DHS reckons the customer is at the centre of new and improved robo-debt program

And all work to 'fix' the problem of robo-debt pre-dates legal action, the department said.

The Department of Human Services (DHS) cum Services Australia is holding firm that it has a duty to claw back the money it believes welfare recipients have received in error through the country's welfare scheme.

The federal government has frozen debt recovery and ceased the practice of using income averaging as the sole basis of determining a debt, and as Services Australia deputy secretary of integrity and information Ros Baxter detailed in between dodging questioning on Monday, the department has thrown a new approach at the problem it created.

Facing the Senate Community Affairs References Committee and its inquiry into Centrelink`s compliance program, colloquially known as robo-debt, Baxter said the program has been improved since it kicked off in 2016.

In addition, she said the program's online system has been "significantly improved", the system in its current state has been "built using human-centred design principles to improve the customer experience and make it easy to use", and communication to customers from the department has also improved. It also involves a very robust QA process, she said.

Since the government announced on November 19 it was pausing certain elements of the contentious program, Baxter said the department has started on the "next iteration". It will involve all debts raised under the OCI system, but she doesn't know how many individuals that includes.

She also couldn't answer what the next iteration will actually involve.

"It was reasonable for government to review our processes in delivering the income compliance program," she said, pointing to discussions Services Australia has had with third parties such as non-government organisations and evidence provided through public hearings.

"The refinements will improve the customer experience and make the program more robust by requiring additional information when using data to calculate potential overpayments.

"As we make these changes, we're committed to ensuring that the customer is at the centre of the design and implementation of them."

Income compliance activities are not ceasing, but the next "phase" of the debt recovery program of work will see the department manually look at all online income compliance reviews to "identify and prioritise those cases where income averaging was used to determine a debt".

"The process we've developed to do that is robust and it contains quality checks to ensure we identify all of those who are affected. Compliance staff are manually analysing individual customer records to identify those customers who are in scope," Baxter said.

"As we identify cases where income averaging was solely used to determine debts, the department will freeze collection of outstanding debts."

She said DHS has "started the process of starting the process" as it wanted to make sure it had a "robust process to follow". There are approximately 750 staff put on the task that is yet to be defined.

Baxter expects the number of welfare recipients to be affected by the new process will be determined by early next year. This means individuals affected will need to get through the holiday period before knowing if their debt still stands.

"Preparing that business process, testing that business process … training people on that business process … are the steps that we've been taking," she said.

She couldn't answer questioning on how it was determined that 750 staff would be pulled off normal duties to address the next "cohort".

"This has been done in a very deliberate way to ensure we've got the process right," she said instead.

"What we are doing is a count, an identification of the cases where income averaging has been involved.

"Identifying the cohort really matters because it actually affects the size and shape of what are the options that are available to us, at the same time we're working through what some of those options might be and obviously the size of the cohort and the individual's circumstances will affect the timing … and the cost."

As they are identified, debt recovery is frozen, Baxter said. She couldn't say how many people have had their debt recovery frozen, either.

Baxter was asked if the decision to update its process was in response to legal matters being pursued by those incorrectly issued a debt.

She was also asked if robo-debt was suspended after the department double checked and found that it did need a section in the in relevant Acts to use income-matching and the practical reverse onus of proof.

"What we are doing here is we have been through an iterative process of working through the program. There have been three iterations of the program to date, we've continued to work with customers, staff, third-parties, ombudsman office, we've listened to evidence before this inquiry … the work that we've done to date has very much focused on how do we improve engagement with our customers … the change we've made to the program is in response to that ongoing program of iteration, listening, working with customers, working with staff … rather than in response to a particular legal matter," she said in response.

The department will be sending letters to those identified as being in this next cohort.

Despite the wording of the initial letter sent to welfare recipients receiving much attention in the past, Baxter said it's important the letter reflects accurate information.

Baxter rejected the importance of an apology from the Australian government and although the letter is not yet drafted, it will not contain the word "sorry".

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