Australian independent calls on Ombudsman to weigh in on Centrelink debacle

Independent Member for Denison Andrew Wilkie has written to the Commonwealth Ombudsman, asking for an investigation into the Centrelink automated debt recovery system that has seen some letters demanding money repayment sent in error to welfare recipients.

On Wednesday, the Australian politician called on the coalition to halt the "flawed" debt recovery process, noting he has personally received over a hundred complaints from citizens who have recounted "deeply disturbing" stories about their experience.

"The government has terrified countless people, ruined the Christmases of many, and even driven some people to contemplate taking their own lives," Wilkie said in a statement.

"I'm appalled by all this, appalled that the government has been aware of the problem for many weeks and taken no action, and appalled that the minister is claiming that there are no problems," he added.

On Tuesday, Minister for Social Services Christian Porter defended the automated debt recovery process, claiming on ABC RN Breakfast the system was "actually working incredibly well".

Porter stated that of the 169,000 letters sent out to welfare recipients in Australia since the start of the financial year, only 276 complaints have been received by Centrelink -- a complaint rate running at 0.16 percent.

"We expect everyone who receives the letter to come back with the required information. The complaints have been very low about the process," Porter said. "People might find that at times inconvenient, but the absolute basic part of a system that requires the person that receives taxpayer funded welfare give us information -- it's an ongoing requirement."

Wilkie joins Shadow Minister for Human Services Linda Burney, who has been calling for the pause of the debt recovery system until it is "fixed".

"The minister should have personally intervened and put a stop to this program as soon as these issues were discovered," Wilkie said. "But instead he is in the media claiming that the process is working fine when it obviously isn't."

"Moreover it's deeply misleading to claim that the program is a success because of the relatively low complaint rate, when this doesn't take into account the number of disputes or reviews that have been lodged."

The Department of Human Services (DHS) announced in December it had implemented the online compliance system in July and said that it was finding approximately AU$4.5 million that has gone awry each day. With this, the federal government hopes to improve the nation's Budget by AU$2.1 billion over the next four years.

The new system automatically compares the income people declare to the Australian Taxation Office (ATO) against income declared to Centrelink. When it detects a disparity, Centrelink automatically issues a debt notice and that debt comes with a 10 percent recovery fee.

One large error in the Centrelink system is that it was incorrectly calculating a recipient's income, basing a recipient's fortnightly pay on their annual salary rather than taking a cumulative 26-week snapshot of what an individual was paid.

Speaking with ABC on Tuesday, Michael Griffin, a filmmaker from Brisbane, said that in the space of 12 months he earned AU$26,000 in the nine months he worked, and claimed Newstart -- financial assistance provided by Centrelink while looking for employment -- for the three months he was jobless.

Griffin said that at the time he declared his earnings correctly, however the letter he received from Centrelink shows the system took his AU$26,000 and divided it over 12 months, showing incorrectly that he earned AU$1,000 a fortnight for the entire year.

"If a human being had actually looked at the form, they would have known instantly, but the problem is the government is using automatic data matching based on flawed algorithms and if a human being had looked at it for 10 seconds, they would have known it's false, but no human being saw it until I did," Griffin explained, noting that aside from the mention of a AU$26,000 figure, there was no other level of clarity or granularity in Centrelink's letter.

"This crude data-matching process is spitting out numerous incorrect debt notices," Wilkie added. "You don't have to be a genius to tell that taking someone's yearly income and dividing by 26 is not always going to produce accurate results if only because people's circumstances change."

Paul Shetler, former CEO of the federal government's now defunct Digital Transformation Office (DTO), commented on social media Tuesday night that the Centrelink issue is the "result of split between policy, design, and delivery in very deskilled public service".

"I'll have more to say about what must be done to fix this string of IT failure v soon," Shetler said in a tweet.