Centrelink Should Not Be Government ‘Weapon’ of Deficit Reduction

Vinnies has joined the chorus of welfare organisations demanding the government suspend the Centrelink debt recovery system, saying it should not be viewed as a “weapon” of deficit reduction.

The call follows Human Services Minister Alan Tudge’s comments on Wednesday that the system would be retained, despite hundreds of complaints from people alleging they have incorrectly received debt notifications.

He defended the debt recovery scheme, which seeks to recover $4 billion in budget savings and has generated 170,000 notices of potential overpayment since July.

“The system is working and we will continue with that system,” Tudge told the ABC.

“I’m not aware of individuals who are completely convinced that they don’t owe money but have been given a debt notice.”

Welfare organisations have criticised the process, which uses automated data matching to check records of people’s income, without staff involvement or oversight.

CEO of the St Vincent de Paul Society Dr John Falzon said the government’s response to the “debacle” was “extremely disappointing”.

“The government appears to be in deliberate denial about the effects of this debacle on people’s lives,” Falzon told Pro Bono News.

“But more to the point, the government doesn’t seem to understand that Centrelink is an agency that should be properly resourced so that people can be helped, rather than being used in this absolutely abominable manner of trying to take away from those who have the least in order to give the government an opportunity to avoid making sure that those who have the most pay their fair share.

“The government is viewing Centrelink as a weapon of deficit reduction, rather than as a means of helping people. This should never be the case.

“Centrelink is the means by which government can ensure that cash transfers can be made to people who are suffering the effects of inequality in prosperous Australia. It shouldn’t be used in this absolutely unconscionable manner of hounding people and intimidating people for money that, in fact, they don’t owe in the first place.”

Earlier this week the Commonwealth Ombudsman launched an independent investigation into the system.

Falzon said the scheme should be suspended while the flaws are investigated.

“Let’s see the government put an immediate hold to this scandalous process of deliberately hounding people and humiliating people and intimidating people,” he said.

“There should be a cessation of the letters being sent out, and those who have already received the letters should not need to have anything to worry about.

“And let’s be honest, if there has been some kind of error made by Centrelink through no fault of the social security benefit recipient, then why should that recipient, who is struggling… be placed in a situation where they are being hit over the head with an unmanageable debt.

“We need to think very carefully about the effects on people’s lives who’ve been told all of a sudden that they’ve got a debt that, in proportionate terms, is quite significant and they’re struggling to make ends meet from week to week as things are.”

On Wednesday the Australian Council of Social Service (ACOSS) also repeated its call for an immediate suspension of the debt recovery system.

“Centrelink has demonstrably failed in its duty of care to ensure accurate information is provided to recipients of income support and this failure is causing undue stress, anxiety and harm to some of our most vulnerable people,” acting ACOSS CEO Peter Davidson said.

“In December, we wrote to the minister calling for the immediate suspension of the debt recovery program because of the systemic problems with the data-matching system.

“The government has a duty of care towards people who call on it for support, especially those on low incomes. It has breached that duty of care with this debt recovery program, which is why the program must cease in its current form to prevent further harm.

“We are hugely concerned that people are paying back debts that they do not owe because it is too hard to prove that they do not owe it. Where people have issues with the online portal, many cannot get through to Centrelink on the phone and are not receiving the help they need at Centrelink offices.”

The Greens went further, calling for the system to be scrapped entirely and for the investigation to be referred to a Senate inquiry.   

“I’m pleased the Ombudsman will be reviewing this debacle but the Parliament needs to hear from the people affected by this flawed approach,” Greens community services spokesperson Senator Rachel Siewert said.

“When Parliament resumes I will work with Senate colleagues to initiate a Senate inquiry into the debacle. We need clear answers on how this program went so wrong and what the real implications are.”

Falzon said the system was also having an impact on charitable organisations, who were dealing with an increase in requests for assistance.  

“People are already struggling on a meagre income support payment and so organisations like Vinnies end up being the default means of providing the social security top up. This should end, surely we can do better as a nation,” he said.

“But then when someone is absolutely frightened because they’ve received a letter saying that they allegedly owe some proportionately enormous amount of money, then yes, they do come to organisations like ours.

“The government seems to be very insensitive to the fact that people are plunged more deeply into despair and fear when they receive letters like this. And then of course… they need to depend more heavily on charitable assistance from us and from other organisations. It’s an absolute mess, whichever way you look at it.”