Centrelink’s Robo-Debt Scheme Just Got Slammed… But It’s About To Get Even Bigger

A senate report just called it "a system so flawed it was set up to fail".


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Centrelink’s automated debt recovery scheme has been plagued with horrific scandals ever since the federal government rolled it out late last year, and now a new report has found that the system was so badly managed it was “set up to fail.”

There’s the fact the automated system was based on poorly-matched data from the Australian Taxation Office, resulting in some wildly incorrect debts. The fact it shifted the burden of proof onto some of our most vulnerable people, welfare recipients, who were forced to demonstrate that they didn’t owe the new amounts (or just pay the false debt). And then there’s the fact that some, in the most tragic cases, were ultimately compelled to suicide.

While Centrelink was clearly not equipped to handle the massively complex caseload nor the increased reports of distress Human Services Minister Alan Tudge had remained largely unrepentant, infamously claiming the “system is working” well after #notmydebt had gone viral. He later inflamed the situation by leaking personal information about a claimant to journalists. The resulting furore forced a new privacy code, the Centrelink Twitter account to direct people to Lifeline, and a promise from the government to tighten — but not actually end — the system.

Now, a Senate inquiry has delivered an absolutely damning report into the scheme, less than a fortnight before the government’s plans to expand the system to focus on pensioners.

“A System So Flawed It Was Set Up To Fail”

In a report released last night, the Labor and Greens-dominated Senate committee called for the scheme to be suspended until it reconciles “a fundamental lack of procedural fairness“. Among their 21 subsequent recommendations is a call for all debts under the income averaging process to be reassessed, an overhaul of privacy policy, and a redesign of the system with a proper risk assessment process.

The chair of the inquiry, Greens senator Rachel Siewert, stressed a need for human oversight in the data-matching process, and said that the evidence presented to the committee, including more than 150 submissions and 1,400 emails “was compelling, consistent, and showed a program that was putting huge pressure on some of the most vulnerable members of our community”.

“Procedural fairness is lacking in every stage of the robo-debt program,” Siewert said. “Whether it be the forcing of people to reach back through their paperwork from six years ago, sending debt letters to the wrong address and/or not engaging with concerned recipients, or averaging out of income data, often producing incorrect results.”

So What’s The Government Going To Do?

Coalition senators have offered a mixed response via a dissenting report, acknowledging that the program required more robust planning during the initial rollout but rejecting the inquiry’s central claim that the robo-debt system reversed the burden of proof onto recipients or “lacked procedural fairness”.

“Coalition Senators reject the view in the Chair’s report that the Department of Human Services (DHS) has reversed the burden of proof onto recipients,” the report reads. “The DHS Secretary stated: ‘How we assess income and calculate debts has not changed. The data matching process identifies differences, which we ask people to check. No debt is raised until we have attempted to contact a person and give them the opportunity to explain differences. Initial letters are not debt letters.’.”

While this is standard practice for the Coalition, which has taken an ‘everyone is just interpreting our terrifying letters wrong!’ response for months now, their report conveniently ignores the amount of work required to disprove false claims and the fact that some people simply paid false debts; both of which would outwardly suggest a reversal of the burden of proof.

Additionally, Coalition senators bizarrely claimed that “the input from some third parties, such as #notmydebt… were aiming solely at scoring political points and inflaming the situation rather than offering practical assistance in resolving the issues raised”.

They appear to be confusing #notmydebt — a hashtag used to collate personal stories of false debts — with some kind of political institution akin to, maybe, the Labor Party?

Robo-Debt Is About To Be Expanded

With the Coalition rejecting the Senate committee’s report, the debt-recovery scheme is still in effect and even on track to expand to pensioners from July 1.

Just as they’ve focused on the past six years of welfare claimant history, the Department of Human Services will start trawling through six years worth of ATO data for inconsistencies amongst age and disability pension payments, with a focus on undeclared income from rental property, dividends and other assets and investments.

And while the Coalition has adopted some changes to how it investigates alleged fraud, such as no longer requiring recipients immediately pay back debts even while disputing them (so kind!), it is still striking how keen they are to continue rolling out a clearly damaging scheme.