Labor and the Greens are set to force a Senate inquiry into Centrelink's controversial automated debt recovery system, an issue that had dogged the federal government for more than two months.
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The Senate will vote on a motion to establish a wide-ranging probe on Wednesday as the government continues to defend data-matching of records held by government agencies to recover millions in overpayments to welfare recipients.
Labor's Doug Cameron and the Greens' Rachel Siewert gave notice of the motion on Tuesday, with Pauline Hanson's One Nation Party and the Nick Xenophon group expected to support establishment of the inquiry.
The move comes as the Community and Public Sector Union plans six days of targeted industrial action over stalled enterprise-bargaining efforts and the debt-recovery controversy from next week.
Terms of reference for the inquiry would include consideration of the impact of the computer-based debt processes on the elderly, families, students, people with disability and recipients of unemployment benefits; administration processes by the Department of Human Services; and review processes for welfare recipients told to repay debts.
Senator Siewart said the government was trying to extract money from struggling Australians and had refused to consider the scale of the problem.
"This is just the tip of the iceberg as we know so many people are yet to receive the debt notice, it's only going to get worse," she said.
Human Services Minister Alan Tudge and Special Minister of State Scott Ryan both defended the debt-recovery processes in Parliament's first sitting day of 2017, as Labor cited examples of Australians who have received debt notices worth tens of thousands due to errors.
Independent MP Andrew Wilkie told Parliament the program had had a severe financial and emotional toll on thousands of people and asked Mr Tudge to design a fairer, more humane system of debt recovery.
Mr Wilkie said about 4000 incorrect debt notices were being issued each week.
Mr Tudge responded by referring to a "gentleman from Queensland" who he said received Newstart for two years from mid-2011 by claiming he earned $5000 when he really earned $100,000.
"The reason we have to do this important work is because it is the unfortunate reality that some people deliberately misuse, abuse the system," he said.
The inquiry will seek to determine the error rate of the debt notices, a figure believed by staff to be extremely high. The department has not yet provided a figure, other than to say there is no basis for suggesting it is 90 per cent.
Fairfax Media reported staff inside the Centrelink unit warned officials automated data-matching would lead to incorrect debt notices being issued but say those concerns were dismissed.
The Commonwealth Ombudsman began an investigation in January.
