaker period began on Thursday morning last week.

Instead of a brief informative message on Centrelink letterhead – which was how pensioners were told about a similar one-off energy payment in 2017 – this was a two-page letter bearing the Australian government coat of arms and minister Paul Fletcher’s signature.

“The Australian Government recognises the importance of providing sustainable support to Australian retirees,” Fletcher’s letter began, indicating he wanted to update recipients on “a number of recent beneficial changes”.

DHS confirmed that recipients of other welfare benefits also eligible for the one-off energy payment have not been sent such a letter and will not receive one until well after the May 18 election.

DSS said this was because the pensioners’ letter was not just about the energy assistance payment but “a range of measures related to age pension recipients”.

It said previous Labor ministers had sent out similar letters to carers in 2009 and that Fletcher had also written to 690,000 carers last month at a cost of $460,000.

The Saturday Paper understands that the pensioner mailout’s timing contributed to Prime Minister Scott Morrison’s decision not to call the election on the weekend immediately following the budget.

Instead, Morrison visited the governor-general four days later, early on the morning of Thursday, April 11, and had the parliament prorogued at 8.29am.

This meant senate estimates hearings that had been due to begin at 9am that day and to continue the next day and the following week were cancelled.

The Department of Social Services had been set to appear at an estimates hearing at 9am and the Department of Human Services was due to appear that night. DSS had already appeared before estimates on Friday, April 5 – the same day the emailed version of the letter went out to 880,000 pensioners who receive government communications electronically. This was before the hard copies had been printed and posted. Questions were raised in estimates about the energy payment but not about a mailout.

DHS told The Saturday Paper its $9.2 million budget allocation for the energy assistance payment covered the technological work required to administer it, customer service to respond to inquiries and “communication activities including letters to recipients”.

Those communication activities accounted for $3.2 million of that, of which $2.1 million was being spent on the pensioner mailout.

Much of the remaining $1.1 million of that communication funding will be spent on sending advisory letters to other welfare recipients eligible for the energy assistance payment.

But DHS confirmed these other letters would not be mailed out until June, when the payment is actually due.

Details of the age pensioners’ mailout emerged as the Victorian Liberal–National opposition accused the Victorian state Labor government of inappropriately spending $1 million of taxpayers’ money on advertisements targeting the federal Coalition government.

The Victorian state opposition referred the head of the Victorian public service and three other senior officials to that state’s anti-corruption watchdog this week over the ad campaign.

The advertisements say Victorians deserve “a fair share of funding” from the federal government. They were launched last Sunday, four days into the federal election campaign.

Speaking in Melbourne this week, Prime Minister Scott Morrison said the Victorian ads were designed to support Labor and its leader, saying he had “no doubt the state government here will do Bill Shorten’s bidding”.

Victoria’s attorney-general, Jill Hennessy, said the ads were “standing up for Victoria”.

Morrison’s election campaign has targeted pensioners and retirees, whom he argues would be worse off under a Labor government. He singles out those who receive cash rebates on shareholdings, known as franking credits, which a Shorten–Labor government would abolish.

“That’s not what our government will do,” Morrison said on Tuesday. “We will remain committed to supporting Australians as they retire.”

He said that included helping them pay their power bills.

At a February 21 senate estimates committee hearing, Labor senators asked DHS secretary Renée Leon about another controversial mailout, conducted for the Health Department.

Leon confirmed DHS had received $3.16 million in last year’s budget to mail 600,000 Health Department letters to people approaching the ages of 45 and 65 as part of its Better Ageing program. The letters were sent earlier this year.

Leon explained her department is the clearing house for mailouts from other departments, responsible for the printing and distribution of letters, but not for their content.

“We don’t have, and didn’t have, any involvement in the content of the letter,” Leon said of the previous Health Department mailout. “But we did provide the mailing list … The database spits out the letter with each person’s name and address on it and the approved content in it. It’s an electronic process, not a human-aided process, to produce the letters.”

The Health Department letters that were discussed in the February estimates hearing aimed to alert recipients to a website enabling them to undergo checks on their health, employment options and finances and help them stay healthy, active and independent.

They were printed on Australian government letterhead and signed by Treasurer Josh Frydenberg, who was described on them as “Deputy Leader of the Liberal Party”.

Labor senators raised concerns about those letters and accused the government of spending taxpayers’ money on what was effectively political advertising, potentially breaching the guidelines for information and advertising campaigns by non-Commonwealth entities.

Those guidelines say information campaigns “must not mention the party in government by name”.

“Campaigns must not try to foster a positive impression of a particular political party or promote political interests,” they say.

Campaigns also “must not be designed to influence public support for a political party, a candidate for election, a minister or a member of parliament”.

The guidelines define a campaign as “a planned series of communication activities that share common objectives, target the same audience, and have specific timelines and a dedicated budget”.

Governments may legitimately use public funds to explain government programs and inform people of their entitlements, but they must not be used for “party political purposes”.

It is this definition that DSS says does not apply to its pensioner mailout.

In the February questions on the Health mailout, Labor senator Murray Watt asked the minister representing the portfolio, Senator David Fawcett, why the government was “rorting taxpayers’ money to run an election campaign”.

“This is a budget measure aimed at providing information to a part of our population which is a growing percentage of our population,” Fawcett said.

Watt asked whether the Liberal Party intended to refund the money. He received no response.

Last week’s age pensioners’ letter details the pension increase that took effect on March 20 and the dollar values of the special energy payment, the ongoing energy supplement, the work bonus to take effect from July and “another benefit commencing on 1 July” – the expansion of the pension loan scheme.

The government unveiled its planned one-off energy payment of $75 for singles and $125 for couples in the lead-up to the budget, saying it would go to those on carers’, parenting, disability, veterans’ and war widows’ payments but not unemployed people on Newstart.

The morning after the budget, Treasurer Frydenberg revealed during a radio interview that the policy had changed overnight and would now be extended to Newstart recipients too.

Frydenberg said later that he, Morrison and Finance Minister Mathias Cormann had met late on budget night and decided to extend the payment because they “thought it was appropriate”.

This week, Treasury’s pre-election fiscal outlook confirmed that the extension cost $80 million and had increased the $4.3 billion budget deficit this financial year. A surplus is forecast for next year.

During the April 5 estimates hearing, DSS officials told senators they first heard an extension to Newstart recipients was likely in a phone call from a member of Minister Fletcher’s staff on budget night, Tuesday, April 2, advising them to prepare for “legislative and costing changes”.

Labor senator Jenny McAllister asked when the call came.

DSS deputy secretary Nathan Williamson said: “It was around the time of the budget speech.”

McAllister pressed him.

“My recollection is it was during it,” Williamson said.

He said departmental officials had worked on the changes through that Tuesday night and final policy authority had come “early on Wednesday morning”.

A senior official from the Department of Prime Minister and Cabinet told a separate estimates hearing she found out about the pending change when she was warned on budget night to expect a letter from DSS. The letter from Minister Fletcher to Prime Minister Morrison arrived later that evening.

The DSS officials confirmed about five million Australians would be receiving the energy assistance payment.

But it seems only half of them are having it specifically drawn to their attention before May 18.