The social services minister Christian Porter has refused to apologise for Centrelink’s automated debt recovery system, after a Senate inquiry found it had caused trauma, stress, and shame to Australia’s most vulnerable.
The report described the debt recovery system as “so flawed that it was set up to fail” and said it had “a fundamental lack of procedural fairness” at every stage.
“This lack of procedural fairness disempowered people, causing emotional trauma, stress and shame,” the report found.
But Porter said on Thursday the system was “not a matter for apology”.
The inquiry made 21 recommendations, including that all debts calculated using the often-inaccurate “income averaging” method be reassessed by humans.
That method divides a person’s annual income crudely by 26 fortnights to assume they have been working all year, and were therefore ineligible for welfare payments.
The inquiry also called for the government to review all cases in which a 10% debt recovery fee was automatically imposed. Welfare rights groups have previously warned that automatically slugging individuals with a 10% recovery fee may be unlawful.
It recommended that voluntary data-matching guidelines be adhered to, barriers to communication with vulnerable groups be resolved, and the new online portal for debt matters be redesigned.
More information should be provided to debtors on their rights and options, and funding for community legal centres should be reviewed to ensure they were able to assist affected individuals.
The inquiry also called for the Department of Human Services to be adequately resourced to implement the recommendations.
The lack of resourcing for the department has been a key concern of the Community and Public Sector Union.
The CPSU on Thursday urged the government to implement all the recommendations of the inquiry.
“This senate inquiry has confirmed what our hardworking members in Centrelink already knew all too well,” the CPSU’s national secretary Nadine Flood said.
The ombudsman’s report also found it was placing unreasonable and unfair demands on individuals, and had numerous deficiencies that could have been resolved by better project management.