The report of a Senate inquiry has recommended that Centrelink pause its automated data-matching program designed to claw back welfare overpayments.
The system has been criticised both for its accuracy and the impact on welfare recipients. The report of the Senate’s Community Affairs Reference Committee, tabled last night, recommended that the so-called Online Compliance Intervention (OCI) “should be put on hold until all procedural fairness flaws are addressed” and a range of other recommendations implemented.
The committee’s report said that Between November 2016 and March 2017, at least 200,000 people received notices under the OCI relating to potential welfare overpayments.
Data-matching and debt collection for overpayments is not a new process, the report notes. However, the OCI has seen Centrelink outsource to individual welfare recipients the “process of checking the ATO lump sum income records against the department’s fortnightly income records, a time-consuming process previously undertaken by departmental personnel,” the report notes.
The committee said it was concerned that the department has “placed the onus on the individual to demonstrate that a purported debt does not exist”.
“The committee accepts that challenging these purported debts has taken considerable effort on behalf of those individuals,” the report states.
The letters sent to welfare recipients ask them to explain discrepancies between Australian Taxation Office data and income data self-reported by individuals to Centrelink. While the former has been based on annual income, the latter is based on fortnightly income.
“A key concern raised throughout this inquiry, has been that the data-matching process identifies income reporting discrepancies by comparing different sources of information, that is, a person’s annual total income amount provided by the ATO, with the total fortnightly income amounts a person declares to the department, which was how the department calculated the income support payment a person received,” the report notes.
Under previous manual data-matching processes, the committee found, about a quarter of discrepancies were resolved, with information provided to Centrelink confirming that a recipient had been received the correct payment.
A dissenting report by Coalition senators acknowledged that the initial rollout of the OCI "should have received more robust planning and consideration of the impact and operation of increasingly moving to digital engagement" but rejected the claim that the system lacks procedural fairness.