Matters of Interest

Centrelink Debt Recovery System

The Hon. T.T. NGO (15:26): Members, close your eyes and imagine that you are on a very low income, living week to week. How would you feel if you received a debt recovery notice for a substantial debt that you do not owe? Outrage! That is just what has happened to thousands of Australians, including South Australians. Despite public outcry over this broken system, including the social media #notmydebt campaign, the federal government has refused to suspend its automated system and has expanded its focus from Youth Allowance and Austudy recipients to pensioners, families and the disabled.

A fundamental flaw of the system, amongst others, is that, where there is a discrepancy between reported fortnightly earnings to Centrelink and the fortnightly average gross annual income, it automatically issues a discrepancy notice. Clearly, this formula is problematic. What about casual workers or those who receive Centrelink for a couple of months whilst in between jobs? It ignores Centrelink's purpose to help those who need it most, when they need it most. How much a person receives depends on the amount they earn within a particular fortnight, not a fortnightly average from annual earnings.

Previously, I have spoken about the importance of Centrelink and that I received it in the past. When I was a casual worker in the construction industry my hours varied considerably. In fortnights that I worked a lot, I rightfully did not receive any payments from Centrelink, but in the fortnights that I did not get much work I received a payment, which helped me get by. Under the current system I most likely would have received a discrepancy notice, even though I correctly reported my income.

Human services minister, Alan Tudge, has defended the system, stating that it is almost the same as before, minus human supervision before discrepancy notices are issued. The minister does not seem to care that human supervision meant that not all discrepancies flagged by data matching resulted in discrepancy notices. People can check dates and similar company names, mitigating the faulty algorithm. The current system casts a wide net, putting the onus on the individual to prove they did not receive any overpayments.

After immense public pressure, the minister has made some administrative tweaks to the system, including crosschecking addresses against the electoral roll, sending discrepancy letters by registered post and providing a hotline number on letters and not just a reference to the myGov website, which I understand only seeks to confirm annual income. If a person confirms their annual income, a fortnightly average is calculated and the customer receives a debt notice.

I am not criticising Centrelink staff whose union, the CPSU, has made it clear that staff want to help their customers, but received instructions not to correct errors unless the customer identifies and proves the error. This is especially difficult, as employees are also under instruction not to consider evidence that the customer has already provided. A flawed system that causes such anguish is not okay. It is not okay that those with a genuine reason for a flagged discrepancy are having such difficulty explaining it. Reports state that some discrepancy notices are for the 2010-11 financial year. Centrelink's website previously advised recipients to keep payslips for at least six months; now it simply advises to keep all payslips.

Even worse, you cannot get through to Centrelink on the phone. Senate estimates heard that up until October last year, 29 million calls received an engaged signal. Sheer frustration causes customers to visit their local Centrelink, leading to long queues. Continuing Centrelink's automated debt recovery system, whilst under review by the Commonwealth Ombudsman and the Senate, is not good enough. The federal government needs to suspend the automated system and fix it.