news, local-news, centrelink debt

WHEN a Bendigo aged care facility decided to change its name, a simple re-brand was probably the only thing on the board’s mind. But the decision – inadvertently – set in motion a series of events that left one of its former employees owing $2558 to Centrelink. At least that’s what Rob K and his accountant have since discovered. He was one of the tens of thousands of Australians to receive a Centrelink debt recovery letter in the second half of 2016 as part of an automated nationwide audit. Rob received his letter on October 27 last year. “It looked like it was guilty until proven innocent,” he said. The Bendigo man took it to an accountant, and then another, but neither could explain the discrepancy. He had always declared his income, and had not received government benefits for years. It was only when he scrutinised his debt schedule report did he spot something unusual. “Centrelink thought I was working two jobs,” he said. The only problem, however, was that never happened. One job was the aged care facility and the other job, surprisingly for Rob, was also the aged care facility. The change in name appeared to have created two separate businesses, at least according to Centrelink and the Australian Taxation Office. But both still had the same ABN. The ATO had added $1013 per fortnight income from this mythical second job to his report. Rob never received the money, but apparently he earned it, and apparently it had bumped him up to a new tax bracket. He owed Centrelink $2558. “I spoke with four different people at Centrelink. The first three were rude, but I managed to get someone helpful on the fourth occasion,” Rob said. “I made a dozen calls and was on hold for about 15 minutes each time.” After providing evidence of the mistake, his debt was knocked down to $590. But he now had an accountant’s bill of $1200. “It was very taxing emotionally, to the point where you decide you can put up with $590. You just want it to go away,” Rob said. “The whole system needs to be scrapped and re-started. People are now thinking that enough is enough. “If they had just cross-referenced the ABN, they would see it’s the same company.” Centrelink’s new automated debt recovery system has become a major political talking point across the country in the last month, since a woman claimed she had incorrectly been sent a debt letter asking for $24,000. An increasing number of people have challenged their debt letters, including those in central Victoria. Rob hopes his story encourages others to come forward. In the space of five days, Flora Hill resident Robyn Nielson went from owing Centrelink almost $1200, to being owed money herself. The first letter arrived on November 18. “I thought it was a scam,” Ms Nielson said. The letter detailed a debt of $1194 with a debt recovery fee of $96. It was sent to an address she lived at five years ago. Centrelink could not identify where the debt had come from and, on November 23, sent another letter. This time, the intent was slightly different. It stated there was an “outstanding payment” owing to her. For the last month and a half, Ms Nielson has made repeated calls to Centrelink and still had no answer on either end. She spent almost three hours on the phone last Wednesday, placed on hold six times. Now, she’s seeking a review. “I’ve asked to seek a review about them owing me money, and me owing them money,” she said. “If it goes further, I’ll take it to the ombudsman.” In Newstead, vet nurse Colleen Garsed’s time off work in 2012 due to arthritis in her hand ended up hurting in more ways than one. She received a Centrelink debt recovery letter in September last year stating she owed $2221, plus debt recovery fee. The process in challenging the figure proved to be long, arduous and frustrating. Ms Garsed went to Centrelink in person, then on the phone, and finally online to enter her payslips from four years ago, painstakingly uncovered from an old pay system. Fortunately, Ms Garsed was still working at the same vet practice. But then the Centrelink website then crashed. She mailed her payslips but they got stuck at a post office in Canberra. By this time, she had already passed the due date to start repayments. “I was frustrated and angry and tired of all the stress that I was under,” Ms Garsed said. “The only way to avoid the debt collection agency becoming involved was for me to organise a repayment plan for money to be removed from my bank account, for a debt that I didn’t owe.” And, in the end, Ms Garsed was correct. There had been a mistake. Having taken time off due to her injury in 2012, she had not received an income for a large portion of the year. But due to the way the ATO received the income data, the income was increased and spread over the 12 months. After a long few months, her debt was reduced to $442. Ms Garsed had advice for others. “Whenever dealing with Centrelink you must request that the conversation be documented, noted and ask for a receipt number,” she said. “It’s a system that has obviously failed and it needs to be ceased immediately.” Human Services Minister Alan Tudge believes Centrelink’s automated debt recovery system is working “as it was designed to work”, rejecting calls for it to be scrapped. Twenty per cent of the time, the debts have been cleared. For the other 80 per cent, a debt notice is issued. Mr Tudge released a statement this week backing the system, and said people have the opportunity to challenge their debt notice. “Every letter that is initially sent is based on a discrepancy between an individual's income data held at the Australian Taxation Office with their self-reported income data at Centrelink,” he said. “The first letter simply notes the discrepancy and gives an opportunity for the individual to explain it. “This is not a debt letter.” Mr Tudge said people can request an internal review and appeal to the Administrative Appeals Tribunal if they believe their has been an incorrect evaluation. “The individuals who receive these requests for information have typically received thousands of dollars from Australian taxpayers,” he said. “It is very reasonable to ask them to take a little time to go online and clarify their information if there is a discrepancy between Centrelink and tax office data.” Labor has called for the audit office to investigate the system.

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