Senior government officials have confirmed 10,000 'robodebt' notices were accidentally sent to welfare recipients in April 2019 when they were meant to remain on hold for review.
Departmental bureaucrats discovered the error within two days and placed the alleged debts on hold.
However, the department did not contact those persons who had received these 10,000 "accounts payable notices".
To date only 200 welfare recipients who received these improper debt notices have contacted the Dept. of Human Services/Centrelink.
That leaves 9,800 current and/or former welfare recipients probably worrying themselves sick over a debt it is highly likely they don't actually owe. Readers can listen to the short ABC report here:
https://abcmedia.akamaized.net/radio/local_sydney/audio/201910/pam-2019-10-25-robodebt-estimates.mp3
In addition to this error, in seeking recovery of money allegedly owed by welfare recipients Centrelink deliberately sent out debt notices to 169 welfare recipients who were already dead, while it also approached representatives of “deceased customers” in 515 cases.
According to The Guardian on 25 October 2019, in a recent Senate Estimates hearing the Department of Human Services has also not ruled out targeting age pensioners and other vulnerable people as part of the controversial robodebt scheme, saying any decision to expand the scheme in order to meet budget targets would be made “further down the track”.
On 3 October 2019 the Australian Council of Social Service (ACOSS) informed the Senate Community Affairs Legislation Committee inquiry into Centrelink's compliance program that:
ACOSS has held
deep concerns about Centrelink's compliance program, otherwise known as robo-debt—which I will refer to here
mostly in that way—since its inception. Despite some improvements to the implementation of the program, two
fundamental design flaws remain inherent. One is the use of the averaging of ATO-reported annual income over
the period someone has received income support, which is leading to incorrect calculations of overpayments. The
other is the reversal of the onus of proof, which requires people to disprove alleged debts on the basis of very
limited information. Under the current system, an individual's earnings data is matched with ATO data through an
automated process. Where a discrepancy is identified, an individual is invited to confirm or update their income.
This may go back some years and be extremely difficult, if not impossible, for people to obtain the necessary
information from previous employers. Where they don't provide the relevant information, the department uses
averaged ATO data as a default. The department does this in full knowledge that's it's unlikely to produce an
accurate or fair outcome, which its own debt recovery guidelines indeed warn.
At present, there is a lack of transparency about the proportion and the number of debts raised as a result of ATO averaging processes, so we urge the committee, as part of this hearing, to seek information from the department for public release to inform this inquiry and the broader public debate about the policy. The robo-debt scheme also shifts the work of verifying income onto individuals, work that used to be done by the department, as well as shifting the onus of proof. As such, individuals are required to obtain historic payslips, bank statements and other records going back up to six years. If they are unable to do so, they risk incurring a debt erroneously. We note that Centrelink's previous guidelines advised people to keep employment records for six months, in stark contrast to the six-year period over which robo-debt ranges. This is deeply unfair.
In addition to these fundamental design flaws, we hold concerns about the role of third party private companies in the compliance system, both as frontline staff in private service centres and in private debt collection agencies. We understand that to date one in three robo-debts have been sent to debt collectors. Direct engagement with people, often on low incomes and facing a range of life stresses, about their financial situation requires sensitivity and technical expertise. It's not appropriate for these functions to be outsourced to private operators who sit outside Centrelink, while Centrelink itself remains grossly understaffed.
There are a range of other factors that compound unfairness of the current system. The first is that the government has extraordinary powers to enforce the debt owing to it, including to ban people from travelling internationally to garnish their tax returns and to charge interest on debt load. The automatic imposition of a debt recovery fee on debts prior to June 2017 adds further insult to injury for people affected. There is higher rate of erroneous debts calculated through the flawed data-matching algorithm, many of which will not be challenged and so we have no way of knowing, in fact, how many are in error, and the higher cost of administering the program at a time when our government says it doesn't have funds available to address other urgent priorities in social security systems.
Finally, we'd like to remind the committee of the human impacts of this policy. Around a million income discrepancy notices have been issued since 2015 and half a million alleged it. And while every person's situation is different and not everybody is in a vulnerable situation, we know these notices have caused deep distress and anxiety for many people who've received them. Despite some exemptions, we know that they have been sent to people with mental health problems, people who've experienced trauma, people recently bereaved, people who are currently living on very low payments, people who are in financial hardship and people who are homeless. We also know that the impact has been devastating for many of those people, and they are very concerned at reports that the government might seek to narrow the range of available exemptions. We urge the committee to ensure that they hear from people directly affected by this scheme in the course of these hearings, including as witnesses.
In closing, improvements to the implementation of the scheme, which we do acknowledge have not cured the fundamental design flaws at its heart, continue to cause great harm and distress. We urge the committee, therefore, to recommend suspension of the program and its replacement by a more transparent, fair, accurate and humane system of debt recovery
At present, there is a lack of transparency about the proportion and the number of debts raised as a result of ATO averaging processes, so we urge the committee, as part of this hearing, to seek information from the department for public release to inform this inquiry and the broader public debate about the policy. The robo-debt scheme also shifts the work of verifying income onto individuals, work that used to be done by the department, as well as shifting the onus of proof. As such, individuals are required to obtain historic payslips, bank statements and other records going back up to six years. If they are unable to do so, they risk incurring a debt erroneously. We note that Centrelink's previous guidelines advised people to keep employment records for six months, in stark contrast to the six-year period over which robo-debt ranges. This is deeply unfair.
In addition to these fundamental design flaws, we hold concerns about the role of third party private companies in the compliance system, both as frontline staff in private service centres and in private debt collection agencies. We understand that to date one in three robo-debts have been sent to debt collectors. Direct engagement with people, often on low incomes and facing a range of life stresses, about their financial situation requires sensitivity and technical expertise. It's not appropriate for these functions to be outsourced to private operators who sit outside Centrelink, while Centrelink itself remains grossly understaffed.
There are a range of other factors that compound unfairness of the current system. The first is that the government has extraordinary powers to enforce the debt owing to it, including to ban people from travelling internationally to garnish their tax returns and to charge interest on debt load. The automatic imposition of a debt recovery fee on debts prior to June 2017 adds further insult to injury for people affected. There is higher rate of erroneous debts calculated through the flawed data-matching algorithm, many of which will not be challenged and so we have no way of knowing, in fact, how many are in error, and the higher cost of administering the program at a time when our government says it doesn't have funds available to address other urgent priorities in social security systems.
Finally, we'd like to remind the committee of the human impacts of this policy. Around a million income discrepancy notices have been issued since 2015 and half a million alleged it. And while every person's situation is different and not everybody is in a vulnerable situation, we know these notices have caused deep distress and anxiety for many people who've received them. Despite some exemptions, we know that they have been sent to people with mental health problems, people who've experienced trauma, people recently bereaved, people who are currently living on very low payments, people who are in financial hardship and people who are homeless. We also know that the impact has been devastating for many of those people, and they are very concerned at reports that the government might seek to narrow the range of available exemptions. We urge the committee to ensure that they hear from people directly affected by this scheme in the course of these hearings, including as witnesses.
In closing, improvements to the implementation of the scheme, which we do acknowledge have not cured the fundamental design flaws at its heart, continue to cause great harm and distress. We urge the committee, therefore, to recommend suspension of the program and its replacement by a more transparent, fair, accurate and humane system of debt recovery
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