Human Services has spent AU$375m on 'robo-debt'

AU$193 million was spent on the controversial data-matching project in 2017-18.

The Department of Human Services (DHS) has confirmed spending a total of AU$375 million on Centrelink's contentious data-matching project, up until June 2018.

The information was provided by the department in response to Questions on Notice asked during Senate Estimates in October, revealing that for all income data matching measures, DHS spent approximately AU$72 million in 2015-16, AU$110 million in 2016-17, and AU$193 million in 2017-18.

In 2016, DHS 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 automatically compares the income declared to the Australian Taxation Office (ATO) against income declared to Centrelink, resulting in debt notices -- along with a 10 percent recovery fee -- being issued when a disparity in government data is 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.

A department spokesperson, however, told ZDNet in October it was inaccurate to say the automated system that came to be known colloquially as "robo-debt" had incorrectly issued debt notices.

"It is inaccurate to say that the system automatically issued debt notices. Letters initiated at the commencement of a compliance review are not debt letters. To refer to them as debt letters is factually incorrect. The letter asks the customer to engage online or call the department to work through a discrepancy," the spokesperson said.

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

The department has now confirmed that it had paid debt collection agencies nearly AU$46 million.

For the 2015-16 financial year, AU$17.2 million was paid to Milton Graham -- formally Dun & Bradstreet, Recoveries Corporation, Probe Group, and Australian Receivables; AU$14.8 million in 2016-17; and AU$13.8 million was spent among the four firms.

AU$28.5 million was also allocated to DHS to work with the Department of Social Services to expand debt recovery, with Human Services confirming AU$22.804 million had been spent as at October 31, 2018.

Following claims by individuals that the OCI system had caused feelings of anxiety, fear, and humiliation, and that dealing with the system was an incredibly stressful period of their lives which resulted in alarming reports of suicide, DHS was asked for a breakdown of those that had taken their own life, including information on the age, gender, and debt size of individuals who were confronted by the OCI letter, and the type of payment they were receiving.

"The department is aware of claims that have been publicised in the media. Other than these publicised occurrences, the department does not have this information available," was all it wrote in response.

DHS, however, said it is no longer initiating compliance reviews -- calling individuals regarding debt related to payments -- for employment income information for the 2011-12 financial year.

Human Services, also in response to Questions on Notice earlier this month, disclosed wiping, or writing-off, 26,104 OCI debts since July 2016. Additionally, 14,621 debts have been reduced to zero.

In total, the department had initiated 925,728 assessments, and raised 409,572 debts from July 1, 2016, through to October 31, 2018. The average debt, the department said, was AU$2,184.

DHS noted, however, that one assessment can lead to multiple debts if the recipient has been the beneficiary of different types of income support payments.

Of the 5,139 formal reviews requested, 4,952 have been completed.

According to DHS, as at October 31, 2018, the outstanding Centrelink debt amounted to approximately AU$4.93 billion.

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