CENTRELINK ROBO-DEBT: the nightmare continues

Given that the Turnbull Government continues to apply a faulty algorithm to Centrelink debt collection in 2018, private debt collectors remain financially incentivised to aggressively chase debts which may not actually exist, former welfare recipients may still receive debt recovery fee demands and government intends to expand collection to other groups/forms of declared income, while Minister for Human Services Alan Tudge is yet to fix the problems with ‘phone wait times, perhaps a reminder of what the title Online Compliance Intervention actually hides and what the alternative term robo-debt  describes……..

Cory Doctorow writing in Boing Boing, 1 February 2018:

In a textbook example of the use of big data to create a digital poorhouse, as described in Virginia Eubanks's excellent new book Automating Inequality, the Australian government created an algorithmic, semi-privatised system to mine the financial records of people receiving means-tested benefits and accuse them of fraud on the basis of its findings, bringing in private contractors to build and maintain the system and collect the penalties it ascribed, paying them a commission on the basis of how much money they extracted from poor Australians.

The result was a predictable kafkaesque nightmare in which an unaccountable black box accused poor people, students, pensioners, disabled people and others receiving benefits of owing huge sums, sending abusive, threatening debt collectors after them, and placing all information about the accusations of fraud at the other end of a bureaucratic nightmare system of overseas phone-bank operators with insane wait-times.

GillianTerzis writing in Logic, a magazine about technology, 2017:

Automation is dehumanizing in a literal sense: it removes human experience from the equation. In the case of the robo-debt scandal, automation also stripped humans of their narrative power. The algorithm that generated these debt notices presented welfare recipients with contrasting stories: the recipients claimed they’d followed the rules, but the computer said otherwise.

There were few official ways to explain one’s circumstances: twenty-nine million calls to Centrelink went unanswered in 2016, and Centrelink’s Twitter account seems explicitly designed to discourage conversational exchange. One source of narrative resistance is notmydebt.com.au, a website run entirely by volunteers that gathers false debt stories from ordinary Australians so that the “scandal can't be plausibly minimised or denied.”

Over time it was revealed that many of these debts were miscalculated or, in some cases, non-existent. One man I’d read about was on a government pension and saddled with a $4,500 bill, which was revised down months later to $65. Another recipient, who was on disability as a result of mental illness, had a debt notice of $80,000 that was later recalled. A small proportion of recipients were exclusively in contact with private debt collectors and received no official notice from Centrelink at all.

Soon it emerged that social services were a lucrative avenue for corporate interests: this year’s Senate inquiry revealed that some private agencies tasked with recouping debts were working on a commission basis, pocketing a percentage of the debts they had recovered for the government regardless of their validity. (All debt notices issued by private agencies were eventually rescinded after government review in February 2017.)

The methodology of the algorithm itself was riddled with flaws. It calculates the average of an individual’s annual income reported to the Australian Tax Office …..and compares it with the fortnightly earnings reported to Centrelink by the welfare recipient. All welfare recipients are required to declare their gross earnings (income accrued before tax and other deductions) within this fourteen-day period. Any discrepancy between the two figures is interpreted by the algorithm as proof of undeclared or underreported income, from which a notice of debt is automatically generated.

Previously, these inconsistencies would be handled by Centrelink staff, who would call up your employer, confirm the amount you received in fortnightly payments, and cross-index that figure with the one calculated in the system. But the automation of the debt recovery process has outsourced authority from humans to the algorithm itself.

It’s certainly efficient: it takes the algorithm one week to generate 20,000 debt notices, a process that would take up to a year if done manually. But it’s not a reliable method of fraud detection. It’s blunt, unwieldy, and error-prone. It assumes that variations in the data sets are deliberate, and that recipients have received more than what they are entitled to. What’s more, the onus is on the welfare recipient to prove their income has been reported correctly and that the entitlements they have received are commensurate within twenty-one days.

