The Dept. of Human Services incorrectly sent out 10,000 "accounts payable notices" and did not inform the welfare recipients of its error

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

The only Australians who do not recognise the cruel farce that is 'robo-debt' are right-wing politicians, ideologues and the just plain ignorant

“It is trite maths that statistical averages (whether means or medians) tell nothing about the variability or otherwise of the underlying numbers from which averages are calculated. Only if those underlying numbers do not vary at all is it possible to extrapolate from the average a figure for any one of the component periods to which the average relates. Otherwise the true underlying pattern may be as diverse as the experience of Australia’s highly variable drought/flood pattern in the face of knowledge of ‘average’ yearly rainfall figures. Yet precisely such a mathematical fault lies at the heart of the introduction from July 2016 of the OCI machine-learning method for raising and recovering social security overpayment debts. This extrapolates Australian Taxation Office (‘ATO’) data matching information about the total amount and period over which employment income was earned, and applies that average to each and every separate fortnightly rate calculation period for working-age payments.”  [Terry Carney AO, UNSW Law Journal, Vol 42 No 2, THE NEW DIGITAL FUTURE FOR WELFARE: DEBTS WITHOUT LEGAL PROOFS OR MORAL AUTHORITY?, p2]

The Canberra Times, 5 April 2018:

The Coalition government's "robo-debt" program has been unlawfully raising debts with welfare recipients, wreaking "legal and moral injustice", a former administrative appeals tribunal member has said.

Emeritus professor of law at the University of Sydney Terry Carney, who was on the Administrative Appeals Tribunal for 40 years and was its longest serving member until finishing in September, has weighed into the debate over the controversial debt collection method saying the Department of Human Services has no legal basis to raise debts when a client fails to ‘disprove’ they owe money.

While Professor Carney urged it be made to comply with the law, the DHS rejected his comments, saying its Online Compliance Intervention program was consistent with legislation.

"Robo-debt" - the subject of a Commonwealth Ombudsman report and a Senate inquiry recommending sweeping reforms to the program - was at the centre of a maelstrom of controversy last year and remains loathed by critics calling for change….

Writing in the UNSW Law Journal last month, he said that despite the DHS' stance it remained responsible for calculating debts based on actual earnings, not assumed averages.

“Centrelink’s OCI radically changed the way overpayment debts are raised  by purporting to absolve Centrelink from its legal obligation to obtain sufficient information to found a debt in the event that its ‘first instance’ contact with the recipient is unable to unearth information about actual fortnightly earnings. As noted by the Ombudsman, the major change was that Centrelink would ‘no longer’ exercise its statutory powers to obtain wage records and that the ‘responsibility’ to obtain such information now lies with applicants seeking to challenge a debt. Writing a little later, the Senate Community Affairs References Committee challenged this, contending that

6.13 It is a basic legal principle that in order to claim a debt, a debt must be proven to be owed. The onus of proving a debt must remain with the department. This would include verifying income data in order to calculate a debt. Where appropriate, verification can be done with the assistance of income support payment recipients, but the final responsibility must lie with the department. This would also preclude the practice of averaging income data to manufacture a fortnightly income for the purposes of retrospectively calculating a debt. …”  [Terry Carney AO, UNSW Law Journal, Vol 42 No 2, THE NEW DIGITAL FUTURE FOR WELFARE: DEBTS WITHOUT LEGAL PROOFS OR MORAL AUTHORITY?, pp3-4]

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…..

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. 

DHS & Centrelink now threatening clients who expose unfair or inappropriate implementation of social security policy?

Screenshot via @BernardKeane

Political reporter with @abcnews:

Henry Belot Verified account ‏@Henry_Belot

This Department of Human Services has just issued a pretty clear warning to Centrelink clients who want to public criticise #notmydebt.

6:03 PM - 27 Feb 2017

ABC News, 27 February 2017:

Those who publicly criticise Centrelink's automated debt recovery program could have their personal information released to correct the record, the Department of Human Services (DHS) has warned.

Blogger Andie Fox wrote an opinion piece for Fairfax Media earlier this month claiming Centrelink "terrorised" her while chasing her for a debt she believed she did not owe.

On the weekend, Fairfax published an article from the Government's perspective, raising the prospect of Centrelink being "unfairly castigated".

In the article a spokesman for Centrelink commented on Ms Fox's personal information including her history of claiming the Family Tax Benefit and relationship circumstances.

