Centrelink to Amend its Flawed Debt Recovery Process

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When Centrelink tweeted the Lifeline suicide helpline number in December, many began to realise the magnitude of the problems with the agency’s debt recovery initiative.

Social media posts painted a concerning picture of an understaffed, under-resourced agency that could not cope with the pressure of its campaign to quickly recover alleged debts.

At least 70,000 families and thousands of other Australians have been affected by the campaign, many shocked to discover they were being pursued for debts when they had done nothing wrong.

Large numbers of letters were wrongly issued due to system errors, or were otherwise sent despite no debt existing, and recipients say they’ve been made to feel like criminals – presumed guilty and having to prove their innocence to an unresponsive bureaucracy.

Now, in the wake of all the stress and heartache, the government has finally decided to make changes to the debt recovery process.

Daily debt quotas

Human Services Minister Alan Trudge has announced the changes amid fresh allegations that Centrelink workers have been given daily debt quotas to meet.

A Centrelink spokesperson denies that quotas exist, but admits staff are encouraged to deal with alleged debts as a matter of priority.

Minister Trudge says that while it is important to identify and pursue those who commit Centrelink fraud, the current debt recovery system has its problems.

Mr Trudge has foreshadowed the following changes:

  • Simplifying the language used in debt notices to making them “clearer and more intuitive”.
  • Adding Centrelink’s 1800 number to the letters to enabling those who receive a debt notice to easily contact the agency.
  • Sending letters to several different addresses, including addresses on the electoral roll, to ensure that due process is followed for those people whose contact information is out of date on the Centrelink system. It is hoped this will avoid the scenario where some people only find out about an alleged debt when a debt collector arrives at their doorstep.

Recipients will also be able to request an internal review before debt recovery begins, if they are able to establish they did not receive the first debt letter.

Driving desperate people to the brink

The system – which is reported to have pushed some to the brink of suicide – is also being reviewed by the Commonwealth Ombudsman.

The National Audit Office is also considering its own enquiry, and public opinion has weighed in, with new polls putting the government’s popularity at an all-time low.

Since the computer-run system was introduced in mid-2016, the government has hailed it as a huge triumph, saying it would recover $4 billion over 4 years.

But positive rhetoric does not necessarily equate to success, as demonstrated by last year’s online census fiasco, which was another nationwide IT project spearheaded by the Turnbull government that went horribly wrong. That initiative led to the government shutting down the system when there was a threat to its online security.

What to do if you’ve received a notice

Earlier this month, Centrelink apologised for the system errors, but that is small comfort to those who have endured significant stress due to no fault of their own.

Anyone with questions or concerns is urged to contact Centrelink to extend the payback deadline, so they can gather documentation and discuss the situation with Centrelink staff. However, it seems the onus is still placed on the recipient to establish they have done nothing wrong, rather than Centrelink going through adequate checks to ensure there is a high prospect of its accusations being accurate.

If the agency is unresponsive or unwilling to help, recipients can seek legal advice from a lawyer who can review any materials, receive information from the client and notify Centrelink of its error in writing.

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