Yet, as many critics have noted, this income-averaging method is porous. It fails to accurately account for the fluctuating fortunes of casual or contract workers, which often results in variations between the two figures. There’s also no way for the algorithm to correct for basic errors in the system’s database. It cannot yet discern whether an employer’s legal name has been used instead of its various business names—it treats them as separate entities, and therefore separate sources of income—or whether conflicting reports are caused by basic mistakes, such as spelling errors or typos. These seemingly small distinctions are ones that only a human could make. It’s no wonder, then, that conservative estimates of its error rate hover at 20 percent……

Yet the irony of stigmatizing welfare recipients is that better-off Australians are major beneficiaries of social spending. The Australian writer Tim Winton notes that the country’s middle class has “an increasing sense of entitlement to welfare,” which is “duly disbursed largely at the expense of the poor, the sick, and the unemployed.” These include tax concessions on contributions to “superannuation,” which are funds designed to help Australians save for their retirement. Such concessions are distortionary: they’re levied at a flat rate of 15 percent, rather than at a progressive rate according to one’s income, which means their benefits are reaped overwhelmingly by the rich.

The Australian Bureau of Statistics calculates that nearly one third of these concessions are claimed by the top 10 percent of income earners in Australia. Then there are policies like negative gearing, a tax concession that allows you to claim a deduction against your wage income for losses generated by any rental properties you own. (Australia and New Zealand are the only countries in the world to hold such a policy.) In addition, Australian homeowners are entitled to a capital gains tax discount of 50 percent once the property is sold.

Critics have argued that the combination of these two policies only serves to fuel investor speculation, entrench housing unaffordability, and lock first-time home buyers out of the market. But it’s easier to attack the poor than to tax the rich.

Commonwealth Ombudsman, Centrelink’s Automated Debt Raising And Recovery System:  A Report About The Department Of Human Services’ Online Compliance Intervention System For Debt Raising And Recovery, April 2017:

EXECUTIVE SUMMARY

In July 2016 the Department of Human Services (DHS) - Centrelink launched a new online compliance intervention (OCI) system for raising and recovering debts. The OCI matches the earnings recorded on a customer’s Centrelink record with historical employer-reported income data from the Australian Taxation Office (ATO). Parts of the debt raising process previously done manually by compliance officers within DHS are now done using this automated process. Customers are asked to confirm or update their income using the online system. If the customer does not engage with DHS either online or in person, or if there are gaps in the information provided by the customer, the system will fill the gaps with a fortnightly income figure derived from the ATO income data for the relevant employment period (‘averaged’ data). 

Since the initial rollout of the OCI, the Commonwealth Ombudsman’s office has received many complaints from people who have incurred debts under the OCI. This report examines our concerns with the implementation of the OCI, using complaints we investigated as case study examples. 

We acknowledge the changes DHS has made to the OCI since its initial rollout. The changes have been positive and have improved the usability and accessibility of the system. However, we consider there are several areas where further improvements could be made, particularly before use of the OCI is expanded. We have made several recommendations to address these areas......

Planning and risk management

In our view, many of the OCI’s implementation problems could have been mitigated through better project planning and risk management at the outset. This includes more rigorous user testing with customers and service delivery staff, a more incremental rollout, and better communication to staff and stakeholders. DHS’ project planning did not ensure all relevant external stakeholders were consulted during key planning stages and after the full rollout of the OCI. This is evidenced by the extent of confusion and inaccuracy in public statements made by key non-government stakeholders, journalists and individuals.

A key lesson for agencies and policy makers when proposing to rollout large scale measures which require people to engage in a new way with new digital channels, is for agencies to engage with stakeholders and provide resources for adequate manual support during transition periods. We have recommended DHS undertake a comprehensive evaluation of the OCI in its current form before it is implemented further and any future rollout should be done incrementally.

Centrelink website, 5 February 2018:

If you don’t pay your debt by the due date, we may ask the Australian Taxation Office (ATO) to send us your tax refund. If we do we’ll send you a Recovery of your Centrelink debt letter.

If you aren’t repaying your debt over time or if we haven’t agreed to extend the payment time, we may also:

* add an interest charge to your debt

* refer your debt to an external collection agency

* reduce your income support payments to help pay the amount owing

* recover the amount from your wages, other income and assets, including money you may hold in a bank account

* refer your case to our solicitors for legal action

* issue a Departure Prohibition Order to stop you from travelling overseas....

