Social Services secretary apologises for robo-debt

Kathryn Campbell said the department is now aware that averaging ATO income data to determine a debt was a 'flawed assumption'.

Secretary of the Department of Social Services Kathryn Campbell has told a Senate committee she regrets her part in the hurt and harm caused by the Centrelink Online Compliance Intervention (OCI) scheme, colloquially known as robo-debt.

In her opening statement to the Senate Community Affairs References Committee on Friday, Campbell pointed to Prime Minister Scott Morrison's lacklustre apology in June, adding a similar one to the record from the department.

"On the 11th of June 2020, the Prime Minister apologised for any hurt or harm in the way the government had dealt with debt recovery. He went on to focus on how government could best undertake debt recovery and in particular, apply the lessons learnt from the income compliance program," she said.

"The department and the agency also apologise for any hurt or harm and are focused on applying the lessons learned in the future."

Campbell, who was the secretary of the Department of Human Services from March 2011 through September 2017, was later asked by Senator Deborah O'Neill if she personally apologised for her part in the hurt and harm caused by the scheme when she was secretary.

"Of course I do Senator," she said. "Of course we would have not wanted to do this. We want to behave in a legal manner that supports Australians.

"It was my view when we introduced this that it was legal.

"Clearly I was wrong and as have previous organisations and governments for some years."

In 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 Centrelink scheme. The OCI program automatically compared the income declared to the Australian Taxation Office (ATO) against income declared to Centrelink, which resulted in debt notices, along with a 10% recovery fee, being issued whenever a disparity in government data was 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.

Centrelink's OCI program from 1 July 2016 through 31 August 2019 saw 1,159,662 assessments be initiated using the automated data-matching technique.

The federal government in November paused the automated data-matching element of robo-debt and in May, it admitted it got around 470,000 debts wrong.

The total value of refunds, including fees and charges, is estimated to be at AU$721 million.

Campbell said the OCI program was designed on the basis that averaging of ATO income data was sufficient to determine a debt when other information was not available, otherwise people did not engage with the then-Department of Human Services. 

"We now know that that was a flawed assumption," she said.

During the hearing, Campbell was shown a document made public under Australia's Freedom of Information Act 1982 that she claimed to not remember seeing previously.

The document, O'Neill explained, was a risk assessment on the automation elements of the OCI scheme, performed by the department's ICT arm. The document pertained to the potential risks involved with removing the human element from the data-matching program.

"We will take on notice what happened with this risk. I would note it is normal practice that risks are identified as you would expect as we roll out things … but reiterating the automation was not about changing the basis of the issue which is the income averaging," Campbell said.

Echoing much the same as she has said when providing previous testimony, Campbell said the legal insufficiency comes from using ATO averaging and that ATO averaging had been used for many years, pointing to examples from the 80s.

"I was the secretary at the time when we implemented this program. I was of the view that it was legally sufficient to use ATO averaging when other information was not available or the customer did not engage with the department," she said.

"So let me be really clear, we thought it was legal."

The committee was prevented from having a handful of questions answered by Services Australia representatives on Friday, as department minister, Stuart Robert, had presented the committee chair with a new public interest immunity (PII) claim.

Robert is claiming PII due to ongoing legal action, with a class action brought on by Gordon Legal against the Commonwealth of Australia that is scheduled to commence 21 September 2020.

Although the committee declined to accept the PII claim, which it has done with previous legal professional privilege claims made by Robert, Campbell referred to the claim when taking a handful of questions on notice. O'Neill again accused the department of covering up the details of robo-debt.

The senators did hear, however, that as of close of business on 30 July 2020, 145,000 people had been paid their refund, totalling AU$224 million.

MORE ON ROBO-DEBT