Commonwealth Ombudsman ‘pleased’ by robodebt changes, legal challenges remain

By Stephen Easton

Thursday April 4, 2019

Centrelink has agreed to keep working on the robodebt system to make it fairer and more transparent in line with new recommendations from the Commonwealth Ombudsman, who is mostly happy with how the system has been improved in the past couple of years.

Following up on the office’s 2017 inquiry into the controversial system to see if the Department of Human Services and the Department of Social Services implemented its eight recommendations, in a way that achieved their intentions, ombudsman Michael Manthorpe is “pleased” at what progress has been made.

“However, I have formed the view that there is scope for further improvement,” he added in a statement. “I have therefore made further recommendations for the Department of Human Services to improve transparency and fairness by improving its communication to customers.”

The new report reiterates that “better project management, design, user testing and support for users of the online system” could have prevented the eight issues identified in the first inquiry. It details the steps taken by DHS in response to each and reveals the ombudsman has received fewer complaints after intervening.

“While the Office is seeing some increase in complaint volumes more recently, the increase appears to be a direct result of increased DHS compliance activity, rather than significant new systemic issues.

“Nevertheless, the Office will continue to conduct individual complaint investigations where appropriate, and make suggestions to the department to improve its administration where a systemic remedy is identified.”

According to the new report, “the proportion of debts reduced or found not to exist after a person contacts the department” has roughly halved since the ombudsman’s April 2017 recommendations were published.

“This is similar to the averages for the department’s other non EIC debt raising and recovery measures.”

Still, Manthorpe has given DHS a little more work to do and the department has agreed, with the support of the policy department DSS.

“These recommendations aim to improve transparency and fairness by ensuring customers have clear information about their debt and about the potentially adverse consequences of not providing relevant information,” he said.

Most recommendations mostly implemented

Manthorpe’s follow-up says nearly all of the original recommendations have been implemented.

The department’s undertaking to “clearly explain the concept of averaging” — when data from the Australian Taxation Office about a person’s income is spread across the year evenly, which can incorrectly suggest they were not entitled to the income support they received — is still a “work in progress” nearly two years on.

“In particular, letters should explain that if the customer does not go online or if they accept the ATO data, their income will be averaged over periods for which income has not been verified and debts based on averaged ATO income may be less accurate, especially if the customer’s income was fluctuating or intermittent.”

Work to improve “messaging” about the same general issue in online systems has mostly been completed.

Michael Manthorpe

The ombudsman approves of a new “enhanced online system known as the Check and Update Past Information (CUPI), which was informed by input from stakeholders, user testing and complaints data” for use by people who received robodebt letters after October 1 last year.

Others continue to use the older Employment Income Confirmation (EIC) online system, which did not meet the standard set by the ombudsman in 2017. “However, as there will be no customers using the EIC system without staff assistance by March 2019, the value in implementing recommendation 3 in the EIC online system is minimal,” the follow-up concludes.

The new recommendations

The ombudsman says DHS should explain why extra debt-recovery fees were applied in correspondence with people who incurred the extra charges prior to May 27, 2017, and explain their options for claiming their personal circumstances prevented them from reporting income in the past.

This would make communications with people in that earlier cohort “similar to the messaging included in improved notice of decision letters” sent more recently. The report explains:

“DHS has met recommendation 1 [of the first report] in respect of the 10 per cent recovery fee, by improving  messaging in letters and sending 114,653 letters explaining recovery fee review rights to people who had already incurred a recovery fee.

“However, we are mindful that 114,653 letters were sent by ordinary mail and email, so were not read receipted and may not have been received if  customers were no longer at the last known address held in DHS records.”

Secondly, the department has agreed to “provide an improved debt explanation in all compliance debt outcome letters within the next 12 months, irrespective of whether the customer completed the review online or through the assistance of a compliance officer”.

The third and fourth recommendations also go towards fairness between different cohorts and the need to clearly explain the situation.

“DHS should take steps to ensure that Check and Update Past Income (CUPI) initiation letters warn customers that if they do not check and update past information, DHS may use Australian Taxation Office (ATO) data to calculate any debt, which may mean they have to pay back more than they need to.

“It should explain, either in the letter itself or in linked or enclosed materials, such as a flyer, how averaging of ATO income works and the consequences this may have for any debt calculation.”

Over one million people got the older initial letters that weren’t good enough, in the ombudsman’s view, and some of them may not have understood all of their options and rights for review and therefore failed to exercise them.

“However, if made aware of the consequences, these customers may commence engagement with the department at any time, as there is no time limit for reassessments if new information is provided,” observes the ombudsman.

The fourth new recommendation calls for “clear information in compliance debt recovery correspondence, such as account payable notices and debt outcome letters, about the consequences of using ATO information and options available to customers”.

For public servants, the relevant DSS policy guidance was updated on November 5 and has been appended to the report.

There remains strong opposition to the way the Department of Human Services calculates and chases down potential debts and its legality is still being challenged. Former Administrative Appeals Tribunal member Terry Carney made the case in an academic paper last year, and the legal basis for the system is being challenged by Victorian Legal Aid, and the state’s former chief crown prosecutor Gavin Silbert.

Last year, lower-house independent Andrew Wilkie also reported the views of an anonymous whistleblower who claimed there were flaws in the process, stemming from database duplicates and repeated failures to recognise the difference between gross pay on payslips and net pay shown in bank statements, but the department denied these were systemic errors.

Robodebt’s strongest opponents will find little support from the main citizen’s advocacy body at federal level, which is not designed as an aggressive legal advocate for citizens, although the ombudsman’s new report confirms the office will continue to “separately monitor new complaints it receives about the program” and investigate if necessary.

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