Centrelink is for the first time trialling a version of its automated debt recovery system on the nation’s most vulnerable welfare recipients, bypassing previous safeguards designed to protect those with severe mental illness, intellectual impairment or drug addiction.

Welfare recipients whose files are marked with a “vulnerability indicator” have so far been exempt from Centrelink’s controversial methods of clawing back overpayments, which have received widespread criticism for their inaccuracy and unfairness since a raft of changes introduced in mid-2016.

But several weeks ago, Centrelink began sending letters to a “small number” of people marked as vulnerable in its systems.

Vulnerability indicators are used for individuals with a serious mental health issue or intellectual or cognitive impairment, or those requiring regular treatment for an illness, experiencing homelessness, a recent release from prison, drug addiction, or fleeing family violence. The government is now only ruling out using the system against recent family violence victims.

The process will be markedly different from that used against other welfare recipients, and vulnerable individuals will be given more support and more time to track down years-old information about their income.

But the onus will still be on the individual, rather than the government, to prove a debt to Centrelink is not owed.

A spokesman for the human services minister, Michael Keenan, said the trial was currently suspended while the government assessed its initial outcomes.

“This trial is on hold while a review is conducted to determine whether the additional safeguards and supports implemented have been effective,” he said.

The plan has infuriated the Australian Council of Social Service. Its chief executive, Cassandra Goldie, has written to the human services minister, Michael Keenan, describing the plan as “deeply irresponsible”.

Goldie says people with a serious mental illness, cognitive impairment or addiction would struggle to even comprehend what was happening to them, let alone go through the arduous task of proving their income from up to seven years ago.

“People will experience serious anxiety, depression and a sense of hopelessness, which we know already occurs under robodebt,” Goldie told Keenan.

“The difference here is that government is imposing this harmful program on people who have a history of poor mental health. It is deeply irresponsible to extend a program that has caused damage to people’s wellbeing to people with poor mental health.”

Seeking to recover debts from those who have experienced homelessness, Goldie said, would not only worsen their situation, but was simply impractical.

“There are also practical issues in that many may not have retain documents like payslips or bank statements that would verify their income because they did not have a home,” she said.

She said those in remote locations lacked access to Centrelink offices, internet and phone reception, making the task far more arduous.

The government says it is obliged to recover overpayments and will employ added safeguards to help vulnerable people deal with the debt assessment process.

Centrelink staff will use phone calls to discuss potential debts with vulnerable individuals, rather than funnelling them onto an online portal.

“We have very carefully considered how to best work with people identified as vulnerable or who live in a remote location, to help them confirm or update their income details,” a Department of Human Services spokeswoman said.

“The department is writing to a small number of people and inviting them to call at a time that best suits them. They do not have to go online to update their details.”

The spokeswoman said individuals were given time to prepare for the phone call, and could bring in a support person “if they wish”.

“During this call, staff help people to review, confirm or update their income details,” she said. “Should this result in a debt, our staff will talk through repayment options based on the person’s circumstances.”

It is unclear whether the controversial method of income averaging will be used against vulnerable people if they fail to respond to Centrelink’s correspondence. The spokeswoman said it had only been used in one case involving a vulnerable person so far, and only with their consent.



“We will make every effort to speak to people before any action is taken to update their details,” she said.

Income averaging is currently used against other welfare recipients who are identified by the system as owing a potential debt, but either ignore or don’t receive Centrelink’s letters. It takes a welfare recipient’s annual income and averages it across Centrelink’s 26 fortnightly reporting periods, often leading to the false assumption that a person worked through the entire year and was ineligible for social security.

Terry Carney, a former member of the administrative appeals tribunal, said earlier this year that the income averaging approach was likely unlawful and breached commonwealth policy. He argued Centrelink must resume its previous practice of obtaining itself all the information required to prove the debt exists.

Carney’s views were strongly rejected by Centrelink.

In her letter to Keenan, Goldie urged the government to scrap the entire system.

“The whole program is so fundamentally flawed, it should immediately cease,” she wrote.

“To extend it to vulnerable people including people who are homeless, have depression, anxiety or live in a remote area with extremely limited access to services is at best high-risk and at worst negligent.”

Earlier this year, it was revealed that one-in-six debts raised against welfare recipients were either wiped completely or changed.

More recent figures show huge numbers of welfare recipients are simply paying debts without asking for a re-assessment or review.