Centrelink urged once again to halt robo-debt program

Centrelink bosses are again being urged to pause and recalibrate their widely criticised automated debt recovery program until apparent flaws in the system are ironed out.

A Senate inquiry into the so-called robo-debt saga has held its final hearing in Canberra on Thursday after sessions were held across the country over the past three months.

Labor Senator Murray Watt said the inquiry -- combined with media scrutiny and public pressure -- had driven improvements including waiving 10 percent debt recovery fees and allowing people more time to repay.

"Despite all of those adjustments having been made, there are still very deep flaws and very grave doubts about the validity of the system, and the government should put it on hold until it's sorted out," he said.

More than 200,000 people have been snared by the system and at least one in five debt notices have been wrong.

Centrelink has so far used the automated system to examine people's wages declared to the tax office.

From July 1, the welfare agency intends to expand the program to examine a range of incomes including interest on bank accounts, investment properties, share dividends, and rental incomes.

"It's very likely the main people who will be caught up in this expansion of the system will be old age pensioners," Senator Watt said.

"No one has been able to convince this inquiry the system has been running so smoothly that we aren't going to see a whole bunch of new problems emerge on July 1."

The Department of Human Services told the committee the new measures are expected to save AU$980 million over three years.

Speaking to the Senate Community Affairs References Committee on Thursday morning, Australian Information Commissioner Timothy Pilgrim said he would be looking into how the Department of Human Services had used income data as part of its Online Compliance Intervention (OCI) system.

Pilgrim will also conduct an assessment in the first quarter of the 2017-18 fiscal year to examine how DHS will integrate the non-employment income data-matching measure program into OCI.

"Recent community concerns around the PAYG data matching program and the OCI system suggest it may be time to revisit whether the existing data matching guidelines remain an appropriate regulatory framework that reflect contemporary privacy concerns and data usage," Pilgrim said.

Last month, the Commonwealth Ombudsman said the letters sent by OCI demanding money from Centrelink recipients were "reasonable and appropriate", but deemed the method used as "unfair and unreasonable".

Pilgrim said following a spate of privacy issues among the Australian public service, his office would look to develop a Privacy Code for government agencies.

"I believe that if this is not done, there is a risk that the community may lose trust in the ability of government to deliver on key projects which involve the use of personal information," he said.

Later in Thursday's hearing, Anglicare Australia was among several community groups appearing that detailed the human impact the debt recovery program has had on vulnerable Australians.

The group spoke of the confusion, stress, sense of powerlessness, and financial hardship caused by the debt notices and forced repayments. Anglicare said that while the human services department may save money by automating its services, costs are being worn by the people affected and the community organisations that support them.

Senator Watt said deep staff cuts at the Department of Human Services have stripped away a level of human oversight of Centrelink debt recovery.

"I wouldn't be at all surprised if we make some recommendations that a level of human oversight should return to this system," he said.

The Senate inquiry is expected to report next month.

The government said in December that it expected to recoup AU$4 billion thanks to the automated checks in OCI that compared declared incomes to the Australian Taxation Office with that declared to Centrelink. Upon detection of a disparity, the system automatically issued a debt notice with an added 10 percent recovery fee.

However, the system contained a large error where Centrelink was calculating a recipient's fortnightly pay by dividing their annual salary by 26, rather than totaling the income earned over the 26 fortnights in a year.

Last month, the Australian Privacy Foundation recommended that DHS reform its automated debt recovery process and bring back human involvement.

The foundation said that due to IT systems often failing, it recommended all automatic data matching performed by DHS be checked manually to ensure there is a reasonable basis for any claim based on the data.

"The current robo-debt process is procedurally unfair. It demands evidence from the Centrelink recipient to prove that a debt is 'not' owed. The individual needs to prove a negative," it wrote.

"These problems can only be fixed with a complete revision of the current data matching process with a focus on ensuring the alleged debt has been verified based on a check of evidence held."

With AAP