The rate of interest we apply to your debt is consistent with the current rate applied by the ATO to tax debts. 

So how much Centrelink client debt was not debt at all in 2015-16 & 2016-17?

Australian Minister for Social Services Christian Porter is quick to point the finger but often very slow with concrete answers, so it is always a boon when annual departmental reports are published.

In September 2017 the latest DSS annual report was published.

Although carefully disguised in the wording "waived or written off"; by adding the 2016-17 annual report's financial statements together with the previous year’s annual report, one finds that the admitted amount of false client debt generated by Centrelink’s disastrous attempt to match Australian Taxation Office data with its own client records could possibly be as high as $264.645 million over a two financial year period.

As challenging a Centrelink debt letter was a distressing and often extremely difficult obstacle course for many welfare recipients, these hundreds of millions of dollars represent the determination of hundreds of thousands of ordinary Australians to fight back against false claims made on their wallets by government and the besmirching of their reputations.

On 26 October 2017 The Canberra Times reported that; Human Services official Jason McNamara told a Senate estimates hearing that in 202,000 cases where the department finalised the debt amount, 49,000 welfare recipients who received letters since the 'robo-debt' program started in July 2016 were found to owe nothing.

That means that 25.25% of these 202,000 debt notices were false claims as the Centrelink client was found to owe nothing.

In July and August this year Centrelink sent out a total of 114,000 debt letters.

At least est. 28,785 of these letters will probably represent a false claim of debt.

I hope all Centrelink clients who received one of these letters are querying each and every one.

BACKGROUND

Dept. of Social Services Annual Report 2016-17

Dept. of Social Services Annual Report 2015-16

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.

Quotes of the Week

Those who ignore history are condemned to retweet it. 

[David Brooks writing in The New York Times on 8 April 2017]

The algorithm purportedly used by the Department to match business names between the ATO dataset and Centrelink data was leaked to the media, and I undertook an analysis of it. This algorithm is breathtakingly naïve and will result in incorrect matches for common situations such as typographical errors, misplaced punctuation, and the legal entity name being different from the business trading name. The potential for mismatches is significant. Various more sophisticated fuzzy matching algorithms are readily available. [Senate Standing Committees On Community Affairs, Inquiry Into Design, Scope, Cost-Benefit Analysis, Contracts Awarded And Implementation Associated With The Better Management Of The Social Welfare System Initiative, Submission 38]

Australian Dept. of Human Services and Centrelink sink to a new low

An automated Dept. of Human Services-Centrelink debt recovery system that launched an est. 230,000 investigations into client welfare paymentsin 2016-17, then used an error-prone “income averaging” method to decide that more than 133,000 clients had incurred a debt owed to Centrelink and sent them a bill which included a recovery fee.

If that wasn’t bad enough, around 43 per cent of these debts were immediately referred to heavy-handed private sector debt collectors working on commission.

During this entire debacle spokespersons for the Turnbull Government, the Department and Centrelink have attempted to mislead and misinform welfare clients, mainstream media and the general public.

Now we have been told that for months, perhaps years, the software program being used by Centrelink to run its access to online services portal left users vulnerable to phishing attacks which can steal their credentials including names, addresses, bank account details.

If this is yet another example of the innovative and agile government information technology Liberal and National Party MPs boast about - then gawd help us all!

Comment  on office of the Minister for Human Services, Mr Alan Tudge

By an IT consultant.......

Senate Standing Committees On Community Affairs, Inquiry Into Design, Scope, Cost-Benefit Analysis, Contracts Awarded And Implementation Associated With The Better Management Of The Social Welfare System Initiative, Excerpt from Submission 38:

That Victorian Legal Aid saw it necessary to update its advice to clients to warn them that their personal information is no longer safe with the Department is an extraordinary situation. This is not advice from tinfoil-hat-wearing conspiracy theorists. This is sober advice from legal professionals that a major part of the Australian Government cannot be trusted. I cannot stress enough how bad this is.

This behaviour from the Department has had a chilling effect, as I believe it was intended to. This chilling effect is not theoretical. I have personally spoken to individuals who have been reluctant to speak out against the Department, either to the media or to this Inquiry, because they fear repercussions from the Department as they are dependant in some way on income support.

