Centrelink sent out 19,980 incorrect debt notices in just eight months

Australian Parliament, PARLWORK, Question Details:

Question asked of the Minister for Human Services and Liberal MP for Aston Alan Tudge on 31 May 2017:

How many Centrelink clients who were notified of a debt or the likelihood of a debt with Centrelink through its Online Compliance Intervention system, have subsequently had their debt (a) reduced, and (b) cancelled completely.

Could he provide a breakdown of parts (1)(a) and (b) by (a) state and territory, and (b) postcode.

One hundred and three days later the Minister deigned to reply:

THE HON ALAN TUDGE MP - The answer to the honourable member’s question is as follows:

1(a), 1(b) and 2(a) The number of debts reduced to zero and reduced but not to zero in total, by State and Territories as at 31 March 2017:

State	Debt Reduced to Zero1	Debt Reduced but not Zero1, 2
ACT	100	169
NSW	2,234	3,644
NT	40	79
QLD	1,665	2,718
SA	630	1,142
TAS	247	397
VIC	1,894	3,306
WA	646	1,069
Total	7,456	12,524

¹The month the change is reported is the month the reassessment or review of the debt was completed which may be different to the month the debt was raised.

2Debts can be reassessed multiple times. This is recorded each time as a reassessment in the appropriate month.

2(b) The breakdown by postcode is at Attachment A. To protect individuals’ privacy, cell sizes of less than five are represented as “<5”.

What it has taken the Turnbull Government so long to admit is that 37.31 per cent of the 19,980 incorrect debt notices sent out between 1 July 2016 and 31 March 2017 were manifestly false debts.

In the same period a further 62.68 per cent of the 19,980 incorrect debt notices had amounts owed reduced – sometimes to under $20.

What these figures do not reveal is the total number of people who received a debt notice over these eight months and the number who paid the original amount listed on the debt notice because they were afraid to challenge Centrelink even though they personally doubted that any money was owed.

Nor is there any indication of how many Centrelink clients were referred to aggressive private debt collectors by the department.

What is known was that 1,569,911 people were sent debt notices in the 2016 calendar year alone [Commonwealth Ombudsman—Department of Human Services: Centrelink’s automated debt raising and recovery system].

Of these 20 per cent were admitted by the Dept. of Social Services to be false debts and 80 per cent were recoded as debts against a Centrelink client resulting in $300 million repaid by welfare recipients over a six month period [Minister for Social Security and Liberal MP for Christian Porter, transcript, 4 January 2017].

A total of 216,000 debt notices were generated in the three months leading up to Christmas 2016 and 133,078 alleged debts were recovered.

The Turnbull Government expects to claw back a total of $4 billion from welfare recipients by 2021.

The number of suicides as a result of a Centrelink debt notice is also unknown to date, although at least one recorded death had Centrelink debt as a contributing factor.