News National Government defends controversial Centrelink debt system as complaints continue

Government defends controversial Centrelink debt system as complaints continue

The government has defended Centrelink's new tool to recoup debt from those on welfare. Photo: AAP Photo: AAP
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Social Services Minister Christian Porter says Centrelink’s controversial debt recovery system has been an “overwhelming success” despite continued claims that people are being forced to pay back money they don’t owe.

Mr Porter told reporters on Tuesday the new automated system had sent out 169,000 “polite” letters, which had helped the government raise $300 million since the start of the financial year.

“In 80 per cent of instances the debt is repayable to the Commonwealth, in the final 20 per cent of instances the matter is resolved, generally speaking, by people simply providing information online,” Mr Porter said.

The minister said letter recipients were only required to provide documentary evidence, such as payslips, in 2.2 per cent of cases.

The government’s response comes amid growing criticism from welfare recipients, social service organisations and the opposition over the automated system.

The situation has become so fraught that beleaguered Centrelink staff will soon receive “Advance Customer Aggression Training” from a private contractor, to deal with the public backlash.


Complaints continue

Concerns have been raised about the method used to verify income, which cross references a person’s annual tax return against the pay they have reported fortnightly to Centrelink.

One former welfare recipient told The New Daily he received a letter five days before Christmas saying he “owed $2,105.17 including a $150.30 recovery fee” over payments made between 2011 and 2013.

“They have taken just over $1000 income earned from a single two-week contract and averaged it out to $72 per fortnight over a year,” the man, who did not want to be named, said.

Describing himself as “low-income”, the man has challenged the ruling but was told he would have to pay back $60 a fortnight while his case was being reviewed.

“I find the whole thing depressing, it taps into years of feeling powerless and on the edge of homelessness,” he said.

“While I was receiving benefits I did everything I could to get work. If I hadn’t worked or earned anything at all I wouldn’t be in this position.

“I think a lot of people will just submit and pay off incorrect debts out of fear.”

Social Services Minister Christian Porter has called criticism of the debt recovery system a beat-up. Photo: AAP

Another former welfare recipient, who preferred to be known only as Josh, told The New Daily he was now paying debts he believed he did not owe after Centrelink said it would go to his employer to garnish his wages if he did not agree to a repayment plan.

Josh said he first heard about the debt in August last year when he started receiving calls from a private debt collector, which told him he owed $4800 from the 2011-12 financial year.

Josh, who did not have access to all his payslips from the period, said he was now awaiting the results of a third review of his case.

“It’s one thing to fight them in private, but it’s a scary thought to think that I could lose my job or have my reputation tarnished because I was being accused of something I didn’t do,” he said.

The Department of Human Services’ own operational information, published online, concedes matching reported fortnightly pay with annual income can lead to inaccuracies.

“If employment is for a part of a year only, averaging over 12 months will not result in a correct result if the customer should have received a full rate at other times of the year,” it says.

“If income varied greatly during the year, the result may be incorrect.”

alan tudge
Human Services Minister Alan Tudge says the government wants welfare recipients to get the payments they are entitled to. Photo: AAP

On Tuesday, Mr Porter defended the system, saying the department had only received 276 complaints about the system.

He said the government was on track to raise $4 billion over the next four years.

The minister also claimed people could clarify their income online “in a very seamless and easy way”.

But letter recipients have reported difficulties accessing Centrelink’s online service, with some who have not received welfare for some time finding their accounts have been suspended.

Labor’s human services spokeswoman, Linda Burney, reiterated the opposition’s call to suspend the system on Tuesday.

Ms Burney said the automated system used a “drag-net” approach, which lacked “human oversight”.

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