Government rejects call to suspend Centrelink ‘robo-debt’ system

Doesn’t accept recommendations of Senate inquiry

The federal government has rejected a central recommendation of a parliamentary inquiry that scrutinised an automated data-matching program intended to recover purported overpayments of welfare benefits.

The Senate’s Community Affairs Reference Committee in June recommended that the so-called ‘robo-debt’ program be put on hold.

Centrelink’s ‘Online Compliance Intervention’ (OCI) involved using an automated system to send letters — at least 200,000 between November 2016 and March 2017 — alerting individuals to an apparent discrepancy between Australian Taxation Office (ATO) income data and income reported to the welfare agency.

The recipients of the letters were warned that they would have to explain the discrepancy or pay back the difference.

The OCI algorithm took annual income data from the ATO and treated it as though it had been earned at an even pace across the year — so even if an individual had reported his or her income to Centrelink accurately, they could still receive a letter as part of the program.

“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 inquiry’s report noted.

The OCI put the onus on individual welfare recipients to prove that they had not been overpaid.

The reported noted that the inquiry had “repeatedly heard from individuals that the OCI system had caused them feelings of anxiety, fear and humiliation and dealing with the system had been an incredibly stressful period of their lives”.

“Individuals had spent hours finding the required pay slips and bank statements, some dating back to 2010-11, often for Centrelink to find that no debt was owed,” the report stated.

The government yesterday released its response to the inquiry, arguing that there is “no evidence to support the recommendation to put on hold the online system”.

The government noted that the Department of Human Services had made a number of changes to the OCI following a report (PDF) released in April by the Commonwealth Ombudsman.

“The Government along with the Commonwealth Ombudsman acknowledge that communication issues with the initial rollout of the online system gave rise to potential confusion on the part of some recipients,” the response stated.

Several changes “have subsequently been made to improve the initial contact letters and messages within the online system”.

The DHS is writing to recipients with a debt related to the OCI to remind them of their review rights, the government said.

The department has also been attempting to call recipients who had an overpayment referred to debt collectors to let them know how they can ask for a review.

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More about Australian Taxation OfficeCentrelinkCommonwealth OmbudsmanDepartment of Human Services

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