At one point I discussed these matters with the office of the Minister for Human Services, Mr Alan Tudge, and was alarmed to discover that his office did not share my view that the Department has an asymmetric power advantage over individuals. They were of the view that if an individual is critical of the Department in the media, they become fair game.

The attitude from Mr Tudge’s office appeared to be one of a siege mentality where they were at a substantial disadvantage despite the vast array of resources at their disposal, particularly when compared to an individual reliant on income support. They felt that there had been a lot of false information being reported in the media and that it was time for them to “start fighting back.” This adversarial attitude, coupled with the astounding levels of secrecy from the Department, indicates major cultural issues in the Department and in the responsible Minister’s office.

The Department of Human Services exists to serve the humans in our society. The clue is in the name of the department. If individuals within the Department are unhappy with their role, then they should be encouraged to seek employment elsewhere.

By a Queen's Counsel.......

ABC News, 3 April 2017:

One of Australia's leading criminal barristers believes Human Services Minister Alan Tudge — or one of his staff — may have broken the law by supplying a journalist with a Centrelink client's personal information.

Robert Richter, a Queen's Counsel and former chairman of the Criminal Bar Association, believes the disclosure could lead to a prison sentence if it is tested beyond reasonable doubt in a criminal court.

Mr Tudge has dismissed the legal advice, saying the disclosure was approved by his department's lawyers and was necessary to correct misleading public statements.

"I received clearance to release the information from the Chief Legal Counsel of the Department of Human Services, who is intimately across the details of the case and the relevant laws."

Mr Richter's advice was commissioned by Labor MP Linda Burney and his findings were based on public information, rather than inquiries with Mr Tudge's office.

In his opinion, it is "reasonably clear that either the Minister or one of his office's staff had committed an offence".

"We cannot presently put it higher without knowing precisely the content of the information that was disclosed and by whom it was disclosed," Mr Richter said……

Shorter Acting Commonwealth Ombudsman Richard Glenn: yes, it was a #CentrelinkFAIL

Commonwealth Ombudsman, media release, 10 April 2017:

Ombudsman publishes report on Centrelink’s automated debt system

Acting Commonwealth Ombudsman Richard Glenn today released a report into the Department of Human Services – Centrelink’s (DHS) implementation of the automated debt system known as the Online Compliance Intervention (OCI).

‘We found there were issues with the usability and transparency of the system. There were deficiencies in DHS’ service delivery and communication to customers and staff when implementing the system. These issues affected the quality of decisions made by the OCI. Many of these problems could have been reduced through better project planning, system testing and risk management,’ Mr Glenn said.

Since the Ombudsman’s office began its investigation in January 2017, DHS has made positive changes to the system, in response to the office’s feedback.

‘However more improvements are needed to ensure the system reflects good public administration,’ Mr Glenn said.

The Ombudsman’s office made recommendations in the report about clearer letters and system messaging to customers, more help for customers when gathering income information, improving service delivery and communication, more assistance and support for vulnerable customers and reviewing automated recovery fee decisions.

DHS and the Department of Social Services (DSS), which is responsible for the relevant legislation and policy, responded positively to the Ombudsman’s investigation, agreeing to all recommendations.

Mr Glenn said the Ombudsman’s office would continue to work closely with DHS and DSS to monitor the implementation of the recommendations in this report. He also acknowledged DHS’ assistance during the investigation.

The Ombudsman will make no further comment on the report.

Excerpts from the 110 page report illustrating just some of the shortcomings in Centrelink’s automated debt recovery program:

We asked DHS whether it had done modelling on how many debts were likely to be over-calculated as opposed to undercalculated. DHS advised no such modelling was done.16 In our view the absence of modelling means DHS cannot say how many debts may be under-calculated or overcalculated and by what margin.

