Officer says new automated compliance system is flawed and overly punitive to those on sickness benefits

This article is more than 3 years old

This article is more than 3 years old

A Centrelink compliance officer has broken ranks to describe the government’s crackdown on welfare debts as grossly unfair, saying its new automated compliance system is flawed and overly harsh on those on sickness benefits.

The government continues to insist there are no flaws with its compliance system, which is being used to retrieve debts from hundreds of thousands of Australia’s lowest paid and most vulnerable.

The system relies on an automated data-matching process to detect discrepancies between fortnightly income reported to Centrelink and annual pay information held by the tax office, a comparison that has been criticised as too crude.

Once a discrepancy is detected – currently occurring at a rate of about 20,000 cases a week, compared with 20,000 a year previously – welfare recipients must prove they were entitled to the welfare benefit, or pay the debt.

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The Centrelink compliance officer, who asked for anonymity, told Guardian Australia the system was error-prone but that most customers were paying debts without checking them first. The source said of the hundreds of cases they had reviewed, only about 20 (at a “generous estimate”) turned out to be genuine debts.

The worker said the system was particularly harsh on those who received Centrelink’s sickness allowance – a benefit for employees who are unable to work temporarily due to serious illness but are not paid by their employer.

“The ATO matched data will show that they worked the entire financial year and will apportion the gross payments over that financial year without taking into account their time off,” the source said. “This means the system raises a debt for the entire sickness allowance they received. For many, that’s a debt of over $1,000.

“Although we may have documented evidence of their medical issues on the system, we as [compliance officers] are not allowed to look in the system to find any of that evidence. Instead customers must obtain all their pay information for that financial year.”

When a discrepancy between Centrelink and ATO data is detected, some individuals are being asked to track down pay slips that may be several years old or obtain letters from their employers. That is particularly difficult where past employers have gone into liquidation or no longer exist.

The Centrelink source said their team was instructed to tell those people to contact the consumer affairs watchdog in their state or territory, which could then help them track down the necessary information. Colleagues had recently learned that those state and territory agencies did not hold such information.

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“[We] were told to keep telling customers this false information until another way is found,” the source said.

The Department of Human Services said in a brief statement that it remained “confident in the online compliance system and associated checking process with customers”.

The department said more than 70% of those who had received a compliance letter since September had resolved the matter online and only 2.2% were requested to supply supporting documentation such as payslips.

Frustrations with the debt recovery process have been compounded by errors with Centrelink’s online customer portal, where individuals must go to lodge a dispute. The department said the errors with its online service had affected only a small number of people and had since been resolved.

But the compliance officer said that was untrue. They said they were “stunned” when the department stated the online system was working.

“This is completely false,” the source said. “Not only do customers, especially past customers, have access issues all the time but, since the compliance system was placed online, [compliance officers] have had many access issues.

“For the past two weeks we’ve had to turn customers away because we could not access [the system] and neither could they.”

Guardian Australia and other media, including the ABC and Crikey, continue to receive reports of incorrectly issued debts, which are causing stress and anxiety just before Christmas.



This week the independent MP Andrew Wilkie asked the commonwealth ombudsman to investigate complaints about the automated system.

The Australian Council of Social Service (Acoss) wrote to the human services minister, Alan Tudge, on Thursday, urging him to investigate complaints about the system.