Centrelink robodebt had 'profoundly negative' impact, inquiry finds

By David Donaldson

June 22, 2017

A Centrelink office in Sydney on Monday, May 28, 2012. (AAP Image/April Fonti) NO ARCHIVING

Centrelink’s ‘robodebt’ system should be suspended until all procedural fairness flaws are addressed, argues a Senate inquiry report released on Wednesday evening.

Human oversight of the automatic detection of overpayment to welfare recipients should also be reinstated, it says.

The inquiry found the unpopular data-matching system, which has incorrectly issued many people with debt notices, was having “a profoundly negative impact on the lives of thousands of Australians”.

The report has, however, been rejected by Social Services Minister Christian Porter as “political” and having “major faults” — and of course, the agency maintains the system has functioned largely as intended all along.

The committee, of which Labor and the Greens form the majority, made 21 recommendations, including that the department update its privacy policy to ensure sensitive personal information is not publicly released “for any reason”, after Minister for Human Services Alan Tudge gave personal information about a welfare recipient to a journalist to dispute claims she had made.

“What the robo-debt process does is shift the onus onto the client to prove their innocence, and that is unusual,” said one witness to the inquiry, Illawarra Legal Centre solicitor Ian Turton.

“Data-matching is not new. The problem with the system as it stands is that, rather than Centrelink making the inquiries when there is perhaps evidence to suggest a person has underreported their income, they turn it over to the client to contact them.”

People on fluctuating incomes have had problems with so-called “averaging” of their income over the year. The committee heard from a number of witnesses and submitters about debt notices being issued based on inaccurate or incomplete information, due to purported debt being calculated by averaging a recipient’s annual income data into a fortnightly sum, which may then give an incorrect picture of the recipient’s eligibility.

Anyone who has had a debt amount determined through the use of income averaging should have it re-assessed immediately by a team of departmental officers with specialist knowledge of the system, the committee argues.

Many clients reported difficulties communicating with Centrelink, and spending hours and hours on the phone or at the computer to demonstrate that the debt notice was incorrect. Some people issued a debt notice cannot use a computer and required significant assistance to engage with the agency. Those who did dispute the agency’s claims often had their debt reduced by thousands of dollars to a small amount or even zero.

Public awareness of these problems has “severely impacted” public trust in the social welfare system, the report notes.

It also caused fear and anxiety, as many recipients could not afford to repay large amounts of money or were afraid a debt would affect their credit rating.

There were also concerns about the automatic application of a 10% debt recovery fee to anyone whose case is referred to a debt collection agency, despite the original intention of the fee to only apply to those who had knowingly provided false information or withheld information. While the setup has been changed now so that the fee is not automatic, the committee recommends the department review all debt cases where it was automatically imposed, and in line with procedural fairness, allow each person a fully-informed opportunity to apply to have the debt recovery fee waived.

Coalition senators on the committee released a dissenting report emphasising that the government was already making improvements to the robodebt system, and rejecting the claim that it lacked procedural fairness.

The Commonwealth Ombudsman has already reviewed the initiative after receiving “many complaints”, and made a range of similar recommendations to improve the system.

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