​Centrelink investigation not opened by privacy commissioner

After speaking with the Department of Human Services and the Australian Ombudsman, Timothy Pilgrim said he has not opened an investigation into the issue-plagued Centrelink debt recovery system.

Australian Information and Privacy Commissioner Timothy Pilgrim has announced in a statement that his office has not opened an investigation into the Centrelink automated debt recovery system that has seen some letters demanding money repayment sent in error to welfare recipients.

Pilgrim said his office has been in contact with the Department of Human Services (DHS) as well as the Office of the Commonwealth Ombudsman, however no investigation into the matter has been opened as a result.

"My office works closely with DHS and other government agencies to ensure they understand their privacy obligations and adopt best practice when undertaking data-matching activities," Pilgrim said Friday.

"We also undertake assessments (formerly termed audits) of DHS' data-matching activities to ensure that the personal information collected through these processes continues to be managed in accordance with the Privacy Act 1988."

On Wednesday, Independent Member for Denison Andrew Wilkie called on the coalition to halt the "flawed" debt recovery process. Wilkie said he had also written to the Commonwealth Ombudsman after personally receiving over a hundred complaints from citizens who have recounted "deeply disturbing" stories about their experience with the Centrelink system.

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

Pilgrim said that his office will be finalising an ongoing assessment of the privacy aspects of DHS's Enhanced Welfare Payment Integrity -- non-employment income data-matching program this year, as well as conducting further assessments into the department's data-matching activities.

Speaking with the Guardian on Friday, Paul Shetler, former CEO of the federal government's now defunct Digital Transformation Office (DTO), said the error rate in Centrelink's data-matching process is so unfathomably high that it would send a commercial enterprise out of business.

"It is literally blame aversion, it is not risk aversion. They're trying to avoid the blame, and they're trying to cast it wide," Shetler told the Guardian.

"The justifications that have been given I think are just another example of the culture of 'good news', reporting only good news up through the bureaucracy.

"I'm sure that the bureaucracy was being told at every single level that everything was OK.

"That's how it works in the bureaucracy. Bad news is not welcomed, and when bad news comes, they try to shift the blame."

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."

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.

According to Shetler, a "radical" upgrade of IT skills within government is one of the many problems that needs to be addressed in the wake of the Centrelink debacle, which would need to start from the top levels of the public service.