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Centrelink's debt debacle: It's going to get worse, says union

Beleaguered Centrelink staff are bracing for a "perfect storm" of customer service problems in the coming weeks, heaping more misery on the welfare agency's millions of clients, according to the main workplace union.

The ongoing debt recovery debacle already has public servants at Centrelink stretched to breaking point, the CPSU is warning, and the agency's workers will soon have to cope with hundreds of thousands of student benefit applications and pensioners trying to make sense of changes to their payments.

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But the department says customer demand is normal for this time of year.

The warning came on Monday as the Commonwealth Ombudsman announced it had launched an investigation into the debt collection project that aims to claw back up to $4 billion in overpaid welfare but has targeted tens of thousands of innocent clients for enforcement action over bogus debts.

Fairfax has also been told there is a "pecking order" to debt cases for review with clients who have gone to the media or a minister with their grievances moved to the front of the queue.

Centrelink says cases are prioritised according to hardship and the client's need of assistance.  

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The union says its members working on the controversial debt recovery scheme are reporting that nearly all the debts they are being asked to review turn out be bogus with cases, such as a demand for $9000 from a client who really owed just $90, pointing to a complete system failure.

The CPSU's assistant national secretary Michael Tull says the union is worried that the student benefit debacle of early 2016, which saw hundreds of thousands of young people have their benefits delayed by up to four months, could be repeated in the coming weeks.

Complicating the picture is likely to be the hundreds of thousands of aged pensioners who have had their payments changed since January 1, with large numbers likely to approach Centrelink for information.

"€œWe hold very serious concerns about Centrelink's ability to cope in coming months," Mr Tull said.

"There'€™s a perfect storm of work coming, with this debt recovery scheme likely to be just part of the problem.

"Our members are also bracing for a repeat of last year’s major problems with the annual avalanche of new students applying for benefits, additional work caused by the Turnbull Government'€™s harsh cuts to the old age pension and problems with Medicare processing."

The union official argued that service standards at Centrelink, and its parent-department Human Services, were already poor before the present crisis emerged.

"Thousands of jobs have been cut in the Department of Human Services and that's why service standards have dropped to unacceptable levels, including 36 million missed calls to DHS just last year alone," Mr Tull said.

"This is an agency in desperate need of proper resourcing, otherwise it's the general public who will continue to suffer.

"This debt recovery scheme needs to be urgently suspended until the significant problems with it can be identified and fixed, and particularly with an even more heavy caseload coming for staff because of the pension cuts and as people need Centrelink's support to commence their studies."

Human Services spokesman Hank Jongen said on Monday that demand for customer service was nothing out of the ordinary for this time of year.

"Demand for services is consistent with usual levels for this time of year," the spokesman said.

"The department prioritises support for those in financial hardship and who need immediate assistance."

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