A DHS spokesman said personal information could be released by the Government to correct public statements of complaints.

"Such disclosures are made for the purposes of the social security law or the family assistance law, they do not need to be formally authorised by the secretary," the spokesman said.

"Unfounded allegations unnecessarily undermine confidence and takes staff effort away from dealing with other claims.

"We will continue to correct the record on such occasions."

Labor's Linda Burney accused DHS of "deeply unethical actions" and the Government of seeking "revenge".

"The disclosure has occurred deliberately to smear a private individual who has spoken out about the error prone robo-debt program and the deeply flawed Centrelink debt recovery process," she said.

"Correcting the record is one thing, attempting to smear and discredit opponents is entirely different and far more troubling."

Ms. Fox's response can be found at https://bluemilk.wordpress.com/2017/02/26/is-this-what-happens-when-you-criticise-government/.

However, neither Centrelink nor the Turnbull Government can stop criticism being aired during - the rather wordily titled - 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 and mainstream media reporting.

The Canberra Times, 28 February 2017:

People pursued by Centrelink over its controversial "robo-debts" are being denied the protection of Australian consumer law, a Parliamentary inquiry has been told.

The welfare agency is exempt from laws and guidelines covering debt collection by private businesses, "even the much maligned banks", according to the chief executive of Victorian community organisation Family Care, David Tennant.

But Centrelink says that is, and the private sector debt collectors hired to pursue its clients, are compliant with legal requirements.

Mr Tennant, who has a background in consumer law, says much of Centrelink's activities in pursuing its millions of dollars in "robo-debt" would be illegal if done by a non-government player.

The legal immunity enjoyed by Centrelink allows it to "pressure people for payment in ways that are objectively unfair," Mr Tennant says in his submission to the Parliamentary inquiry into the robo-debt crisis……

In his submission to the inquiry, Mr Tennant, a former chairman of the national peak body for financial counsellors, say he is surprised by the "lack of commentary about how Centrelink's conduct stacks up against the normal rules applying to the collection of debts in Australia".

"There are significant problems associated with a government department pursing a course of action that would likely be illegal if adopted by a body other than government," Mr Tennant wrote.

"It potentially erodes the confidence of those who rely on the benefit system to treat them fairly, or to recognise them as having the same rights as all citizens.

Although I suspect that one of the reasons behind Centrelink supplying personal and perhaps sensitive client information to the media may be in order to produce a chilling effect on submissions made to this particular Senate inquiry.

This inquiry is accepting written submissions until 22 March 2016.

The inquiry reporting date is 10 May 2017.

State of Play 2023: Royal Commission into the Robodebt Scheme in entering the final tranche of public hearings

 

Public hearings in the Royal Commission into the Robodebt Scheme have been underway since 31 October 2022.

Currently Hearing Block 3 is coming to an end and the final round of public hearings, Hearing Block 4, is due to commence on 20 February 2023.

This week evidence has been heard from a number of significant political & public service 'operatives': 

former Senior Media Adviser, Office of the Minister of Human Services (Aug 2016-Nov 2017), Rachelle Miller; 

former Agency Spokesperson, Department of Human Services (2000?-May 2019) & current Agency Spokesperson, Services Australia, Hank Jongen; 

Liberal MP for Aston & former Minister for Human Services (8.2.2016 to 20.12.2017), Alan Tudge; and, 

former Liberal MP for Pearce & former Minister for Social Services (21.9.2015 to 20.12.2017), Christian Porter.

However, before addressing their sworn testimony, a review of last week's hearings may be in order from journalist Rick Morton.

The Saturday Paper, 28 January 2023:

Evidence heard during one of the most incendiary weeks at the robo-debt royal commission has revealed the extraordinary lengths two federal government departments went to in order to cover up a multibillion-dollar crime that spanned years.

By early 2017, two years after the Centrelink debt fabrication scheme had begun, there were two external agencies with prying eyes threatening to expose the legal fiction on which the entire program rested.

The Commonwealth Ombudsman was investigating, and damning decisions were also coming back in greater numbers from the Administrative Appeals Tribunal.

Both the Department of Social Services and the Department of Human Services adopted a “pattern of behaviour” that would deliberately mislead the ombudsman, ignore directions from the AAT and conspire to keep the government’s dodgy decisions in-house by refusing to ever challenge them past a first-round loss with the tribunal.

