Woman who received debt notice before Christmas told system assumed she was working more than one job

A low-income single mother says Centrelink wrongly issued her a $24,000 welfare debt just before Christmas, the latest in a series of complaints about the agency’s new automated compliance system.

On Tuesday Labor’s human services spokeswoman, Linda Burney, wrote to the government asking for a suspension of Centrelink’s new automated compliance system, saying it must stop accusing people of serious wrongdoing and charging recovery fees until it could be certain the system was targeting the right people.

Last week, a Centrelink compliance officer blew the whistle on widespread faults with the new compliance system, saying it was error-prone and grossly unfair to welfare recipients.

Guardian Australia has continued to receive complaints about the system, which works by automatically detecting discrepancies between income reported to Centrelink and information held by the Australian taxation office and other agencies.

Ombudsman asked to investigate if Centrelink wrongly pursuing welfare debts Read more

One woman, a single mother on a partial parenting payment, received notice of a $24,215 debt two weeks before Christmas, according to Centrelink correspondence.

“It’s just really upsetting and confronting because, I was thinking, the rate that I paid back Centrelink debt in the past would be about $50 a pay cycle,” she said. “More than that at a time I just simply couldn’t afford it. So I thought, ‘Is it going to be for the next 10 years that I’m going to be paying this back? How am I ever going to be able to get ahead?’.”

She said she called Centrelink to query the debt. They told her she had recorded the name of her employer in two different ways when reporting fortnightly income. The automated system had assumed she was working more than one job, she said, and deemed her ineligible for the partial parenting payment.

“It was recorded by the automated system that instead of having this one employer with occasional work, it recorded me as having additional employers and possible income that I was not declaring,” she said.



Despite lodging a dispute, the woman has been told she must begin paying the debt back, at a rate of $60 a week, while she gathers her payslips for the past two years to use as evidence.

“They want to get money back from us low-income Australians instead of the Murdochs,” she said. “A lot of people who won’t have the means to question it and are just going to go and pay, or freak out and get very stressed.”

A Melbourne man, Ryan, who asked for his surname not to be used, was issued a debt of $4,720 for youth allowance he had claimed six years ago, after the automated system picked up a discrepancy between his reports to Centrelink and information held by the tax office.

He subsequently realised he had been reporting his income to Centrelink under his employer’s trading name, while the tax office’s records used the business name. Ryan said the automated system had assumed he was receiving an income from a second employer, which he had not declared at the time.

Centrelink officer says only a fraction of debts in welfare crackdown are genuine Read more

He told Centrelink the reason for the discrepancy, was reassessed and subsequently had his debt reduced to $1,243. Documents seen by the Guardian confirm this version of events.

Puzzled by the remaining debt, Ryan again contacted Centrelink.



He was told he had not recorded any income between November 2010 and early February 2011, and the system had simply averaged out his annual income across those months to assume he was working, making him ineligible for benefits.

Ryan was overseas at the time and could not have been working.

He has made a formal complaint and is now going through another reassessment process. He estimates he has made between seven and 10 phone calls to Centrelink, which took seven to eight hours in total.

“To date I have found navigating this entire process difficult, and can only think what nightmare stories are happening to other welfare recipients with disabilities, mental health issues or the elderly,” he said. “This system needs to be fixed as a matter of priority, as the costs that must be accumulating as a result of incorrect data matches must be enormous.”

Burney’s letter to Alan Tudge, the minister for human services, asked what steps had been taken to ensure “honest people” were not being accused of wrongdoing unnecessarily.

“I would ask that action currently under way and timeframes for the alleged debt’s repayment be paused while the department provides clarification and certainty to the community,” Burney wrote in the letter, seen by Guardian Australia.



“If the department intends to accuse people of serious wrongdoing and charge them recovery fees, it must be certain about its data matching process.”