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......
AS IT UNFOLDED…..
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
6.7.1.45 Ten per cent
Recovery Fee on Debts from False or Non-declaration of Income from Personal
Exertion
Overview
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, DSP, WP, WidB 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 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.
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.
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.”
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.
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.
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.”
