Centrelink debts slashed after welfare recipients speak out in media

Extract from ABC News

7.30

By Pat McGrath

Updated about 5 hours ago

Video: Hopes that crackdown on Centrelink benefits will be overturned (7.30)

Related Story: Labor calls on audit office to investigate Centrelink debt recovery scheme

Related Story: 'Keep this in context': Centrelink defends debt recovery scheme

Centrelink has slashed the debts of two welfare recipients after they spoke out about the Federal Government's controversial $4.5 billion debt clawback program.

Key points:

• Two welfare recipients had their Centrelink debts cut after speaking out on 7.30
• George Birkett had his debt of more than $7,000 wiped clean
• Amanda Stilbe had her debt slashed from $1,338.07 to $497.03
• Labor wants the audit office to investigate the scheme

Amanda Stilbe and George Birkett spoke to 7.30 on Wednesday about letters from Centrelink accusing them of underreporting their income while receiving benefits.
Ms Stilbe received a call from a Centrelink representative around 8:00pm (AEDT) on Wednesday, just minutes after the program finished, informing her that her debt had been reduced from $1,338.07 to $497.03.
"He said that an employee had entered some data incorrectly so he got them to do a manual recalculation," she said.
"He even gave me a direct number to call him on if I had any more questions. There [is] no way this would have happened if I hadn't spoken out in the media."
Ms Stilbe said she intended to dispute the remaining debt.

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'The debt had been wiped'

The Federal Government and Centrelink have been faced with a massive backlash over the automated system that has been used to match welfare recipients' reported income.
Since July last year, Centrelink has sent debt notices to almost 170,000 Australians it says have underreported their pay.
Mr Birkett was sent a debt of more than $7,000 after Centrelink determined that reimbursements he received for travel costs as part of his job should have been reported as income.

Photo: George Birkett has had his Centrelink debt of more than $7,000 wiped. (ABC News)

But Mr Birkett's debt was wiped on Friday, two days after he spoke to 7.30.
"I rang them with some information that I had been given by Victorian Legal Aid, and by the time I got through to the compliance unit they said it had all been sorted out and the debt had been wiped," he said.
"And they said that the money they had already started deducting from my pension to pay the debt would be reimbursed some time in the next two days."

Labor calls for investigation

Speaking to 7.30 on Wednesday, Social Services Minister Christian Porter defended the debt recovery program.

How the debt recovery system works:

• The system sends you a letter advising you of a potential welfare debt and asks you to review its figures online. It also sends an SMS
• When you log on you can update the information. You have 21 days from the date of the letter to go online and update
• If you don't log on, Centrelink will make a default judgement its information is accurate. You will then be issued with a debt notice
• If you do update the information, Centrelink may ask you to provide supporting documentation. This can include bank statements, letters from an employer, or payslips
• If you think the decision is wrong you can ask for a review
• If you or someone you know needs help, call Lifeline on 13 11 14

"The debt has been raised against the individuals in question because they failed to respond to the initial notice requesting information," he said.
"We are under an obligation to the taxpayer to check when a difference is highlighted between reporting to the ATO and reporting to Centrelink which is correct, and if you don't respond to that request for information inside the 21-day period, then a debt may be raised against you."
Ms Stilbe said she was "furious" after watching Mr Porter's comments.

"That was unbelievable," she said.

"I got in touch with Centrelink two days after my initial notice and told them my income for the year which they were asking about. But it didn't change anything because they only asked about my total income for the year, not how much I was earning every fortnight."
Welfare groups and community lawyers have urged the Government to put the program on hold and investigate whether a glitch in the system resulted in people being sent incorrect debt notices.
Labor's human services spokesperson, Linda Burney, has written to the Australian National Audit Office asking them to investigate the program.
"The number of complaints to my office and my colleagues' offices has been overwhelming," her letter said.
"There is considerable public concern over the administration of this program as well as a lack of clarity around the value of 'savings' derived from the program to date."
The Department of Human Services has been contacted for comment.

More on this story:

• Centrelink cut SA student's payment without warning, MP claims
• Labor calls on audit office to investigate Centrelink debt recovery scheme
• Centrelink defends debt recovery scheme after Andrew Wilkie criticism
• Porter defends Centrelink amid debt recovery row
• Centrelink staff to get 'customer aggression' training amid debt row
• Centrelink debt recovery system designed by 'dunderhead', Andrew Wilkie says
• Centrelink debts slashed after welfare recipients speak out in media