​Human Services admits waiving or writing off 17,072 'robo-debts'

The Department of Human Services (DHS) has confirmed that of the 281,613 Centrelink debts raised through its contentious data-matching project, 17, 072 have been waived or written-off.

DHS confirmed the statistics in response to Senate Estimates Questions on Notice, also noting that a permanent write-off may also occur in some cases where the recipient is deceased or has been declared bankrupt, not just where DHS got it wrong.

At the end of 2016, the department kicked off the data-matching program of work that saw the automatic issuing of debt notices to those in receipt of welfare payments through the country's Centrelink scheme.

The Online Compliance Intervention (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.

Tens of thousands of people were affected by the system.

It was revealed in early June that one in three initial appeals over Centrelink debts had been set aside by the Administrative Appeals Tribunal (AAT).

Of the initial 450 customers that submitted first appeals with the tribunal, 416 cases had been decided. 265 of the appeals were left unchanged, 10 had been classed as varied, and 141 were set aside.

Further expanding on the stats presented during Estimates, DHS revealed that for the period July 1, 2017 through May 31, 2018, there were 3,213 appeals to AAT that related to debt matters. Of these, 236 were robo-debt related.

During this period, 58 customers had lodged an appeal at the AAT2 level, with 51 customers having concluded appeals at that time: 38 were withdrawn after a settlement was reached between the department and the customer; 9 were varied by consent; 3 withdrawn; and 1 affirmed.

A DHS spokesperson previously 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.

"The legislation allows the department to settle debt claims where it is reasonable and expedient," DHS added in response to questions on notice.

According to DHS, as of May 31, 2018, 93,950 debts had been fully repaid, for an average amount of AU$856. Of that number, 90,694 of them were fully repaid without a formal review or appeal, and the department expects another 63,083 to be repaid.

571 appeals were requested directly to DHS, of which 517 were completed; while 3,750 formal reviews had been requested and 3,660 had been completed as of May 31, 2018.

32,828 debts have been settled for an amount less than originally raised, and 11,912 debts had been reduced to zero, the department said; as a result, the original value of the debts -- AU$102.4 million -- has been reduced to AU$26.8 million.

"When a debt is changed, reduced, or waived, it does not necessarily mean that the original decision was incorrect, as that decision was based on information available at the time," the department claimed. "People can provide additional information at any time and the department will reassess the debt."

The department stated that it has achieved AU$865 million in savings and recovered AU$279 million for data-matching activities; as of January 31, 2018, about AU$16 million of the savings was "prevented debt".

As of May 31, 2018, there were 136,701 debts with an external debt collection agency.

Where complaints are concerned, for the 2016-17 financial year, DHS received a total of 204,583 complaints: 168,709 for Centrelink; 16,151 for Medicare; and 19,723 for child support services.

For the 2017-18 financial year -- to May 31, 2018 -- 237,667 complaints had been received: 211,198 for Centrelink; 9,575 for Medicare; and 16,894 for child support.

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