It was this latter strategy – according to Emeritus Professor Terry Carney, who sat on the AAT and a predecessor tribunal for decades until the former Coalition government suddenly ended his tenure in 2017 – that was the main reason robo-debt was “able to operate for so long and at such costs to applicants”.

His evidence and the other evidence given this week is the clearest account yet of the extraordinary efforts the government and its departments went to in the name of continuing a scheme that they knew was unlawful and was raising fake debts. Tens of thousands more people were dragged into the mess while this was known.

“Had there been a public ventilation of what the AAT was ruling, there wouldn’t have been an instant change to, or abandonment of, the scheme,” Carney told the hearing on Tuesday.

“But it would have been a lot quicker than the three or more years that nearly half a million people had to suffer the raising of unlawful debts against them.”

The fact the Commonwealth never appealed against a single decision was “unprecedented”, Carney said. This was even more startling a strategy when it became clear lawyers and appeal branch managers in the Department of Human Services (DHS) knew what was going on and did nothing to change course.

"Everybody needs to understand how many thousands of people were affected so badly by a system that was put in by a government department."

Under Commonwealth model litigant obligations and separate responsibilities enshrined in social security law, the federal government is required to have “due regard” to AAT decisions and should act to contest them where it involves a significant matter of law or policy or where different decisions create “inconsistencies” in the application of policy.

Former DHS appeals branch manager Elizabeth Bundy, a qualified lawyer, told the Royal Commission into the Robodebt Scheme on Tuesday that she probably didn’t read one of Professor Carney’s adverse tribunal decisions that was explicitly sent to her for monitoring “because it was very long and legalistic”.

Emails between Bundy and a lawyer in her team, Damien Brazel, sent in late March 2017, show they understood the significance of the Carney decision because it involved the use of income averaging from the “manual” pilot stage of robo-debt, a domain they say they believed was not an issue.

“We need to escalate this ASAP,” Bundy wrote to Brazel on March 24, suggesting they should inform DHS deputy secretary Malisa Golightly.

The following day, a Saturday, at 8.35pm, Darren Zogopoulos, a manager in DHS, emailed about a “third set aside … decision” with a note of alarm.

“This one is very interesting,” he wrote. “I would be concerned of [sic] legal services didn’t contest this. If they don’t, it will open up Pandora’s Box.”

Not only did they not contest this or any other decision, however, but DHS lawyers met some of the decisions with institutional arrogance……

It is helpful to go through this time line in detail.

The sequence of events begins around January 11, 2017, when DSS officials – including former director of payment integrity and debt strategy Robert Hurman – became aware of the ombudsman’s investigation.

From this date, the fuse of bureaucratic panic was lit.

Within hours, Hurman had been sent the only written advice his department had ever sought about the legality of the scheme: the 2014 advice written by Simon Jordan and second-counselled by senior lawyer Anne Pulford, which was unequivocal in its statement that the fundamental basis of robo-debt was illegal.

What to do?

Greggery laid out the department’s blueprint for deception.

“I suggest to you there was a common understanding within DSS – from the time the ombudsman’s investigation was received – to go on the front foot and defend the scheme as being both lawful and accurate in raising debts,” he said to Hurman.

“There was a pattern of behaviour from the start by people within DSS, of which you were a part, and it was designed to establish the lawfulness of the scheme in the representations that it made to the ombudsman, irrespective of the true position.”

Hurman responded that they “were trying to show it in a positive light”, a description that rankled the senior counsel.

“Yes,” Greggery said, “but it’s a bit hard to put a positive light on something that you understood was being conducted unlawfully according to the advice that had been given in 2014.”

Hurman and colleagues commissioned a new set of legal advice from Pulford, the same lawyer who co-authored the 2014 advice, only this time the answer to ostensibly the same proposition was that income averaging could be used to raise a debt.

This “2017 advice” wasn’t delivered until later in January. Six days before it arrived, on January 18, DSS officials attended a walkthrough with DHS leadership about the robo-debt scheme. About the same time then ministers Alan Tudge and Christian Porter were making public statements asserting the lawfulness of the program.

Although Hurman was on leave for this January 18 walkthrough, he authored an email that stated DSS staff were “comfortable that the current process is lawful and clear”.

Greggery asked how this could have been so. The walkthrough happened after the 2014 advice had been recirculated, noting the scheme was unlawful, and before the new Pulford advice had been received.

