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Centrelink robo-debt fiasco an attack on the poor

11 January 2017
Pas Forgione
Green Left Weekly

It would surprise the federal Coalition government — that assumes we dislike welfare recipients as much as it does — that one of its biggest problems at the start of 2017 is the Centrelink debt fiasco.

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Did the government know its new “robo-debt” system would lead to these sorts of mistakes? You bet.

“If employment is for a part of a year only, averaging over 12 months will not result in a correct result if the customer should have received a full rate at other times of the year,” a Department of Human Services document noted.

Before July, Centrelink workers checked discrepancies, following up with letters and telephone calls to customers, asking them to discuss the discrepancy with them.

If the customer did not have payslips, Centrelink would write to the employer, asking them to provide information. Only once all evidence had been collected and a debt calculated would a debt notice be issued. No earlier. The system worked well, according to Centrelink workers.

Manual oversight has since been removed. The data-matching has been entirely automated.

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Much of the backlash against the government has not only been for its mistaken debt notices, but also for its heavy handed approach.

The initial letter is sent to MyGov, the online system used by Centrelink customers. MyGov has been widely criticised for being difficult to use and unreliable.

The government claims this is not a debt letter. But with a debt amount boldly displayed and payment options included underneath (BPAY, credit card, direct deposit transfer) it certainly looks an awful lot like one.

Disputing the debt is no easy matter. Centrelink call centre staff have reportedly been instructing individuals that unless a minimum repayment plan is entered into (15% of fortnightly income which for those on below poverty-line welfare payments is an alarmingly high amount), debt collectors will be activated (three companies won government contracts to pursue debtors). 

Outrageously, the onus of proof is not on Centrelink but on the individual. They are required to find payslips, often dating back five or six years, potentially many jobs ago, to prove they are not guilty of being overpaid.

Given this, it is no surprise that many recipients, feeling overwhelmed, have chosen not to contest debts that might have been incorrect and have started making repayments.