Pressure is escalating on the Turnbull government to suspend its $4 billion Centrelink debt recovery mission, as accusations pile up that Human Services wrongly targeted welfare claimants, or exaggerated the debts they owed, using inaccurate data.
A social media campaign #notmydebt is sharing stories of individual’s debt letters and the effect it has had on them.
One woman said she finally broke down while speaking to a third Centrelink employee after the agency incorrectly paid her the full-time benefit rate while she was a part-time student, despite her repeatedly advising them otherwise. She was wrongly told she owed $400.
The woman told the Centrelink employee that the debt – which he later admitted was an error – had compounded the pressure she was already under as a single mum with a number of health problems who had only recently plucked up the courage to divorce her abusive ex-husband.
She said the way she was treated by one Centrelink staff member was appalling. She said the employee was “spiteful” and did not show her compassion, leaving her feeling humiliated.
“At the end of the day he took something from me as a human being. He also acknowledged that Centrelink had erred and he suggested that if ever it were to happen again, perhaps I should spend the money!
“He suggested I appeal it but what more can I do? My health can’t handle any more of this. I am scared they’d nit-pick for something else to add to my debt. My heart goes out to all those who received outrageously high amounts. I hope you take them to the cleaners and put up the fight that I’m unable to.”
One man, who has Cushing Disease, said he “had a meltdown” after Centrelink told him he owed $5500. He said Centrelink overpaid him $440 in sickness benefits in 2013 but he forgot about it after he did not receive the promised Centrelink letter asking him to repay it. But the debt ended up morphing into a much larger amount.
He said: “This makes my flight fight response work at high level 24 hrs a day 7 days a week. Any amount of stress and my body shuts down and I become ill. The last 4 yrs have been hell.”
He later tried to report the inflated debt online but had terrible trouble trying to find out how he could give detailed, nuanced answers, instead being asked to respond yes or no to questions.
“I can understand Centrelink wanting to ensure people getting benefits are getting what they are supposed to,” he said. “Yes I am a taxpayer. But the way they are going about it is so wrong!!
“They think it’s ok to send out thousands of letters to people who have done the right thing. Yet here they are having panic attacks, chest pain and becoming physically ill when they receive such letters.”
One student said that Centrelink acted act like “a giant debt collection agency with no proper process or justice” after being asked to repay $1200 of Newstart allowance and charged a 10 per cent recovery fee.
The student said this figure was later reduced to 10 per cent of the original figure by the agency.
“I can barely breathe when I think about this. My time period to pay is up tomorrow. I asked them for proof before I pay and I have heard horror stories of debt collection agencies, people being asked to pay so much, people being told there will be a black mark on their credit. I am so terrified. It’s so stupid for me to be terrified but I can’t help it. I am a student, I can’t afford anything!”
Meanwhile, the Opposition and the Community and Public Sector Union (CPSU) have called on the government to shut down the process, which has been driven by matching ATO and Centrelink data, while its 20 per cent error rate is examined. About 170,000 letters have been issued since the beginning of the financial year based on auto-matched data from the ATO and Centrelink.
Commonwealth Ombudsman Colin Neave has pledged to investigate the matter.
A Commonwealth Ombudsman spokesperson said: “Commonwealth Ombudsman Colin Neave confirms he is aware of the concerns raised about the automated data matching system used by Centrelink. Mr Neave has commenced an own-motion investigation into the matter and is considering the issues on a systemic level. The Ombudsman conducts own-motions in private and accordingly, cannot comment on any specific details.”
The Ombudsman is responsible for investigating complaints about government officials, agencies and departments.
CPSU Assistant National Secretary Michael Tull called the scheme “an absolute nightmare” for thousands of innocent Centrelink customers and the agency’s staff, who he said were already overstretched and attempting to cope with the fallout.
“The serious problems with this debt recovery program are piling on even more pressure, and feeding more aggression from understandably frustrated customers,” Mr Tull said.
“We hold very serious concerns about Centrelink’s ability to cope in coming months. There’s a perfect storm of work, with this debt recovery scheme likely to be just part of the problem.
“This debt recovery scheme needs to be urgently suspended until the significant problems with it can be identified and fixed, and particularly with an even more heavy caseload coming for staff because of the pension cuts and as people need Centrelink’s support to commence their studies.”
He said union members working at Centrelink had told the union that “in almost every case the poor customer ends up owing nothing, or just a fraction of the debt claimed.”
“In at least one case an initial debt for $9,000 ended up being $90. That’s not a minor discrepancy but a clear sign of a failed system.”
He called on the government to make Centrelink’s casual staff permanent so that they could be fully used to deal with the “deluge” of work.