“So how could you be satisfied, or how could you represent that senior department staff were comfortable that the current process was both lawful and clear,” Greggery pressed, “in circumstances where you had been given contrary advice?”

Initially, Hurman had believed the original advice should be withheld. After a tense back and forth between the policy and legal teams, a decision was made to send both to the ombudsman.

However, on February 23, Greggery said, Hurman learnt that only the 2017 advice had gone to the ombudsman. The legal opinion acknowledging the scheme was likely unlawful was not sent. Former branch manager Russell de Burgh, Hurman’s boss, accepts that the 2017 advice was the only document the department ever had that could be construed as suggesting the scheme was even remotely lawful…….

Read the full article here.

#NotMyDebt: "Treating Australians like crap is going to get you crap poll results"

The “false debt” disaster rolls on, with the Turnbull Government attempting some window dressing in the hope of reversing bad polling.

News.com.au, 16 January 2016:

AN Australian of the Year finalist has also become embroiled in the Centrelink debt recovery debacle, after being sent an incorrect debt notice due to the automatic debt recovery system.

Queensland medical researcher Dr Janet Hammill, who works voluntarily and lives off the age pension, was sent a debt notice for $7600, The Guardian reports.

The 76-year-old had reportedly received a $26,000 research over parts of 2011 and 2012, which she fully reported to Centrelink at the time.

But the system appears to have averaged the grant across 2012 and deemed her overpaid.

But Centrelink’s automated debt recovery system appears to have averaged the grant across all 26 fortnights of 2012, before deeming her to have been significantly overpaid.

Hammill said she had struggled to contact anyone at Centrelink.

“You feel so helpless, I mean for heaven’s sakes, you can look through my CV and see that I’m not helpless,” Hammill told The Guardian.

“But this puts you into another category of disempowerment. I can just imagine somebody who is not computer literate or is just managing to get by day to day, it’s just been so terribly frustrating,” she said.

“They made me feel as though I’m some sort of cheat, and I haven’t had an income since April 2012.”

Her story comes after whistleblowers revealed the “true horror” of the Centrelink debt recovery debacle, after a new poll showed the Turnbull Government took a hit over the ongoing saga.

A number of former Centrelink staff, who allegedly left over the debt recovery fallout, have written to independent MP Andrew Wilkie with reports that a high number of clients are suicidal over debt notices.

Other former workers have told of being given daily quotas of debt notices and being urged to work overtime and compete to haul in the most debts.

One single mother has told of having to start repaying an incorrect debt notice for $11,800 while she challenges the request.

Mr Wilkie has today written to the Commonwealth Ombudsman to report evidence from the whistleblowers, which he claims have described the “true horror” of what’s happening behind closed doors.

His letter, published on his website, outlines the insight of former staff members, including that employees are discouraged from questioning debts and from pausing debt repayments if customers are in financial hardship.

A “high” number of callers were contemplating taking their own lives, it said.

“The system’s a complete dud and must be fixed or binned,” Mr Wilkie said.

“Every day new cases of bogus debts are coming into my office which has received hundreds of complaints from people who have recounted deeply disturbing stories about Centrelink’s debt hunt.”

The Sydney Morning Herald, 16 January 2017:

Centrelink public servants who ask too many questions about their agency's controversial "robo-debt" recovery effort are being "managed" out of debt recovery units, according to independent MP Andrew Wilkie.

The Tasmanian independent also alleges public servants are being played against each other by managers, competing for the highest daily quota of debt notices.

But Centrelink is unhappy with Mr Wilkie's letter to Ombudsman Colin Neave, with the agency saying on Monday the the allegations are inaccurate or misleading. 

Centrelink says there are no quotas and that Mr Wilkie's accusations about the management of mental health issues among clients were overblown. 

Mr Wilkie said the former public servants had reported problems with suicidal clients and a breakdown in the systems that were supposed to support them.

"The number of customers who report feeling suicidal is high," Mr Wilkie wrote.

"It has been reported to me that that over a period of days there was an error in the system so that calls transferred to social workers were instead transferred back to casual workers on the general phone line that have no training in suicide prevention."

The Guardian, 16 January 2016:

Asked in the ReachTel poll how “errors with the Centrelink automated debt recovery system” affected their vote, 49.8% said it made them less likely to vote for the Coalition compared with 14.4% who said they were more likely to and 35.8% who said it would not impact their vote.

