Services Australia reckons 'robo-debt' error rate sits at 1%

If the former DHS issues a debt notice, and the former welfare receiver fixes it, that is the system working, according to Services Australia.

Services Australia believes the error rate for its contentious robo-debt program sits at around 1%.

The assertion was made by Service Australia general manager of integrity modernisation Jason McNamara at a Senate Community Affairs Reference Committee hearing in Canberra on Thursday.

"As a general rule, we find the error rate relates to data entry because when someone rings up, and they require assistance and they are essentially giving us the information over the phone, sometimes we will do a data entry [error] -- we will transpose numbers et cetera -- and that tends to be our major error," he said.

"But we still think that error rate is under 1% in this program."

When pushed by senators on whether the issuing of letters to welfare recipients and having it corrected by them was an error, McNamara was unmoved.

"We'd say that is the system doing its job," he said.

"We are essentially auditing somebody based on some third party information, and if we audit you and we find you have been paid the right amount -- that's a fantastic outcome. That's what we'd prefer -- it shows you have been paid the right amount and that you haven't been overpaid."

Service Australia maintained that 80% of the time, a debt existed based on the data it handled.

"The department can only make a decision based on the information that it has, and that's why we ask. Our first approach is to the customer to see if they can assist us to explain the discrepancy," acting deputy secretary of the integrity and information group Annette Musolino said.

See also: Services Australia has six weeks to work out what exactly it's meant to do

Earlier in the day, it was revealed that Services Australia could seek out former employment records and bank statements if it wanted to, but had only done so in 1,000 instances. Senator Deborah O'Neill said people were struggling to retrieve documents from former employers, but Musolino refuted the idea.

"Well, there's no evidence of that. We help the people who contact us and tell us that they are in difficulty," she said.

"If people need help to gather more information, we are there to help."

Musolino also said the name "robo-debt" was a misnomer since there were people involved throughout the process.

"We do think it is a misnomer because it is a process that has a great deal of human involvement and it is staff involvement; it's staff who are trained to a very, very high level," the acting deputy secretary said.

"Not only in terms of dealing with the compliance work, but also in interacting with our customers, and the particular issues that are faced by our customers."

Musolino added that Service Australia staff provided "very committed, passionate service every day supporting Australians".

"For us, the human involvement is absolutely critical to making sure we are pursing integrity, which is really important, but also doing it in a way that suits the needs of our customer base."

Providing an update on the program, Services Australia general manager of debt and appeals division Anthony Seebach said robo-debt had contributed under 10% of all debt recovery that Centrelink has performed since it came into force. 

"If we just look at debt recovered for the life of the income compliance program ... we've recovered about AU$0.64 billion through the income compliance program," he said.

"At the same time, or over the same period, we've collected AU$6.73 billion in the broader debt recovery program."

For overall debt recovery, as of August 30, approximately 1.47 million outstanding social welfare debts were identified with a value of AU$4.89 billion, Seebach said.

"In the 2018-19 financial year, the department recovered AU$1.85 billion in social welfare debts, up from AU$1.7 billion in 2017-18," he said.

"For the period 1 July [2018] to 28 June [2019], approximately 2.27 million debts with a value of approximately AU$3.36 billion was raised in connection to social welfare payments, in that year."

Up until June 2018, the then-Department of Human Services (DHS), now Services Australia, had spent a total of AU$375 million on Centrelink's robo-debt system.

Figures provided by Services Australia to the committee show the program had also cost a further AU$231 million in 2018-19, taking the total to AU$606 million so far.

Read: Centrelink's new data-matching project targets Medicare fraud

Across the forward estimates to 2021-22, robo-debt is set to cost a further AU$573 million, involve a further 1.6 million debt reviews, and is expected to recover a total of AU$1.07 billion in "underlying cash", which the department said would produce AU$2.1 billion in total fiscal savings.

The Office of the Commonwealth Ombudsman, who was also in attendance for the inquiry, said that it currently receives approximately 100 complaints about the program a month, having received 170 complains in July, and 153 in August.

Last month, former Labor leader and now Shadow Minister for Government Services Bill Shorten announced a class action against robo-debt.

Shorten said at the time that the program -- including its reverse onus of proof -- was at best "legally dubious" and should rightly have its legality determined by a court.

"Other legal actions by robo-debt victims have invariably resulted in the government entirely waiving or dramatically reducing the claimed debt, and settling the action. But the individual nature of the actions has meant the legality of robo-debt generally has not been tested," he said.

Earlier in September, Shorten called the federal government out for knowing that the project is illegal.

He also previously labelled robo-debt "harsh and inaccurate", likening the scheme to having the same essential logic and ethics of a mob standover.

DHS kicked off the automation of issuing debt notices during the 2015-16 fiscal year.

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% recovery fee -- subsequently 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.

"Robo-debt has already caused a trail of human suffering around this country -- persecuted retirees, stressed out students, parents being chased for alleged debts of their dead children, a mother who attributes her son's suicide to him being targeted by robo-debt," Shorten said previously

"What is truly unconscionable is that Minister for Robo-debt Stuart Robert refuses to call off the robo-debt hounds while knowing it could be illegal and actively working to prevent it being found just that. In fact he is considering expanding the scheme to even more vulnerable categories of people."

Speaking on Thursday, McNamara said the department had been matching ATO data since the early 1990s.

"We've been doing it for a significant period of time, the main difference ... is until the last few years, we haven't had the ability or the resources to do anything with the discrepancies other than in a very boutique way [for] 20,000 instances a year," he said.

"While we've been able to identify for a long period of time that people may not have been being paid correctly, we haven't had the resources -- before these series of measures -- to do anything with the information."

In July, Minister for Government Services Stuart Robert said the data-matching regime was the government's legal responsibility.

"This government like all governments has a lawful responsibility to collect where citizens have mismatched what they said they'd earn versus what, through their tax return, they've been shown to earn," he said.

"Can I say to all citizens who are receiving income support, or indeed family assistance payments regularly, update through either the myGov application, through a telephone service, or through a service centre, update the assessment of your income because when your tax return is returned, they will be matched."

Robert in October was found to have spent 20 times more than other MPs on his home internet, clocking up more than AU$2,000 a month and blaming "connectivity issues" for the high costs.

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