'Robo-debt' ramped up as Coalition refuses to end debt recovery program
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'Robo-debt' ramped up as Coalition refuses to end debt recovery program

The Coalition government is ramping up its controversial "robo-debt" program, sending letters to welfare recipients about Centrelink debts in greater volumes and ignoring repeated calls to halt automated debt recovery.

Officials at the Department of Human Services told senators of its redoubled debt recovery effort on Wednesday, saying it had mailed 114,000 letters raising possible debts in July and August, more than a quarter of all notices sent during the 14-month life of the program.

The Coalition is redoubling its "robo-debt" effort despite calls to suspend the program.

The Coalition is redoubling its "robo-debt" effort despite calls to suspend the program.Credit:Erin Jonasson

The figure confirmed the Coalition has doubled down on its maligned "robo-debt" effort despite a Senate inquiry finding it should suspend methods of debt recovery that relied on matching and averaging income records held by Centrelink and the Tax Office.

After starting the automated debt program, the Human Services department found itself embroiled in a national storm of controversy as critics savaged its letters for being too aggressive and accused it of intimidating vulnerable people into paying false debts.

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Human Services official Jason McNamara told a Senate estimates hearing that in 202,000 cases where the department finalised the debt amount, 49,000 welfare recipients who received letters since the 'robo-debt' program started in July 2016 were found to owe nothing.

It had found 153,000 debts were owed, but had also later discovered after extra information was received that 29,000 of these amounts were incorrect. The official said the department's own error rate on the debt notices was around 1.7 per cent.

This included nearly 10,000 or 7 per cent of debt amounts reduced to zero on review and another 17,000 lowered to a total above zero.

Mr McNamara confirmed that of 430,000 letters the department sent raising possible debts since July 2016, less than half had determined whether a debt was owed or not, indicating it was still corresponding with clients trying to prove they weren't overpaid income support.

He denied the administration error rate had risen since Human Services adopted the new automated debt recovery program.

"If you want to talk about it in terms of an administrative error, we actually see the administration error in this system probably on par to what we had in the previous system," he said.

But he admitted that under the automated system, the department was chasing debts at more than ten times the volume it used to, and agreed to a suggestion it was now using data to find more money owed.

"We're continuing to implement it in line with what the government decided," Mr McNamara said.

Greens senator Rachel Siewert said the Coalition's growing "robo-debt" program showed contempt for welfare recipients.

"It's very distressing for people, particularly people with vulnerabilities," she said.

Labor MP Jenny Macklin said the "robo-debt" program was flawed and showed the government was out of touch.

Australian Council of Social Service chief executive Cassandra Goldie said the figures didn't show how many people only paid debts because they were scared, overwhelmed or "simply too busy to spend hours on the phone trying to clear their name."

ā€‹"Robo-debt must be shut down and replaced by a fair, humane and accurate system of debt recovery," she said.

The Senate inquiry found in June the program had caused a "profoundly negative impact on the lives of thousands of Australians" and was responsible for trauma suffered by innocent welfare recipients required to prove they did not owe money to Centrelink.

A Commonwealth Ombudsman report also found Centrelink's demands on former welfare recipients were neither "reasonable" nor "fair".

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The Coalition this month pushed back against the Senate inquiry findings, saying there was no evidence to support the recommendation that the online system should be put on hold.

Clarification: An earlier version of this story said 29,000 welfare debt recovery notices were reported last week as being discovered to be wrong. These notices were adjusted after extra information was received. The Department of Human Services' own error rate on debt notices is around 1.7 per cent.

Doug Dingwall is a reporter for The Canberra Times covering the public service and politics.

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