'Computer says no' not good enough, warns Ombudsman

By David Donaldson

February 3, 2016

It’s a feeling we’re all familiar with: the frustration at being told “sorry, the system won’t let me make that change”; “computer says no“, as the Little Britain skit would have it.

But it becomes serious when you’re a vulnerable young person whose Centrelink income is partially withheld — despite legislated exceptions to being placed on income management — and you can’t pay your rent as a result.

review of Centrelink’s youth managed income program has prompted the Commonwealth Ombudsman to warn that automated processes must follow the law, ensure procedural fairness and should be dictated by policy, not the other way around.

The report follows a complaint by a young man who should have been exempted from income management due to the fact that it was “detrimental to his wellbeing” but was not. The situation resulted from a range of problems:

  • “Failures” in the Department of Human Services’ automated system to consider all information in coming to a decision;
  • The lack of a process for the department to fix the problem, despite having the legislative power to do so; and
  • Problems with DHS’s internal processes for referring requests to take a customer off income management to an authorised decision-maker to make a decision.

The Ombudsman also highlighted as concerns decision letters not providing adequate explanation and “a failure to inform people of their rights”. Some of the comments replicate the same administrative problems identified in a 2012 Ombudsman’s report on income management in the Northern Territory.

The initial complaint led to a “broader assessment of the legislation, policy and procedures relevant to the vulnerable youth measure, as well as DHS’ template letters, decision-making templates and workflows”, said Commonwealth Ombudsman Colin Neave.

Department slow to respond

After being assessed as eligible to fall under the vulnerable youth income management policy, which typically restricts the ability of the customer to spend half of their Centrelink income, “Mr G” informed DHS this meant he could not pay his rent in full, as it cost more than 50% of his income.

He complained to the Ombudsman that after six months of trying he had been unable to remove himself from income management, that DHS had not responded to requests, and that DHS had recently suspended payments. The Ombudsman then commenced an investigation into the complaint and “noted that DHS had restored Mr G’s payments the day after he lodged his complaint with our office”.

The Ombudsman found that workflow processes had not been observed. Mr G asked customer service officers “at least seven times” to be taken off income management, but instead of forwarding the request to a DHS social worker, as required, the customer service officers rejected his requests. When a social worker eventually reviewed his situation, they made the decision to temporarily take him off it.

Eventually the decision was made to take him off income management “on the basis that IM was considered detrimental to his wellbeing because it made it difficult for him to meet his rent payments, which exceeded 50% of his income, thereby exacerbating his housing instability and potentially placing him at risk of homelessness”.

The letter informing the client did not explain why the decision had been made. At other points reasons for decisions were not adequately recorded, either.

But after he moved out of the geographical area in which the policy applied, DHS’ automated assessment system ran a check on him, incorrectly finding him to still be eligible, and rolled over the application of income management to his situation. The Ombudsman found that:

“The fact that this error was able to occur in Mr G’s case, following an automated system check designed to reassess people’s VWPR IM [vulnerable welfare payment recipient income management] eligibility, suggests that the system check does not consider all of the relevant eligibility criteria that it needs to consider in order to make a new and valid VWPR determination.”

Beware automation of discretionary processes

By removing decision-making discretion from the process through automation, DHS had brought “into question the lawfulness of any and all decisions DHS has made to date to extend VWPR determinations for vulnerable youth”, stated the report. It recommended DHS “review all 12-month reconsideration decisions made to date, having regard to the applicable legislation”.

Notwithstanding the clear advantages of automated assessments to large programs such as Centrelink, the Ombudsman warned care must be taken to ensure basic principles of fairness were not undermined:

“In considering the issue of automated decision-making, this office acknowledges the efficiencies and benefits that the use of automated systems can offer in the realm of administrative decision-making. However, when using automated systems to assist with administrative decision-making, it is essential that the use of those systems accords with administrative law principles.”

The automation of processes involving discretion — such as whether specific circumstances might exempt someone from income management — is especially important to get right, notes the Ombudsman’s 2007 Automated Assistance in Administrative Decision-Making Better Practice Guide:

“Agencies considering automated systems for administrative decision-making must pay particular attention to decision-making paths involving the exercise of judgement or discretion …

“An automated system must be designed in a way that accurately reflects the government policy it models, and agencies should be careful that the system does not fetter the decision-maker in exercising any discretion he or she has been given (under relevant legislation, policy or procedure.”

The Department of Social Services and DHS have “responded positively to around half of our office’s recommendations, and have taken steps towards improving some processes and policies”, says the Ombudsman — including that it should change the process under which Mr G’s income management eligibility was rolled over for an extra year, despite being ineligible.

DHS objected, however, to the recommendation that it explain reasons for decisions in letters to customers, saying that it was reluctant to include sensitive or complex information in letters, but also that its systems limit the amount of detail that can be included in decision letters to customers.

The Ombudsman noted in response that “we do not accept that these are appropriate reasons for not providing people with complete and adequate reasons for decisions”.

This is the third report into income management from the Ombudsman since 2010.

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