Associated Incidents
The head of the Department of Human Services has blamed the “robo debt” scandal largely on welfare recipients’ failure to engage with Centrelink.
The Senate inquiry into Centrelink’s “robo-debt” system began on Wednesday, hearing from the community sector, the community and public sector union, tax office officials and the secretary of the Department of Human Services, Kathryn Campbell.
Critics of the system say its many flaws have combined to create a debt recovery process that is unfair, inaccurate and inhumane.
The inquiry heard that the system has only recovered $24m so far, although it has raised, or identified, $300m. It sent 217,403 letters between July and December demanding explanations from welfare recipients, 36,305 of which did not result in a debt.
The system raised 133,282 debts, 12,733 of which were either reduced to zero, reduced, or written off or waived.
The system, which began last year, places a greater reliance on data matching to detect discrepancies between income reported to Centrelink and the Australian Taxation Office.
It removes human oversight over that data-matching process and allows it to automatically generate letters demanding an explanation from welfare recipients.
If no response is received, the debt is automatically imposed, often using a crude calculation that averages an individual’s annual income over Centrelink’s 26 fortnightly reporting periods. More than 6,500 of the initial letters were sent to wrong addresses.
Centrelink was relying on addresses it held on its own records, not the electoral roll, to target people who had stopped receiving benefits years ago.
Campbell blamed the problems with the system on a failure of welfare recipients to engage with those letters or other communications from the department.
“I think what we underestimated was how many people would not clarify, and would not engage, and so I think if I was to sum up what the problem has been it is that, when we wrote those initial letters, that recipients and former recipients didn’t engage,” Campbell said.
“Now a small part of that, 6,600, was because they didn’t know anything about it. But there was a large proportion of people who didn’t engage with us through those initial letters.”
Campbell said a pilot of the program conducted early last year did not suggest that was likely to be a problem.
Centrelink, in changes announced last month, now uses registered post to ensure the letters are being received.
Campbell also said media reporting of the “robo debt” system in the lead-up to Christmas had caused distress to individuals and led them to believe they had been wrongly targeted.
Earlier, tax office officials said they were not approached by the Department of Human Services over the new system before it was launched.
The tax office asked the department whether it could help with the system in December, when problems began to publicly emerge, but was rebuffed. It later met with the department in February.
It sought to distance itself from the robo debt program, saying it only supplied the data to Centrelink and helped to match it.
The tax office’s deputy commissioner for debt, Robert Ravanello, said it was not the agency’s place to comment on how Centrelink then uses its data.
“We are required to provide the data, which we’ve done, how DHS uses that data and matches it and converts annual to fortnightly … I think is really better asked of DHS.”
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Earlier, the Australian Council of Social Service (Acoss) said it feared the system’s treatment of welfare recipients was scaring individuals away from exercising their right to claim income support.
Acoss described the system as an abuse of government power that was undermining confidence in public administration.
The director of the ACT Council of Social Service, Susan Helyar, said cynics believed that may have been the government’s intent.
“All of these things compromise the public’s confidence in systems, and some of our members have wondered whether partly what individuals are being encouraged to do is stay out of the welfare system,” Helyar said. “They are being discouraged from exercising their entitlements in the income support system by this poor public administration.
“Some people cynically suggest that might be the point of the process.”
“I just think it’s really dangerous for the government to implement programs in a way that is so flawed because it has long term impacts on the public’s confidence.”
Those comments were echoed by the chief executive of Acoss, Cassandra Goldie, who said public confidence in the social security system had been undermined.
Goldie said Centrelink should be creating an environment of support and help for the nation’s most vulnerable.
“It is really important to understand the power dynamic here,” Goldie said. “The Department of Human Services plays such a