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Broken Centrelink system sending false debt notices to sick

9 January 2017
Emma Reynolds
Sunshine Coast Daily

James Keygan describes himself as "a man in a box".

The 47-year-old Tasmanian has schizophrenia and obsessive compulsive disorder (OCD) so severe he sometimes struggles to even walk down the street.

He manages to hold down a supported work placement cleaning and gardening, but also relies on his disability pension.

So when Centrelink told him just before Christmas he owed $7000, plus $600 in interest and fees, he went into meltdown.


His 36-year-old ex called up and discovered the Centrelink system appeared to believe James had two separate employers, when in fact it was the same one, listed under a different name by the Australian Taxation Office.

This glitch is one of several that have caused inaccurate debt letters demanding thousands of dollars to be sent to vulnerable Australians by the benefit program's automated system.

The information watchdog is set to investigate complaints welfare recipients have been wrongly hounded over debts because of faults with Centrelink's data matching system.

Claimants say the system has also been going back and averaging out their annual income over every fortnight of a year, failing to recognise that they were not working for some months of that year and therefore entitled to unemployment benefits.

In many cases, it has old addresses for users, so they have no idea about the supposed debt until it is too late, and private debt collection agencies used by Centrelink have already taken the reins.


They say the agency's phone lines are clogged, queues at branches are huge and staff members are often unable to help - as in Linda Steven's case.

The NSW pensioner, who has a heart condition, was told to start paying back a non-existent debt of $8500 until her review is complete, a process that could take months.

Catherine Hehir, from Brisbane, told news.com.au she was also told to start a payment plan before her review was complete to avoid being taken to a debt collector - but unlike Linda, she refused. The 27-year-old spent a month chasing up employers from five years ago and trying to sort out the issue online and by phone.

"I couldn't imagine any pensioner, person with a disability or illness trying to manoeuvre this system," she said.
Indeed, 36-year-old Colleen McCormack, a healthcare worker from Melbourne who has had multiple surgeries and suffers with mental health issues, told news.com.au her "first thought was suicide".