Government confident in Centrelink debt compliance system despite reported errors

Extract from The Guardian

The new compliance system introduced by Centrelink sent a single mother a $24,000 debt notice just before Christmas and there have been calls for it to be suspended

Department of human services general manager Hank Jongen said the government remained confident in the compliance system and the ‘associated checking process that we go through with customers’. Photograph: Julian Smith/AAP

Christopher Knaus
Thursday 29 December 2016 06.05 AEDT

The government says it remains confident in its new automated system for retrieving welfare debts, despite continued reports it is unfairly targeting vulnerable and low-income Australians.
Guardian Australia has received dozens of reports of errors about the new compliance system in recent weeks, including from a single mother who says she was wrongly issued a $24,000 debt two weeks before Christmas.
The system, introduced in July, works by automatically comparing income reported to Centrelink with information held by the Australian taxation officer. Where discrepancies are detected, Centrelink gives people three weeks to prove they were entitled to receive the benefits, which can be up to six years old.
The data-matching process was previously done manually. A Centrelink compliance officer told Guardian Australia last week that the automated system was too crude, generated a large number of errors and treated welfare recipients unfairly, particularly those on sickness allowances.
She said only a fraction of the cases she had reviewed were genuine debts but many people were paying the government back regardless.
Questions about the system were again put to the human services minister, Alan Tudge, on Wednesday. Tudge was on leave and the questions were referred to the department.
The Department of Human Services’ general manager, Hank Jongen, said the government remained confident in the compliance system and the “associated checking process that we go through with customers”.
“When data inconsistencies are detected, the system generates a letter ... advising people of the discrepancy and asking them to either confirm or update their details online using myGov,” he said.
“If, for example, an employer has incorrectly reported the time period for which income was earned, people are able to correct this information themselves using the online tool.
“If the employment income was earned before they began receiving or after they stopped receiving income support payments, then they will not incur a debt.”
He said 72% of those who received an online compliance letter since September had resolved the issue online. He said only 2% were asked to provide supporting documentation, like pay slips.
Complaints about the system were first raised by independent MP Andrew Wilkie earlier this month. Wilkie has since referred the matter to the Commonwealth ombudsman.
The system has been described as a “drag net”, which sends out about 20,000 notices a week that effectively reverse the onus of proof onto welfare recipients.
Many individuals do not receive the initial letter from Centrelink, due to either a change of address or the lack of a MyGov account. If no dispute is made, the government takes it to mean that the debt is accurate.
The government is charging 10% debt recovery fees, and Tudge has threatened those who do not pay with jail. Many problems appear to stem from the comparison of annual pay information reported to the tax office with the income reported to Centrelink fortnightly.
Labor, Wilkie, and the Australian council for social service (Acoss) have all called for the system to be temporarily suspended pending an investigation into the complaints.