Protesters livid over the controversial robo-debt recovery scheme demonstrated outside the Human Services Minister's office on January 18. The Huffington Post reported seven protesters sat outside the office of Minister Alan Tudge, the Liberal MP who doubled down on the system despite widespread reports of failure, and threatened to jail defrauders. The protesters brought with them a 35-minute long custom-created Centrelink holding message, available here, to play outside Tudgeâs office. The group also served Tudgeâs office with a fake debt notice amounting to $300 million, which is how much the minister said was clawed back from welfare recipients since the program was implemented. The video shows them playing the hold music outside Tudge's office. Credit: Twitter/Asher Wolf via Storyful

A former government review tribunal member for Centrelink’s “robo-debt” scheme has compared the debt-recovery system to the “Mafia” and said the methods for gathering funds were like “extortion”.

Terry Carney, who served as a panel member on the Administrative Appeals Tribunal for 39 years, heard some of the first automated debt recovery cases pursued by Centrelink.

After almost 40 years in his job, he quit in 2017 and became a vocal critic of the scheme.

Mr Carney slammed the behaviour of the Department of Human Services — the body responsible for Centrelink — calling it “abysmal” and “unlawful” last night on ABC’s 7.30.

The robo-debt scheme gathers records, including Australian Taxation Office files, from former and current Centrelink users and compares them with Centrelink reporting files, seeking instances of possible overpayment.

Where the department detects discrepancies, people are sent letters asking them to provide documentation detailing their income and other eligibility information. Sometimes the information requested dates back many years.

“The (Human Services) department’s conduct is abysmal,” Mr Carney told 7.30.

“It’s the conduct that you would expect (from) a tin-pot, third-world country.

“At no stage does Centrelink ever seek to defend the unlawful basis on which it’s raising those debts.

“(It’s) a bit like the Mafia saying, you know: ‘You owe me money. Do I have to prove that you owe me money? No I don’t’.

“That … is what we usually say is extortion.”

Between November 2016 and March 2017, 20,000 letters per week were sent to people advising them of possible overpayments and asking them to check or provide income and employment details and other eligibility information. Some of those asked for information in 2016 required documents dating back to 2010.

In instances where people weren’t able to provide these details, they were sent another letter, telling them they owed a debt.

Devi Barker told 7.30 debt collectors told her she owed a massive $7616.05.

“They were demanding that I make payment. I felt quite stressed, especially when they said that my wages would be deducted and that I wouldn’t be able to leave the country,” Ms Barker said.

Her debts dated back to around 2010 and 2012 — a period Centrelink no longer pursues after the system underwent a review.

Ms Barker attempted to provide details to the department by contacting her bank but was told they didn’t hold records for longer than seven years.

She said she was confident she provided Centrelink with the correct information while receiving welfare, but she was made to feel “like a criminal” after robo-debt claims were launched against her.

Victorian Legal Aid successfully launched a case against the raising of debts against one of their clients earlier this year and has recently launched another case.

The Department of Human Services has defended its right to pursue debts owed to Centrelink.

“The Commonwealth Ombudsman has independently and exhaustively reviewed the earned income compliance program,” Department of Human Services General Manager Hank Jongen said in a statement.

“After reviewing the processes around the department’s debt recovery, the Ombudsman found it is reasonable and appropriate to ask people to explain discrepancies in data matching with other agencies,” Mr Jongen said.

“The Ombudsman’s 2019 report shows we have significantly improved the way we communicate with people to ensure they better understand the way debts are calculated and have greater access to support if they wish to have a debt reviewed.

“The report shows complaints have reduced considerably since 2017 because of the work that has been done to enhance our processes.

“There has also been a decrease in the number of debts that are later reduced.

“Letters are sent to customers asking them to explain discrepancies. These are not debt letters.

“No debt notice is issued until the person has been afforded ample opportunity to assist with explaining and resolving the discrepancy.

“Debt recovery is a fundamental principle of our welfare system – when someone has a debt, the department is legally obliged to pursue recovery of the overpayment.”