Tuesday, 3 January 2017

Singing the Centrelink Blues - with lyrics straight from Looney Tunes

After more three years of an Abbott-Turnbull federal government there appears to be only a handful of ministerial portfolios which can be thought of as well managed and the Dept. of Human Services (operating Centrelink) is not amongst them......


Financial Review, 31 July 2016:

The Turnbull government will this week release a request for tender for one of the most significant spends on the machinery of government in years: the job of integrating the massive welfare and Australian Tax Office IT systems, as part of a $1 billion overhaul of ageing infrastructure.
The upgrading of the government's IT systems might not normally attract much wide interest, except that the question of who would run another massive payments system – for Medicare – became such a matter of political controversy in the recent federal election campaign.
But the welfare upgrade also holds the key to clearing the way for other major welfare reforms – from implementing the McClure Report recommendations to simplify the welfare system through to data matching that will produce big administration and compliance costs for both the government and its customers.

Australian Department of Human Services:

20 December 2016
If you do, we can ask you to pay off your Centrelink debts at any time.

If you don’t have a payment arrangement set up, from 1 January 2017 you could be charged interest and stopped from travelling overseas.

To pay back the money, use Money You Owe service in your Centrelink online account through myGov, or talk to us about setting up a payment arrangement.

If you set up a payment arrangement and make your repayments, you won’t be charged interest or stopped from travelling overseas.

To help you pay off your debt faster, we will ask the Australian Taxation Office to send us your tax refund to pay your debt. This will happen even if you have a payment arrangement in place.

To avoid a debt, tell us straight away if your circumstances change, or if you think you’ve been overpaid.

Next steps
Read more:
about how your payments could be affected when you owe us money

Guide to Social Security Law Version 1.227 - Released 7 November 2016: Ten per cent Recovery Fee on Debts from False or Non-declaration of Income from Personal Exertion
A 10% recovery fee will be imposed on a debt incurred when a person has:
refused or failed, without reasonable excuse, to provide information, or
knowingly or recklessly provided false information,
when required under a provision of the social security law, to provide information in relation to the person's income from personal exertion.
The 10% debt recovery applies only to persons of working age on a social security benefit, DSPWPWidB or PPS at the time the debt occurred.
The fee is only applicable to that part of the debt that arose because the person refused or failed to provide information, or knowingly or recklessly provided false or misleading information about their income from personal exertion.
Act reference: SSAct section 23(1)-'social security payment'
Factors to consider
The decision to impose a 10% recovery fee is separate from the decision to raise a debt, and must be considered discretely. However, the decision to apply the recovery fee must be made at the same time the debt is raised and cannot be applied retrospectively……
Income from personal exertion includes any income received as an employee or for any services rendered. This includes income from earnings, salaries, wages, commissions, fees, bonuses, superannuation allowances, retiring allowances and retiring gratuities, allowances and gratuities.
It also includes proceeds of any business activity carried on by the person either alone or as a partner with any other person or profit received from holding an office or from any profit making undertaking or scheme.

The Guardian, 19 December 2016:

The data-matching system Centrelink is using to detect overpayments has also been experiencing problems, according to some welfare recipients. The new system compares data held by Centrelink with data from other government agencies, including the tax office, to determine whether a person has wrongly claimed welfare.

Last week, independent Andrew Wilkie called on the government to suspend the automated compliance system while reports of errors were investigated. Other welfare recipients have since spoken to Guardian Australia about claims for debts they say have been incorrectly issued.

One man, who asked not to be named, was told he owed $2,200 because the ATO’s information did not match the income he had reported to Centrelink. He said he claimed benefits for only part of the year, and believed the ATO’s information on his annual income had been mistakenly used to suggest he worked the entire year.

“I believe no government department could be so incompetent to not recognise the glaring problems with matching data that is on completely different scales (yearly vs fortnightly),” he said. “To me this means it has been purposely done.”

The department said last week it believed the automated system was working without error. It said there had been no increase in the rate of appeals received.

The Guardian, 23 December 2016:

A Centrelink compliance officer has broken ranks to describe the government’s crackdown on welfare debts as grossly unfair, saying its new automated compliance system is flawed and overly harsh on those on sickness benefits.

The government continues to insist there are no flaws with its compliance system, which is being used to retrieve debts from hundreds of thousands of Australia’slowest paid and most vulnerable.

The system relies on an automated data-matching process to detect discrepanciesbetween fortnightly income reported to Centrelink and annual pay information held by the tax office, a comparison that has been criticised as too crude.

