The Commonwealth Ombudsman has agreed to open a new investigation into Centrelink’s Online Compliance Intervention (OCI), better known as ‘robo-debt’.
The OCI is a government initiative to recover supposed welfare overpayments. As part of the OCI, hundreds of thousands of letters have been sent to current and former welfare recipients asking them to explain discrepancies between Australian Taxation Office (ATO) income data and income reported to Centrelink. If they were unable to explain the difference, then a debt would be raised against them.
The program was widely criticised for putting the onus on individuals to explain discrepancies in government data.
One of the key criticisms was that the OCI used annual income data from the ATO and assumed that the income was received at an even pace throughout the year — meaning many people received letters despite reporting their income accurately while receiving welfare payments. Recipients of the letters have in some case struggled to produce documents to prove the absence of a debt because of the time periods involved.
The new investigation is in response to a complaint by independent Tasmanian MP Andrew Wilkie. In a letter to the Ombudsman, Wilkie said that a whistleblower had raised a range of issues with the MP, including that people who provide pay slips instead of bank slips “may incur a higher debt because payslips provide a person’s gross income whereas bank statements provide net income”.
(Wilkie’s letter says that a person’s net income is not grossed up unless they earn more than $18,000.)
Another issue is that duplicate and triplicate debts can occur because of slightly different employer names (‘McDonalds’ as opposed to the official name of ‘McDonald’s Family Restaurants’), the letter states. That can lead to income being duplicated, Wilkie claimed. The only mechanism to address the problem is manual cross-checking, which is “only undertaken on an irregular basis,” he wrote.
“I am very satisfied that the Commonwealth Ombudsman has agreed to my request to conduct another investigation into Centrelink’s robo-debt program, in response to the concerns of a whistleblower that I made public recently,” Wilkie said in a statement.
“The system is a serious failure of administration and proper process, and the Federal Government has so far been blind to criticism.”
“The fact is that the robo-debt system should have been shut down a long time ago,” the MP said. “But instead the government has continued to let it loose on everyday Australians, saddling them with nonsensical and often incorrect debts sometimes in the tens of thousands of dollars.
“The fact that the Ombudsman has now seen fit to investigate the matter again is proof that the robo-debt program is deeply flawed and must be shut down and replaced with one that is timely, accurate and fair.”
A 2017 Ombudsman report criticised the OCI’s usability and transparency but concluded that the system “is capable of accurately calculating the debt”.
A robo-debt Senate inquiry called for the OCI to be suspended. The government rejected the idea of suspending the program arguing that there is “no evidence to support the recommendation to put on hold the online system”, noting that the Department of Human Services had made a number of changes following the Ombudsman’s report.
Those changes included altering the initial contact messages for recipients of so-called debt letters and attempting to ensure that people realise their right to have a purported debt reviewed.