Independent Andrew Wilkie requests investigation into system used to identify overpayments and issue debt notices

This article is more than 3 years old

This article is more than 3 years old

The commonwealth ombudsman has been asked to investigate allegations that Centrelink is wrongly pursuing low-income Australians over welfare debts.

Complaints have continued to emerge this week about Centrelink’s new automated compliance system, which is being used to chase debts from welfare recipients at a vastly increased rate.

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The system relies on an automated data-matching process comparing income reported to Centrelink against information held by government agencies, including the Australian taxation office.

Independent Andrew Wilkie first raised concerns about the system two weeks ago, saying it was wrongly slugging welfare recipients with debt notices of thousands of dollars.



Wilkie said his office had since been inundated with complaints from vulnerable families.

He has now written to the commonwealth ombudsman requesting an investigation, and to the human services minister, Alan Tudge, urging him to intervene.

“People are terrified about how they will put food on the table or provide Christmas for their kids,” Wilkie said. “My office has spoken to people who are distraught because they have received a threatening letter warning of an enormous debt. Several people have even gone so far as to speak of suicide.”

The system, in use since July last year, is designed to more easily allow Centrelink to identify millions of dollars in overpayments, and has seen the number of compliance interventions rise from 20,000 a year to 20,000 a week.

Guardian Australia has received a series of complaints about the system since first reporting on the issue two weeks ago, as have the ABC and the offices of Wilkie and the Labor senator Doug Cameron.

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Most complaints revolve around Centrelink’s reliance on annual pay information, held by the tax office, to assume an individual has worked for the entire year and is therefore not entitled to benefits.

Centrelink then sends compliance letters asking individuals to prove they were entitled to welfare, requiring them to find payslips and employment information from as far back as 2010.

One man who asked not to be named told Guardian Australia he first found out about the supposed debt when he was contacted by a debt collector, the Probe Group.

The debt was from 2011, when he was on youth allowance. Centrelink had used ATO information to wrongly conclude he had worked the entire year. He is now being forced to track down companies he worked for five years ago, as an undergraduate student, to obtain proof he was entitled to benefits.

“It’s a scatter gun approach tarring cheats and honest people with the same brush to try and shake down as much money as they can,” he said.

“However, the call centre staff have been good and to a large extent they understand that this ‘process’ is ridiculous and unfair.”

The opposition has also called on Tudge to intervene.

Cameron described the new system as a “dragnet approach”, and said the federal government must guarantee it is not wrongly issuing debt notices.



“Honest, law-abiding Australians don’t deserve to be sent incorrect debt notices by the Turnbull government, especially at Christmas,” he said.

The problem has been compounded by errors with Centrelink’s online portal, which have prevented some welfare recipients from lodging a dispute within the 21-day timeframe.