Government says new laws will simplify process but welfare groups are concerned roll out will echo robodebt scandal

This article is more than 6 months old

This article is more than 6 months old

Welfare recipients were forced to correct the employment income they reported to Centrelink 15m times in one year, the government has revealed, as it makes the case for new laws to simplify the process.

The Coalition has announced it hopes by July to introduce new reporting requirements for about 1.2 million welfare recipients who inform Services Australia, formerly Centrelink, of their earnings so the agency can calculate their fortnightly payments.

Coalition says it has no duty of care for welfare recipients over robodebt Read more

Legal and welfare groups and the public sector union offered support for the plan in their submissions to a Senate inquiry into the legislation, although they warned that there was concern the policy may not be implemented smoothly, citing the robodebt scandal that also involved an attempt to bolster the budget bottom line.

“There is widespread mistrust in government and its use of data matching in the administration of social security following robodebt,” the Australian Council of Social Service said in a submission.

The government has insisted that the $2.1bn over four years of expected savings would not come from debts being raised but instead be gained by accurately paying recipients what they are entitled to.

Currently welfare recipients are told to report their work income over a fortnight by calculating what they earned as a result of the number of hours worked. Under the new arrangements, people would be able to report their income to Centrelink after receiving their payslip, avoiding the need to estimate their earnings.

Shane Bennett, an acting deputy secretary at the Department of Social Services, conceded that the current system was “onerous”, saying it effectively required people to keep a diary of their shifts and “the different rates that they have worked those shifts at”.

More than 600,000 debts have been issued under the government’s botched debt recovery scheme – known as robodebt – alleging that welfare recipients were overpaid because they misreported their work income.

While many of these debts are now under a legal cloud, even critics of the scheme acknowledge that some welfare recipients will have misreported their income and therefore received excess payments.

The government’s submission offers a potential insight into why this may be, revealing that in 2017 there were around 15m corrections to recently reported earnings.

These were cases “where people discovered when they got their pay that they had incorrectly reported their earned income for the previous fortnight”.

Under the new system, Centrelink will also pre-fill income reporting forms of about 95% of all welfare recipients’ using tax office data provided via the Single Touch Payroll scheme. People will be asked to confirm the information, similar to what occurs with tax returns.

But the Greens senator, Rachel Siewert, warned that recipients could be tripped up in cases where the pre-filled information was different to the income listed on their own payslip.

Coalition warned robodebt scheme was unenforceable three years before it acted Read more

“If it were me, I’d go, ‘Uh-oh! What do I do here?’ If that form looks wrong compared to my pay slip, I don’t want to lie and just say ‘yes’ to the form even though my pay slip says something different,” she said.

“That is, for me, an area of automatic ‘hit the panic button’.”

Bennett said the department was still working through the details of such scenarios, but stressed that people would be able to contact Services Australia with any concerns.

Leanne Ho, the National Social Security Rights Network executive officer, argued that the government should consider the pre-filled data as the correct information in law, rather than what is reported by a welfare recipient.

“It would avoid debt because it wouldn’t be up to vulnerable people to work out, through a complicated system, what their income being reported should be,” she said.

The Senate inquiry will report on Friday.