Asked which should be the Turnbull government’s priority, a large majority (82.2%) nominated cracking down on international tax avoidance, compared with recovering debts from Centrelink overpayments (17.8%).

Respondents were asked given the “significant errors” in the system whether individuals should have to “defend themselves which may include accessing pay slips and employment records from up to five years ago”.

Most said the burden of proof should be on Centrelink (78.6%) not the individual (21.4%).

The poll was taken on Thursday after a week of revelations of taxpayer funded travel claims by ministers and MPs to attend sports events and Sussan Ley’s trips to the Gold Coast including one on which she bought a $795,000 apartment and two to attend New Year’s Eve events with multimillionaire Coalition donor Sarina Russo.

The week culminated in Ley’s resignation as health minister on Friday.

GetUp’s campaigns director, Mark Connelly, said the poor poll result was “no surprise” given revelations government ministers had been spending taxpayer funds on chartered flights and to go to polo matches “while sending tens of thousands of false debt-threat letters to everyday Australians”.

“Treating Australians like crap is going to get you crap poll results.”

ABC News, 16 December 2016:

The automated program — which compares Centrelink and Australian Taxation Office records — has issued 170,000 notifications since July with thousands of Australians incorrectly told they have outstanding debts.

After weeks of public criticism, Human Services Minister Alan Tudge has told his department to ensure welfare recipients can launch an internal review of their payments before debt proceedings are launched.

Disability pensioner Justin Burns last week told the ABC he disputed his debt and requested a review, but was still being forced to pay $40 a fortnight from his pension to repay the debt while the review was underway.

"I have had to borrow money off my parents, I have had to borrow money off my friends," he said.

"I thought, 'Holy, you know what, I don't believe I owe this money at all'."

Mr Tudge will also ensure Centrelink clients are informed of discrepancies in their accounts before being contacted by debt collectors.

"One of the issues has been that on some occasions, the address that Centrelink has on file hasn't been updated, so the first a person might hear about this is when there is a debt collector on their doorstop," Mr Tudge told 2GB radio on Monday.

"We are fixing that problem by ensuring that we use multiple different addresses, including a person's electoral roll address, to ensure they do get that letter and do get that opportunity to update their records."

Letters will now be sent by registered mail so Centrelink can track whether they have been received.

In some cases, the letter will be followed up with a phone call.

One client told the ABC they were contacted by debt collector Dun and Bradsheet about a $3,836 discrepancy, despite never being contacted by Centrelink.

Mr Tudge has also called on his department to simplify its language and ensure a contact number is printed on all notification letters, rather than being listed online.

Labor's shadow human services minister Linda Burney said the changes were a "stunning admission" given Mr Tudge's earlier claim the system was working.

"The system must be suspended until changes to make it fair are applied to everyone — that means those currently paying disputed debts should have the review completed before they are forced to pay," she said.

Unfortunately for Mr. Turnbull on 17 January 2017 The Sydney Morning Herald also carried news of his government's intention to expand this flawed debt recovery scheme:

The Coalition government is going to target more than 3 million of elderly and disabled Australians with its controversial Centrelink "robo-debt" campaign, Parliamentary documents show.

The mid-year economic forecast tables published last week shows the government has booked savings of $1.1 billion from data-matching the aged pension and another $400 million from the disability support pension.

The move will bring more than 3 million more Australians into the sights of the data-matching program, which uses an automated system to match information held by Centrelink and the Australian Taxation Office and calculate overpayments.

But the policy has been beset by errors and has been hugely controversial with many of those targeted for debt recovery saying they are being hounded by commercial debt collectors for money that they do not owe…..

The data matching effort so far has been concentrated overwhelmingly on mostly young people who have received the dole or Youth Allowance, although evidence is emerging that students have also been hit heavily.

But the supporting tables to the government's mid-year financial and fiscal outlook, published on Thursday by the Parliamentary Budget office, reveal that Coalition policy is to massively extend the data matching effort to the more than 2.5 million age pensioners and about 800,000 disability support pensioners.

"Relative to the 2016-2017 budget, policy decisions are expected to decrease expenses on the age pension by $1.1 billion to 2019-2020 primarily due to measures to enhance the integrity of social welfare payments including expanding and extending data-matching activities with the Australian taxation office," the document reads.

The papers also reveal that the government believes it will slash spending on the disability support pension using the same methods.