The risk of over-recovering debts from social security recipients and the potential impact this may have on this relatively vulnerable group of people, warrants further consideration by DHS. We suggest DHS test a sizeable sample of debts raised by the OCI. The samples should include people who did not respond to the initial letter, as well as people who went online and people who contacted DHS via other channels. We also suggest DHS re-evaluate where the risk for debts calculated on incomplete information should properly lie and investigate whether there are ways to mitigate this risk……

In the OCI, the automatic application of the ten per cent recovery fee occurs when there is no contact from the customer, or the customer specifically indicates they did not have personal factors which affected their ability to accurately declare their income. 3.8 This raised concerns for customers who may not have had an adequate opportunity to provide a reasonable excuse, for example if they did not receive the initial letter, or did not understand the connection between reasonable excuse and the recovery fee.

In the initial letters used from July 2016, customers were warned a recovery fee may be applied, however there was no information in the letter about the ‘reasonable excuse’ exception. DHS advises that an explanation of ‘reasonable excuse’ was added from August 2016. However, reminder letters and debt notification letters did not include this information. A copy of these letters can be found at Appendix D.

In response to concerns raised by our office, DHS will no longer apply the fee automatically where there is no contact from the customer, or the customer responds that they had personal factors which affected their ability to accurately declare their income. DHS has taken steps to ensure that customers receive the initial letter, including the use of registered post……

Our investigation revealed the letters DHS sent to customers before 20 January 2017 to alert them about the income discrepancy were unclear and deficient in many respects. The letter did not include the 1800 telephone number for the compliance helpline. It did not explain that a person could ask for an extension of time or be assisted by a compliance officer if they had problems. It asked the person to ‘confirm’ their income information, possibly giving the impression that, if the figure was the correct annual figure, merely confirming the information would suffice. The letter did not provide a clear explanation that applying ATO income to the person’s record may negatively affect the amount of any debt. Copies of these letters are at Appendix D……

We received other complaints where people were told by DHS staff that payslips were the only acceptable form of evidence and bank statements would not be accepted. In our view, DHS should have more clearly communicated to customers the evidence they needed to provide, and what they could do if they had problems obtaining this evidence. In particular, DHS should have given customers a clearer and more consistent message that it would accept alternative forms of evidence, such as bank statements, where a customer was having difficulty gathering payslips or other evidence directly from the employer. As illustrated by Ms H’s complaint, in some cases, DHS can consult its own records for employment information it may have previously verified.

DHS has always accepted bank statements as reasonable evidence of historical income where other evidence is unavailable. As customers do not have the same information gathering powers as DHS, it is critical for DHS to give some customers additional support and assistance to obtain this evidence when they have made genuine and reasonable attempts and other available information is not sufficient. The accuracy of debts relies on the customer’s ability to obtain and input historical income information into the OCI. DHS should take into account the potential cost to customers to obtain bank statements. We suggest that where a customer cannot obtain the information despite genuine and reasonable attempts, DHS should use its information gathering powers to request the information directly from the employer or the financial institution. We suggest the Department of Social Services should include guidelines about the process for obtaining employment income evidence in the Guide to Social Security Law…..

Poor service delivery was a recurring theme in many of the complaints made to our office about the OCI system. Key problems customers experienced were:

* the compliance helpline number was excluded from letters and hard to find within the OCI system itself, meaning customers called the general customer service lines resulting in longer wait times than the compliance line

* not getting a clear explanation about the debt decision and the reasoning behind it

* being required to go online to resolve their situation when they had already indicated they were having difficulties

* instances where there should have been a more thorough manual intervention by a compliance officer but the customer was still referred back online

* difficulties getting information and assistance from service centre staff, either on the phone or in person, or when they tried to go online to use the system

* staff not having sufficient knowledge about how the OCI system works.

The far-right Turnbull Government's response to the Commonwealth Ombudman's report reeks of a defensive inability to face the consequences of its ongoing ideological class war.

The Guardian, 10 April 2017:

In a statement, Tudge repeatedly noted the parts of the report that defended the automated system and said the government was already making improvements that, in some cases, went further than what was suggested by the ombudsman.

“The unfortunate reality is that while most welfare recipients do the right thing, some deliberately defraud the system while others inadvertently fail to accurately declare their income and consequently receive an overpayment,” he said.

“We want to be fair and reasonable to welfare recipient but also fair to the taxpayer who pays for the welfare payments.”