Once a discrepancy is detected – currently occurring at a rate of about 20,000 cases a week, compared with 20,000 a year previously – welfare recipients must prove they were entitled to the welfare benefit, or pay the debt.

The Centrelink compliance officer, who asked for anonymity, told Guardian Australia the system was error-prone but that most customers were paying debts without checking them first. The source said of the hundreds of cases they had reviewed, only about 20 (at a “generous estimate”) turned out to be genuine debts.

The worker said the system was particularly harsh on those who received Centrelink’s sickness allowance – a benefit for employees who are unable to work temporarily due to serious illness but are not paid by their employer.

“The ATO matched data will show that they worked the entire financial year and will apportion the gross payments over that financial year without taking into account their time off,” the source said. “This means the system raises a debt for the entire sickness allowance they received. For many, that’s a debt of over $1,000.

“Although we may have documented evidence of their medical issues on the system, we as [compliance officers] are not allowed to look in the system to find any of that evidence. Instead customers must obtain all their pay information for that financial year.”

When a discrepancy between Centrelink and ATO data is detected, some individuals are being asked to track down pay slips that may be several years oldor obtain letters from their employers. That is particularly difficult where past employers have gone into liquidation or no longer exist.

The Centrelink source said their team was instructed to tell those people to contact the consumer affairs watchdog in their state or territory, which could then help them track down the necessary information. Colleagues had recently learned that those state and territory agencies did not hold such information.

“[We] were told to keep telling customers this false information until another way is found,” the source said.

The Department of Human Services said in a brief statement that it remained “confident in the online compliance system and associated checking process with customers”.

The department said more than 70% of those who had received a compliance letter since September had resolved the matter online and only 2.2% were requested to supply supporting documentation such as payslips.

Frustrations with the debt recovery process have been compounded by errors with Centrelink’s online customer portal, where individuals must go to lodge a dispute. The department said the errors with its online service had affected only a small number of people and had since been resolved.

But the compliance officer said that was untrue. They said they were “stunned” when the department stated the online system was working.

“This is completely false,” the source said. “Not only do customers, especially past customers, have access issues all the time but, since the compliance system was placed online, [compliance officers] have had many access issues.

“For the past two weeks we’ve had to turn customers away because we could not access [the system] and neither could they.”

Guardian Australia and other media, including the ABC and Crikey, continue to receive reports of incorrectly issued debts, which are causing stress and anxiety just before Christmas. 

This week the independent MP Andrew Wilkie asked the commonwealth ombudsman to investigate complaints about the automated system.

The Australian Council of Social Service (Acoss) wrote to the human services minister, Alan Tudge, on Thursday, urging him to investigate complaints about the system.
The Guardian, 30 December 2016:

The government’s automated compliance system, which began in July, has been the subject of repeated complaints, which stem from its comparison of income reported to Centrelink and information held by the Australian Taxation Office.

It has been accompanied by threats of jail for those who do not pay, a joint police-Centrelink campaign targeting geographic areas, the imposition of a 10% debt recovery fee and plans to charge interest on welfare debts and remove the six-year statutory limit on retrieving overpayments.

Legal Aid Victoria, the Australian privacy foundation, the Australian council for social service, and independent Andrew Wilkie have all raised serious concerns, urging the human services minister, Alan Tudge, to intervene. 

IT and data expert Justin Warren – who has worked for IBM, ANZ, Australia Post and Telstra, among others – said Centrelink’s system appeared to rest on the “idiotic” assumption that “big data was magic”.

“It’s not. It’s a messy, complex, statistical system that is wrong a lot,” Warren said. “All models are wrong, but some are useful. It’s the choice of how you deal with when the system is wrong that reveals how you view the world.”

The Guardian, 30 December 2016:

This week, Guardian Australia has continued to receive complaints about Centrelink’s new method of retrieving welfare debts, which relies on an automated data matching process criticised as crude and unfair.

Now, a handful of the thousands of Australians caught up in the government’s crackdown share their experience of being unfairly targeted.

Sally, Brisbane
I am the single mum of five and three year olds. I work part time and receive partial parenting payment and family tax benefits. This finances our simple lifestyle. I was shocked and dismayed to receive a letter from Centrelink Compliance department with a debt of $24,215.81 (including $2,110 debt recovery fee) to be paid by 9 January. I was able to talk with Centrelink Compliance and it appears the automated system “duplicated” my employer, so it appears I had a second undeclared job. Although this is Centrelink’s error, I need to provide two years of payslips and apply for a “manual reassessment” of my case. To stave off debt collectors, I had to start repaying my “debt” at a reduced rate.

