The Commonwealth Ombudsman Michael Manthorpe has agreed to investigate Centrelink’s debt recovery program for a second time.
The agency’s use of automated systems to speed up the process of raising debts and collecting on them is still generating unfair outcomes, according to the independent Member for Denison, Andrew Wilkie.
“I have been approached by a whistleblower who I believe has good knowledge of the current internal process on how these debts are verified and raised,” Wilkie wrote to Manthorpe in late May.
Multiple database entries for the same employees and employers are leading to “duplicate or triplicate debts” being raised, according to Wilkie, who says this can only be fixed manually and the necessary checks are only done occasionally.
“As Centrelink often requests payslips for a five year period, people often have many employers and so such errors are common,” he pointed out in his letter to Manthorpe.
The department has previously denied Wilkie’s claims on May 31 in response to a Tasmanian newspaper article:
“To avoid discrepancies with employer names, the online system has an ABN lookup feature where users can select the employer’s ABN if the name is unfamiliar. Where employer ABN matching is unsuccessful, the system tries data-matching. In the absence of a response from the customer, the system defers to employer names provided by the ATO. This is the same process we use when manually calculating whether or not a person has a debt.”
Wilkie also alleges the agency systematically fails to take into account the difference between net income reported via bank statements and the gross pay shown on payslips.
This, the Tasmanian MP claims, leads to higher or lower debts depending on which type of evidence a person submits, after receiving a letter asking them to either pay back funds or provide further information.
Wilkie’s whistleblower reportedly told him it was “standard procedure” to ignore the missing income tax that isn’t shown on bank statements, when the person’s total income is below the $18,000 tax-free threshold. Bizarrely, that would mean Centrelink ignores the tax that doesn’t appear on bank statements specifically in cases where that tax would have later been refunded in full.
In the May 31 statement, DHS said:
“It is misleading to say that people providing payslips will receive a higher debt amount. Where a customer provides payslips, the department calculates their earnings based on their gross income. If a customer is unable to provide payslips and instead provides bank statements, the net pay shown on the statement is converted to a gross amount for their earnings calculation. This ensures customers are not disadvantaged.”
Finally, Wilkie provides a letter received by one of his constituents informing them of a debt of over $15,000 with one month to pay. The letter includes “an astonishingly small amount of information … for such a large debt” in the MP’s opinion.
“How can a person identify issues or errors with the debt, such as those listed above, with such little information?” he asks. “Surely it is essential that a government agency provide full disclosure of the details for such a debt.”
In following up these complaints, the ombudsman is likely to look back on whether the Department of Human Services implemented the recommendations it happily agreed to after the April 2017 report on robodebt from his office. Then-secretary Kathryn Campbell claimed “in most cases” it had already begun doing so when the report landed (a claim that pops up surprisingly often in response to critical reviews, inquiries and investigations).
That report essentially refuted the claims that automating aspects of the system for raising potential debts had made it fundamentally flawed, and accepted the overall hit-and-miss rate probably wasn’t any worse than before.
Still, the ombudsman’s last report was not impressive reading for the federal government’s main service delivery arm. It found “poor service delivery was a recurring theme in many complaints” and describes a system that is often unfair, confusing and unreasonably punitive.
While the script is similar this time around, most of the major roles have been recast.
The last report came shortly before Manthorpe took over from his predecessor Colin Neave and prior to the public service switcheroo in which the heads of most federal departments were swapped around. Now Campbell is head of DSS, which is only peripherally involved, while former Employment secretary Renee Leon is in the hot seat at Human Services.
A DHS spokesperson gave The Mandarin its glass-half-full view of last year’s report by email in response to this article and was keen to point out that Manthorpe’s new investigation was not as extensive.
“Last year the Commonwealth Ombudsman confirmed that:
- it was reasonable and appropriate for the department to ask people to explain data matching discrepancies.
- the online system accurately calculates debts when the required information is entered;
- the business rules in the online compliance system that support the debt calculation are comprehensive and accurately capture the legislative and policy requirements; and
- debts raised are consistent with the previous manual debt investigation process.
“In relation to a complaint from Mr Wilkie, the Ombudsman has sought information from the department about the online compliance system and debt recovery. This is not a review of the system itself and is in relation to a specific complaint.”