The Department of Human Services is an “agency in crisis” and its highly controversial robo-debt collection system has created a “climate of fear” in Australia, a Senate inquiry has heard.
The first day of the inquiry into Centrelink’s automated debt collection system saw the Australian Council of Social Service, the Community and Public Sector Union, the Australian Taxation Office and the DHS itself present evidence.
The inquiry is investigating Centrelink’s robo-debt program, which cross-checks ATO data with information provided to Centrelink by welfare recipients and automatically sends out a letter when a discrepancy is identified.
An estimated 20,000 letters have been sent out weekly since September last year, with about 20 per cent of these being about non-existent debt.
The inquiry heard that the DHS blames the system’s issues on welfare recipients, that it is only recovered $24 million so far, and that the ATO wishes to be excluded from the narrative entirely.
CPSU secretary Nadine Flood began the inquiry by claiming that the DHS is in “crisis”.
“It is not an exaggeration to say that the Department of Human Services is an agency in crisis, and it’s not something I say lightly,” Ms Flood said.
Ms Flood also said that the use of this automated tech system has created a “climate of fear” amongst Australians.
“What this system has done is create a climate where people have been frightened, indeed people have been bullied, into complying,” she said.
“The impact of this robo-debt system has been to cause extensive distress and suffering right across the community with thousands of people affected.”
DHS representatives focused much of their attention of semantics, arguing with Senators over the use of “debt letters” and the word “inaccurate”.
According to DHS Secretary Kathryn Campbell, the first letter sent out by the automated system is an initiating letter rather than a debt letter, and even if there is actually no debt at all, the onus is on the recipient to correct this, meaning the letter is not “inaccurate”.
“The initial letter is a request to clarify when there are two different data sets. Now often I hear it talked as a debt notice and I just want to be very clear that is not our interpretation. It is a request to do it,” Ms Campbell told the inquiry.
Following from Social Services Minister Alan Tudge’s continual refusal to admit there’s an issue with the system, Ms Campbell said the Department also does not believe it should be suspended.
“The view of the Department is there are a number of refinements that needed to be made. Those refinements are being made and the systems should be continued,” she said.
These minor changes included extending the time to contest a debt by a week, sending out initiating letters by registered post and pausing debt repayments while a review is underway.
Instead, the only issue with the system that has dished up false and miscalculated debt to thousands of Australians is that the DHS didn’t anticipate how many welfare recipients would not respond to the initial letter, Ms Campbell said.
“I think what we underestimated was how many people would not clarify, and would not engage. I think if I was to sum up what the problem has been it is that when we wrote those initial letters recipients and former recipients didn’t engage,” she said
But ACOSS says these changes are not enough and is calling on the system to be completely shut down and for a new team to work on how technology can be better used in this process.
“We urge the minister to shut it down and bring together people with deep experience to look at the way data matching can be used to better interact with people,” Ms Goldie said.
“The minor changes announced by the minister do not address the fundamental problems and serious concerns expressed by us and a broad range of stakeholders.”
In the first half of this financial year, the robo-debt program “raised” $300 million in debt, meaning this amount was identified but not yet paid back. About $24 million has actually been repaid by welfare recipients, with the DHS saying this discrepancy is due to long repayment plans offered to those owing money.
The program has a total budget goal of $1.2 billion.
Shadow Minister for Human Services Linda Burney said that the DHS’ appearance before the committee failed to address the “litany of failures” of the robo-debt process.
“On the first day of the inquiry the credibility of Mr Tudge’s claims has been shredded,” Ms Burney said.
“It will only get worse from here. It is time for Mr Tudge to actually do something to fix his broken system. The administration of the robo-debt system has been a disaster. Enough is enough.”
Representatives from the ATO appeared at the inquiry earlier in the day and tried to downplay the agency’s involvement in the fiasco.
ATO Deputy Commissioner Greg Williams said the ATO’s sole role is to provide payment summaries, income tax details and investment income to Centrelink.
“We are involved in identity matching and the provision of data, but we are not involved in the data-matching that occurs on the DSS/DHS side. We are trying to maintain the level of integrity in the role of the ATO in this exercise,” Mr Williams said.
The inquiry also heard that the automated debt collection and data cross-checking system was trialled in July and August last year and none of the issues the inquiry is now investigating were identified then.
“It tested the system very well. There were a couple of ideas that came out of the pilot that have been progressively tested. The pilot was actually very encouraging. The results were identified as things we needed to improve and those things were implemented,” DHS deputy secretary Malisa Golightly said.
But both ACOSS and the CPSU again called for it to be suspended and for the “human element” to return to debt collection.
“There must be human involvement in the detection and calculation of debts,” Ms Goldie said.
“Without this step, many people will be paying back debts they do not owe, or paying a debt higher than what they owe. We need the right checks and balances in place.”
Ms Goldie said ACOSS was not consulted about the implementation of the robo-debt program.
“We said if we see aggressive debt collection we would see this level of distress. We were not consulted about this or any discussions about the debt-recovery design,” she said.