​Commonwealth Ombudsman opens new 'robo-debt' investigation

After labelling the Centrelink data-matching project as unfair and unreasonable in April last year, the Commonwealth Ombudsman has agreed to investigate it again.
Written by Asha Barbaschow, Contributor

The Commonwealth Ombudsman will be opening another investigation into the Department of Human Services' (DHS) contentious data-matching process for welfare debt recovery.

After receiving additional information from independent member for Denison Andrew Wilkie, Ombudsman Michael Manthorpe said he has decided to investigate the Online Compliance Intervention (OCI) program, specifically in relation to the treatment of bank statement income information, the process for identifying duplicate employer entries, and the quality of information included in account payable notices.

The Centrelink data-matching program of work, which kicked off in mid-2016, saw the automatic issuing of debt notices to those in receipt of welfare payments.

The OCI program had automatically compared the income people declared to the Australian Taxation Office (ATO) against income declared to Centrelink, and the debt notice -- along with a 10 percent recovery fee -- was subsequently issued when a disparity in government data was detected.

One large error in the system dubbed "robo-debt" was that it was incorrectly calculating 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.

The investigation will be the second conducted by the Ombudsman, after he reported in April last year the letter sending process was "reasonable and appropriate", but the method used was "unfair and unreasonable".

"In our view, it is entirely reasonable and appropriate for DHS to ask customers to explain discrepancies following its data matching activities as a means of safeguarding welfare payment integrity," the Ombudsman said at the time.

Although calling the overall system acceptable, the Ombudsman said placing the onus on the customer to gather all required income proving evidence was unacceptable.

"In our view, this is not reasonable or fair in situations where customers have to collect evidence from several years ago, or where the customer does not have the capacity to obtain the evidence," the report continued.

In seeking another investigation, Wilkie said he provided Manthorpe with further information from a whistleblower and raised a number of concerns not previously investigated.

"The system is a serious failure of administration and proper process, and the federal government has so far been blind to criticism," the independent MP said on Wednesday.

"The fact is that the robo-debt system should have been shut down a long time ago. But instead the government has continued to let it loose on everyday Australians, saddling them with nonsensical and often incorrect debts sometimes in the tens of thousands of dollars.

"The fact that the Ombudsman has now seen fit to investigate the matter again is proof that the robo-debt program is deeply flawed and must be shut down and replaced with one that is timely, accurate, and fair."

Wilkie said he will ask for Manthorpe to shut down the robo-debt program "once and for all".

DHS in March told a Finance and Public Administration References Committee that its data-matching program went well because it produced savings, but this ignored claims from individuals the OCI system had caused them feelings of anxiety, fear, and humiliation, and dealing with the system had been an incredibly stressful period of their lives.

It was revealed earlier this month that one in three appeals over Centrelink debts have been set aside by the Administrative Appeals Tribunal (AAT).

Since the data-matching process for welfare debt began, the AAT has heard from 450 customers claiming error with their alleged debt. Of those 450 customers, 416 cases had been decided, with 265 of the appeals left unchanged, 10 classed as varied, and 141 set aside.

A DHS spokesperson told ZDNet that as part of a data-matching review, people are "given ample opportunity to explain their circumstances prior to determining whether there is a debt".

"Importantly, the opportunity for the person to provide information and seek a reassessment remains open," they said. "Where a debt is reassessed, it does not necessarily mean that the original decision was incorrect, as that decision was based on information available at the time."

According to the department, those that took their debt to the AAT were able to provide "fresh evidence", that is to say evidence that wasn't available to DHS, despite it still feeling appropriate to issue the debt notices.

In the federal government's 2018-19 Budget handed down last month, DHS was given further funding to extend the data-matching project.


Editorial standards