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Centrelink debt scandal: report reveals multiple failures in welfare system

10 April 2017
Helen Davidson

An ombudsman’s report on the roll out of Centrelink’s automated debt recovery service has identified multiple failures that placed unreasonable burdens on welfare recipients and staff.

The self-initiated investigation was announced in January after months of complaints that the problem-riddled system was sending incorrect debt notices to people.

“The [Online Compliance Intervention] project effectively shifted complex fact finding and data entry functions from the department to the individual and its success relied on its usability,” said the report by acting commonwealth ombudsman, Richard Glenn.


The ombudsman acknowledged improvements already made by the department but said there was more needed.

The report identified key issues including:

  • The accuracy of debts raised, in particular those that were calculated using “averaged” income data.
  • The 10% recovery fee.
  • The transparency and usability of the OCI system.
  • The problems faced by customers when gathering evidence and presenting their case.
  • The adequacy of the department’s assistance and communication with customers.
  • The adequacy of staff training and communication to support customers using the system.
  • The department’s approach to complaints.
  • The adequacy of the department’s project planning and governance mechanisms.

Among its findings, the report said the department’s initial letters to welfare recipients were “unclear and deficient in many respects” and left out crucial information, including that their income would be averaged out if they didn’t enter it each fortnight.

The letters were also missing contact numbers for the compliance team, which led people to call the general line and face long wait times and unprepared staff who often did not know how the system worked.

The 21-day timeframe to respond to the initial letter was also not reasonable or fair in all circumstances.


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.