Welfare groups wary of Centrelink reporting changes

The Morrison government expects to save $2.1 billion from the new measure

Anti-poverty advocates fear plans to change Centrelink income reporting for welfare recipients may cause a repeat of the federal government’s “disastrous” robodebt program.

Social Services Minister Anne Ruston on Tuesday announced changes allowing welfare recipients earning an income to report their fortnightly earnings to Centrelink using their payslip.

Currently recipients must manually calculate their earnings based on the number of shifts they worked and the hourly rate, rather than the amount they were actually paid.

Ruston said this would improve payment accuracy, and save the government $2.1 billion over five years.

“We want to make sure that Australians who need financial support are able to get the support that they are eligible for – no less and no more,” Ruston said.

“The current system of calculating earnings can be confusing and lead to misreporting especially when accounting for overtime or penalty rates. These changes will make accurate reporting much easier.”

While anti-poverty groups welcomed the simplification of the reporting process, they were wary of any attempts to automate welfare payments, noting the issues with the government’s automated debt recovery system robodebt.

Robodebt used data from government agencies to pick up discrepancies with what people had reported to Centrelink, but this led to thousands of welfare recipients being sent automated recovery notices even when they didn’t owe money.

The government admitted in November that robodebt was unlawful, and 734,000 welfare recipients who received robodebt notices are still waiting to find out if they are entitled to refunds.

Australian Council of Social Service CEO Dr Cassandra Goldie said it was important that this new system was accurate, and that people could easily make corrections where pre-filled data was wrong.

She said ACOSS would closely check the legislation to ensure automated income averaging is not used.

“Robodebt shows how disastrous relying on automation can be, which is why there must be proper checks and balances in place,” Goldie said.

“Automated income averaging has been one of the worst aspects of robodebt… up to 60 per cent of robodebts used averaging, which was found to be unlawful by the Federal Court last year.”

Goldie added that whatever savings the government expected to make through the changes, “it must factor in money owed to potentially thousands of people who were wrongly charged with robodebts since 2016”.

Jeremy Poxon of the Australian Unemployed Workers’ Union echoed Goldie’s sentiments, telling Pro Bono News it was “ludicrous” for the government to talk about savings from the new system, when it was still unknown how much the government owed people who paid false robodebts.

He said he was not convinced this new system will accomplish what the government is trying to achieve, given the potential risks of tying income reporting to worker’s payroll slips.

“For example, there is a very serious likelihood that payroll errors made by employers could result in accidental over-reporting that would see recipients land false debts,” Poxon said.

“According to research conducted last year by the Australian Payroll Association, payroll managers admitted to making payment blunders at least once a month.

“Given the rampant wage theft cases we’re seeing popping up all over the country, it seems especially dangerous for income support recipients and vulnerable workers to solely rely on their employers to do the right thing.”

Poxon was critical of the plan when it was first revealed in last year’s budget, telling Pro Bono News last April that the emphasis on overpayments unfairly framed welfare recipients as dishonest when many were desperately struggling to survive.

He said this latest announcement was similarly unfairly targeted.  

“[It] follows the same cruel and tired logic of austerity: that the government must claw back funds from poor people to achieve its surplus,” he said.

“Rather than raising Newstart, or prioritising the payback of illegal robodebts, it’s disgraceful that they’re instead planning to take away more money from the people they’re already failing.”