Ryan, Melbourne
As a long-term full-time employed professional, tax payer and small business entrepreneur, I contribute to our economy in many positive and financial ways.
Centrelink have incorrectly alleged they overpaid me the government benefit Youth Allowance which financially assisted me to successfully complete a professional tertiary qualification in 2010-2011. This qualification is now used daily in my profession. This issue has been raised six years in retrospect, which appears now due to an erroneous automated computer “data match”.
Centrelink have repeatedly refused to provide written evidence of how the overpayment occurred. In addition to this, they have falsified my fortnightly income statement since I reported it in the 2010-2011 financial year. They have also requested I supply documented financial records I am not obliged to keep under ATO law. Centrelink has been grossly wasteful of my time and that of tax-funded government employed staff. My time is valuable and productive, both within full-time employment and small business development.
Throughout this ordeal, I’ve been subjected to personal distress, confusion and dismay and at a time of family grieving, my 66-year-old father passing away concurrently with receiving presumptive Centrelink letters of debt. The current data match regime appears to have a clear objective and obvious demographic: disrupt the disadvantaged, defenceless and vulnerable.
I now feel nothing more than inspired to stand up, fight for change and the protection of our basic civil liberties. We may feel small as individuals, but collectively we can stand tall and safeguard those around us, who deserve respect, dignity, equality and compassion in our free and democratic society.

James, Wollongong
A debt collector rang me on a Saturday morning and it ruined my weekend. I thought I was being scammed: they were asking for my personal details and demanding I identify myself. I had to wait until Monday to get an answer out of Centrelink, which was: I owed them $1,000 because their automated tax matching said so.
They wanted letters and payslips from employers proving I wasn’t a liar. When I did get the information, there has been no way to provide the Department of Human Services with it even after four weeks of trying. I feel as though I’ll have no choice but to pay when leaving for an overseas trip – extorted for the money I “owe” at the customs desk or miss my flight.

Dave, Sydney
I reported correctly while on youth allowance but was sent a letter from Centrelink demanding payment of a $2,500 “debt” based on alleged under reporting. The demand caused me stress and anxiety. I spent at least five hours contacting Centrelink and gathering my payslips to prove that I did not under report and that I did not owe a debt.
After phone calls and emails to and from Centrelink and a journalist from the ABC, Centrelink acknowledged that I did not owe any debt. There was no apology for the false accusation or the stress caused. I am concerned that most people would simply pay the “debt” on the assumption that Centrelink had a valid basis to their demand.

Click on image to enlarge




Following a pilot in 1994, the Department of Social Security received funding in the 1995–96 Budget for a Flexible Debt Recovery measure, which would: 'refer certain social security debts owed by noncurrent customers to mercantile agents for recovery action'.  ECAs, acting as mercantile agents, have been contracted since 1996 to recover social security payment debts owing by noncurrent customers. The ECAs are paid a commission on the amount recovered for each debt.
DHS currently contracts two private sector ECAs to undertake debt recovery for Centrelink payment debts: Dun & Bradstreet and Recoveries Corporation. The current arrangement is a standing offer for debt recovery services from both suppliers for the period February 2011–February 2014.

Two external debt collection agencies received over $13 million in commissions for recovering Centrelink debts last financial year. The debt recovery bonanza follows a previous Audit office investigation which found private debt collection agencies recovered 10 per cent of Centrelink debts, but were the subject of more than a quarter of all complaints about debt recovery practices…..

[National Welfare Rights Network, Welfare Rights Review Vol 1 No 2]


Now the Minister for Human Services and Liberal MP for Aston Alan Tudge would like to deliver all Centrelink services online in the future via software programs – including acceptance or denial of applications for pensions, benefits and allowances – without any human contact between the person applying and Centrelink. 
Probably with user access only allowed via a registered national digital identity

What could possibly go wrong?


Hon. Alan Trudge MP, Minister for Human Services, can be contacted at https://www.aph.gov.au/Senators_and_Members/Contact_Senator_or_Member?MPID=M2Y

Hank Jongen, Department of Human Services General Manager, can be contacted at hank@humanservices.gov.au

* A hat tip to those mainstream journalists, social media activists, statisticians and IT people who have been covering this issue, a shout out to the whistleblowers and a big thank you to those Centrelink clients who have been telling their stories online.


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