The shadow human services minister, Linda Burney, said the report raised “serious questions about Alan Tudge’s oversight of his department”.

“While some changes have been made to Tudge’s robo-debt system, the ombudsman is clear they don’t go far enough,” she said. “The minister has no one to blame but himself. According to the ombudsman, all of these issues could have been avoided with proper planning and consultation.”

The shadow treasurer, Chris Bowen, said Labor maintained the system should be suspended for a review.

Complaints to Centrelink have jumped since first Abbott and then Turnbull became Australian prime minister

If the sharp rise in complaints shown on this graph from 2013-14 onwards is any indication, then neither Tony Abbott nor Malcolm Turnbull made wise decisions regarding which of their ministers should have charge of the portfolio which contains the Dept. of Human Services and Centrelink.

The odd spike in the percentage of “suggestions” in 2015–2016 seems to indicate this as a possibility and the real number may be higher. I doubt that suddenly in 2015–16 there was a jump in people suddenly having ideas to improve Centrelink’s service, and the will to communicate that directly to Centrelink’s feedback line. [Senate Community Affairs References Committee, Inquiry into Design, scope, cost-benefit analysis, contracts awarded and implementation associated with the Better Management of the Social Welfare System initiative, Submission 27]

And the Turnbull Government robo-debt debacle blunders on

The Canberra Times, 29 March 2017:

Centrelink hit at least 21,000 families with bogus Family Tax Benefit debts last year, the federal government has conceded.

The welfare agency sent 65,000 demands in November 2016 to repay money received through the family assistance payment but about 21,400 of the families hit with the debt notices were able to prove they owed Centrelink nothing.

Centrelink's parent department, Human Services, blames the error rate of at least 33 per cent on its clients' failure to "engage" and says it has already improved its efforts to get in touch with recipients.

But Labor is scathing of the latest debt recovery revelation, saying something is "terribly wrong" at Centrelink and "hardworking, honest Australians" have been "intimidated" into handing over their money.

The true rate of bogus debts could be higher than the official 33 per cent because the Human Services does not record or disclose how many families simply paid the money to get Centrelink off their backs or lacked the documentation to fight the debt notices.

The Family Tax Benefit recovery effort is a separate process to the controversial 'robo-debt' data-matching scheme which has mired Centrelink in controversy for several months….

…65,000 debt notices had to be raised in November 2016," Human Services said.

"Of these debt notices, 33 per cent were then changed to zero dollars as the individual responded with further information once they had received the debt notice and a reassessment was able to be undertaken."

The department also noted the rate of bogus FTB debts dwarfed that of robo-debt…..

The optics are bad for the Turnbull Government in 2017

On 9 December 2015 the Tenterfield Star reported that Federal Nationals Leader and Deputy Prime Minister Barnaby Joyce had been spending big on electoral offices and travel:

BARNABY Joyce has gone on the defensive after he skyrocketed to the top of the pile for claimed expenditure.

The Member for New England has registered $1,073,991.45 in expenses over the first six months of 2015, new documents have revealed.

A year later and, in addition to another hefty bill for office facilities, from January to June 2016 Joyce received the following payments from the Dept. of Finance:

$76,459.42 air travel costs for self & family members

$23,668 accommodation in Canberra & when travelling

$17,907.20 private car costs

$12,123.98 chauffeured car for self & family members.

So it comes as no surprise that this meme appeared in March 2017:

Following hot on the heels of these media reports.

News.com.au, 8 March 2017:

Figures provided to the department today show Human Services launched more than 103,000 assessments into overpaid welfare recipients in November and December alone.

The department ramped up its recovery efforts in September with the number of assessments increasing from 844 in August to more than 62,000 the next month.

Overall, about 216,000 investigations were launched from September to December and 133,078 debts were recovered.

More than 97,000 people were charged a “recovery fee”as they had not provided information about their income or a reasonable explanation for the lack of information.

Five and a half thousand people had their debts waived as they were under $50 and were not cost effective to pursue or because there was an administration error or unusual circumstances.

