Australian government says no to shuttering Centrelink compliance after robo-debt inquiry

It also isn't interested in having an independent review launched into the policy, design, administration, and impact of Centrelink's compliance program.

The federal government has published its response to a report prepared by a committee looking into Centrelink's compliance program, the automation of which was colloquially known as robo-debt, supporting only "in-principle" one of the five recommendations that were made.

The Senate Community Affairs References Committee in its second interim report asked the government to completely terminate the program. The government said no.

"The government notes that the Australian community expects Services Australia to be responsible stewards of taxpayer funds and to ensure people are paid only what they are entitled to," it wrote in its reply [PDF].

"Compliance activity is essential to support community trust in the administration of the welfare system."

The government in November 2019 paused the automated data-matching element of robo-debt. In its report response, it said income compliance activity will continue, with the refinements announced at that time.

Another key recommendation made by the committee back in September was for an independent review to be immediately initiated into the policy, design, administration, and impact of Centrelink's compliance program, including the specific robo-debt elements.

The government does not support this recommendation, either, saying the Ombudsman has conducted multiple investigations into the program already.

"Noted" by the government are two recommendations, one requesting more staff be allocated to Centrelink compliance measures and the other that Services Australia immediately reviews its evidentiary responsibilities for raising overpayment debts in all of its compliance programs.

"Payment integrity activities will continue, with a strong focus on prevention of debt. Services Australia will continue to engage with customers, and third parties, to ensure they receive the correct payments. Services Australia will continue its approach to designing services and systems through direct engagement with recipients of services as well as consulting with a range of stakeholders and groups," it said in response to being asked to review its evidentiary responsibilities.

Meanwhile, "supported in-principle" is the recommendation that Services Australia ensures its communication strategy relating to the repayment of unlawfully-raised compliance debts takes into consideration the additional needs of and provides appropriate supports to its vulnerable customers.

The Department of Human Services, now Services Australia, in 2016 kicked off the data-matching program of work that saw the automatic issuing of debt notices to those in receipt of welfare payments through Centrelink. The Centrelink Online Compliance Intervention (OCI) program automatically compared the income declared to the ATO against income declared to Centrelink, which resulted in debt notices, along with a 10% recovery fee, being issued whenever a disparity in government data was detected.

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

Centrelink's OCI program from 1 July 2016 through 31 August 2019 saw 1,159,662 assessments be initiated using the automated data-matching technique.

The federal government in May admitted it got around 470,000 debts wrong and in November 2020 agreed to settle the class action brought on by Gordon Legal on behalf of five representative applicants and approximately 400,000 people who were included in the case as group members. 

The Commonwealth agreed to pay AU$112 million in compensation to all of the eligible individual group members, including legal costs. The Commonwealth is also repaying more than AU$720 million in debts that Gordon Legal said was collected from group members invalidly.

The Commonwealth has also agreed to drop claims for approximately AU$398 million in debts that Gordon Legal said it had invalidly asserted against group members of the class action.

Both the Australian Labor Party and the Australian Greens have called for Royal Commissions into robo-debt.

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