Staff inside the Centrelink unit responsible for income reviews and eligibility assessments warned officials from the Department of Human Services that automated data matching would lead to incorrect debts being issued to low-income and vulnerable Australians, an insider has revealed.
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A longtime employee of one of Centrelink's income and debts teams said staff being reassigned to other work within the department were told computer-based debt recovery processes would be more efficient because the systems involved were relatively simple and would be less susceptible to errors.
The Victorian-based staffer, who Fairfax Media has agreed not to name, said public servants were "flabbergasted" by the justification for the new processes - which have already seen about 170,000 people receive debt notices from Centrelink including some seeking repayment of thousands and tens of thousands of dollars.
A growing list of welfare recipients say their debt notices include errors and demands for debt they insist they don't owe.
The Commonwealth Ombudsman said it was investigating the changes on Monday, following days of controversy and calls from Labor and independent MPs for the processes to be halted or shut down permanently.
"They don't care about average Australians, they don't care about their customers or their staff," the woman said.
"We told them 'shit', that's not going to work when they explained how the computer was going to do the work and said that it was going to misrepresent people's income and lead to incorrect debts going out, but they just told us 'computers and data can't be wrong'.
"They wanted to save a shitload of money and weren't interested in hearing what we thought about it."
The Turnbull government has downplayed the number of complaints received about the debt letters and customer services for welfare recipients trying to challenge the amounts they are being told to repay.
The staffer said longstanding cultural issues inside Centrelink and the department had contributed to the problems, with a view by senior bureaucrats that poorly developed online systems could be opened to the public and fixed later if faults emerged.
"There's a view that we should just keep moving, get customers off the phone and it is very frustrating for staff working inside DHS," she said.
"They deliberately make it hard for people to contact Centrelink to report problems and register for benefits. If you deter a few thousand people from registering for Newstart, even if they are eligible, it will save a lot of money for the government."
Last week the department quietly changed advice on its website requiring welfare recipients to keep evidence of income including pay slips for six months.
The advice now requires evidence of income to be kept indefinitely.
Labor's Linda Burney called on Human Services Minister Alan Tudge, who has returned from leave this week, to address the controversy.
"Sending out 20,000 letters a week, potentially 4000 of them mistakes, is crazy. It is not the way in which public policy should be exercised."
In his first comments about the controversy, Mr Tudge stressed debt notices were only issued after recipients had clarified any possible discrepancy or ignored an initial notice.
He said recipients had three opportunities to correct inaccurate information.
"Labor is demanding we cease a process that has successfully recovered over $300 million of incorrectly paid taxpayers' money since July and, frankly, I don't think many taxpayers would support that call," Mr Tudge said.
"Centrelink is simply doing what has been done for years: cross-checking Tax Office income information against what welfare recipients have self-reported to Centrelink.
"The only major change is that it is more automated so we can complete more checks.
"People who work hard and pay taxes to assist those in need expect there to be integrity in the welfare system, and that is exactly what we are ensuring."