Greens Senator Rachel Siewert, chair of the senate inquiry, said the government “should be ashamed” of calling in debt notices over Christmas.

“A large portion of those had a recovery fee applied, meaning struggling Australians are paying debts they may not owe as well as additional recovery fees,” she said.

“I continue to hold deep concerns that people are complying and paying debts off that don’t exist - 2875 people so far have had their debts reduced to zero since the program began but I suspect many people are still in the process of reassessment and review.

“Unfortunately the Department couldn’t provide these figures and took that question on notice.

“I fear far more people did not challenge the debt so the figure could be far worse.

“It is a shame the Department has steadfastly supported the system with some adjustments despite overwhelming evidence that it is causing great distress to struggling Australians.”

Centrelink’s “aggressive” debt collection tactics came under fire at the Senate inquiry.

The inquiry heard elderly welfare recipients have received inaccurate debt notices of thousands of dollars, generated by the automated system, before it was confirmed they owed just $50.

Senators also heard private debt collectors, engaged by Centrelink to recover debts, have threatened to seize clients’ assets or take them to court if they failed to pay what was owed to the agency.

The Community and Public Sector Union raised concerns Centrelink staff have faced increased aggression from welfare recipients since the scheme launched.

Staff have dealt with swearing, threats, physical aggression and spitting as clients faced increased financial stress from debt recovery notices, CPSU national deputy president Lisa Newman said.

The union is pushing for the scheme to be suspended while the government reviews it.

Australian Council of Social Services bosses raised concerns that Centrelink was not subject to consumer protection laws.

The Sydney Morning Herald, editorial excerpt, 11 March 2017:

More than 36,000 of those letters did not result in any debt to Centrelink. What's more, about 6600 welfare recipients first learnt of their alleged debt from debt collectors.

Mr Tudge blamed those people for failing to update addresses on their Centrelink files.

While his department head Kathryn Campbell claims the system has been adjusted to reduce that risk, she also blamed welfare recipients – for not replying to the initiating letters.

Worse, Ms Campbell said she would not discuss potential solutions to systemic flaws with the Australian Council of Social Service or unions representing staff who have to handle the backlash.

The justification Ms Campbell gave for not meeting with unions or ACOSS was that the media was interested in the issue. The justification Mr Tudge gave on ABC radio was that unions and ACOSS "frankly have a philosophical objection" to widespread compliance checks.

 The Herald suspects Mr Tudge and his department have a philosophical objection to legitimate public scrutiny.

Thank goodness the media are holding the department and the minister to account because, failing that, thousands of people would be demonised in secret and there would be no Senate committee inquiry exposing the flawed process.

The committee began public hearings this week into the error rates of debt notices; the government's response to concerns raised by affected individuals; whether the debt recovery scheme complies with Australian privacy and consumer laws; and the adequacy of the data matching of Centrelink and ATO information.

Deputy Commissioner of Taxation Greg Williams told the inquiry the ATO had "reached out" to the Human Services Department as flaws emerged in the robo-debt system, but was told its help was not required. 

"We are involved in identity matching and the provision of data, but we are not involved in the data-matching that occurs on the DSS/DHS side," Mr Williams said. "We are trying to maintain the level of integrity in the role of the ATO in this exercise."

The Senate inquiry is also accepting submissions from people who have been forced to deal with the system. 

The first submission on the committee's website comes from a "a teacher, university lecturer and single mother who has been working part-time since my son was nine months old". She tells how the system "impacted my mental health and caused significant stress over the Christmas period. Not only did I suffer, but my inability to fully engage with family at this time also impacted them." She spent eight hours on the phone with Centrelink only to find that her debt was $0. "Apparently this was a mistake and a day later … it was up to over $1300," the submission says. "On receipt of the second letter I broke down in tears again ... it turned out I had been overpaid by Centrelink less than $1.80 a week. I am hard-working, smart and determined to fight this because I knew I reported my income to the best of my ability. There will be a lot of people who are not in the mental headspace, or have the ability to work out that Centrelink are wrong."

The price of a system with insufficient human oversight and flawed safeguards is too great. The Senate committee should propose alternatives that offer taxpayers value for their welfare dollar without demonising innocent people.