Centrelink’s indiscriminate use of a 10% recovery fee on welfare debts could be unlawful, welfare rights groups believe.
The “robo debt” system slugged almost 97,300 Australians with a 10% recovery fee in the last six months of 2016. The fee has been applied to two of every three debts raised under the robo debt system.
The 10% penalty has traditionally been used to punish those who fail to give accurate income information to Centrelink, where they either have no “reasonable excuse” or deliberately withheld details.
Under the old system, Centrelink officers would contact the debtor and give them a chance to explain. The officers would then assess whether it was reasonable for the person not to have provided Centrelink with the information.
But the new system, in many cases, is simply imposing the penalty automatically.
The National Social Security Rights Network’s executive officer,
Matthew Butt, believes that is unlawful. He has called for the use of
the penalty to be stopped.
“The minister says that the system is about ensuring people get what they are entitled to, no more, no less,” Butt said. “The penalty should be removed [including retrospectively].”
The government’s own guidelines to social security law state that discretion must be used to determine whether an individual has a “reasonable excuse” for failing to provide Centrelink with accurate information. That means it must be decided on a case by case basis and according to individual circumstances.
The guidelines state that decision-makers must take into account a person’s age, health, level of education, literacy and other personal factors.
“When determining if a person has a reasonable excuse for failing to declare income, the person’s circumstances must be considered,” the guidelines say.
The automated system does not do this, according to Butt.
The system does ask whether an individual’s personal circumstances prevented them from reporting accurately. But Butt says this does not go far enough. He says the system still effectively automates a decision that should be made using individual discretion.
“There appears to be a question in the new system intended to give people some opportunity to explain,” Butt said. “But it is voluntary and some of our clients did not answer it.
“But, even with this question, we still have serious concerns that the use of a computer system to apply this penalty is in breach of basic principles of administrative law.”
The 10% fee is being imposed automatically when a welfare recipient does not receive or respond to Centrelink’s correspondence about their debt.
It can also be imposed when a person logs on to Centrelink’s online system and simply confirms that the information from the Australian taxation office is accurate.
The now defunct Administrative Review Council found in 2004 that automating discretionary decisions would be in breach of administrative law. It found that “expert systems should not automate the exercise of discretion”.
“It is the council’s view that the automation of discretion is not in accordance with the administrative law values of lawfulness and fairness because it could fetter the decision maker in the exercise of their discretionary power,” the council found.
Butt said that view applied directly to the robo debt system.
“We hold the same view and think that it is likely to breach this rule against fettering to continue to apply the 10% penalty with the [online compliance intervention] system,” he said.
The system does ask welfare recipients whether there were any personal circumstances that stopped them from providing accurate information to Centrelink in the past. It also gives them the chance to ask for a reassessment, lodge an appeal, or make a complaint.
The guidelines also say that the fee can be imposed if individuals fail to respond to Centrelink within 21 days.
The Department of Human Services was approached for comment.
The “robo debt” system slugged almost 97,300 Australians with a 10% recovery fee in the last six months of 2016. The fee has been applied to two of every three debts raised under the robo debt system.
The 10% penalty has traditionally been used to punish those who fail to give accurate income information to Centrelink, where they either have no “reasonable excuse” or deliberately withheld details.
Under the old system, Centrelink officers would contact the debtor and give them a chance to explain. The officers would then assess whether it was reasonable for the person not to have provided Centrelink with the information.
But the new system, in many cases, is simply imposing the penalty automatically.
“The minister says that the system is about ensuring people get what they are entitled to, no more, no less,” Butt said. “The penalty should be removed [including retrospectively].”
The government’s own guidelines to social security law state that discretion must be used to determine whether an individual has a “reasonable excuse” for failing to provide Centrelink with accurate information. That means it must be decided on a case by case basis and according to individual circumstances.
The guidelines state that decision-makers must take into account a person’s age, health, level of education, literacy and other personal factors.
“When determining if a person has a reasonable excuse for failing to declare income, the person’s circumstances must be considered,” the guidelines say.
The automated system does not do this, according to Butt.
The system does ask whether an individual’s personal circumstances prevented them from reporting accurately. But Butt says this does not go far enough. He says the system still effectively automates a decision that should be made using individual discretion.
“There appears to be a question in the new system intended to give people some opportunity to explain,” Butt said. “But it is voluntary and some of our clients did not answer it.
“But, even with this question, we still have serious concerns that the use of a computer system to apply this penalty is in breach of basic principles of administrative law.”
The 10% fee is being imposed automatically when a welfare recipient does not receive or respond to Centrelink’s correspondence about their debt.
It can also be imposed when a person logs on to Centrelink’s online system and simply confirms that the information from the Australian taxation office is accurate.
The now defunct Administrative Review Council found in 2004 that automating discretionary decisions would be in breach of administrative law. It found that “expert systems should not automate the exercise of discretion”.
“It is the council’s view that the automation of discretion is not in accordance with the administrative law values of lawfulness and fairness because it could fetter the decision maker in the exercise of their discretionary power,” the council found.
Butt said that view applied directly to the robo debt system.
“We hold the same view and think that it is likely to breach this rule against fettering to continue to apply the 10% penalty with the [online compliance intervention] system,” he said.
The system does ask welfare recipients whether there were any personal circumstances that stopped them from providing accurate information to Centrelink in the past. It also gives them the chance to ask for a reassessment, lodge an appeal, or make a complaint.
The guidelines also say that the fee can be imposed if individuals fail to respond to Centrelink within 21 days.
The Department of Human Services was approached for comment.
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