Centrelink debt: Guilty until proven innocent
By John Haly
Centrelink has been fraudulently issuing debt notices to people who owe no money. Persons so identified are then harassed and threatened to the point that they pay this un-owed debt rather than being penalised by a system, which they already know actively disparages them.
Labor’s Anthony Albanese, while being concerned about this government’s debt collection said, “No one would argue [against] that if someone has a debt from Centrelink, had payments to which they were not entitled, then it should be repaid“. I would argue to the contrary.
The Poverty of Welfare
Centrelink’s services exist to ensure the disbursement of social security payments whether that be for unemployment, or aid for families, carers, the disabled or indigenous. That financial aid in many cases has rarely increased, and in some has decreased in terms of CPI value. In the case of the baseline unemployment benefits, though indexed to the CPI, “there have been no legislated changes to real Newstart rates in over 20 years”, in fact since 1996.
This has raised legitimate concerns that the Newstart allowance is well below the poverty line, which is an issue championed by:
- the Unemployed Workers Union,
- the Australian Council of Social Services,
- Anglicare,
- and the ABC (although that was prior to it’s current management).
Rorters! From Welfare or Multinationals?
These inadequate payments entrench poverty, inhibiting rather then aiding workforce participation. Mobility, presentation, education, literacy, and skill acquisition all cost money. Financial stress adds to social marginalisation. Bullying by the job networks and policy victimisation generates social ostracisation in the community, and also limits possibilities for the unemployed and disabled. So sorry Anthony, but I am very much inclined to believe that if anyone got a little more money out of this dysfunctional system than the government was prepaired to provide, then they deserve to keep it. Any extra money would only increase their chances of improving their lot, including their ability to contribute to the economy and to finding work. Instead of attempting to recoup $3.5 billion in alleged “welfare debts”, why is the government not energetically recouping $6 billion from the tax dodging multinationals?
What about getting a job?
Numbers don’t lie but as the ABS knows, how they get presented matters. Apart from the financial constraints, there is the statistical improbability of finding work in any way. Roy Morgan demonstrates unemployment figures in December 2016 were 9.2%, which involves 1.186 million people. In fact, when you take into account underemployment, which has risen another 10.8%, the pool of potential job seekers rises to 2,584 million. All of these job seekers are competing for approximately just 163,100 jobs Australia wide (Nov 2016 Dept. of Employment IVI stats.). In the worst-case scenario, there are at close to an average of 16 people for every single job in the market and that doesn’t take into account the following:
- the new year’s rush of young school leavers,
- foreign workers with reciprocal work rights,
- current workers seeking to change jobs or
- the new entrants to the unemployment lines as car manufacturing in this country vanishes.
And now, just to add to the psychological and financial pressures inherent in looking for work, the government has come up with a new strategy to inhibit your search, by occupying your time with digging up old payroll records. The news of this new tactic is ever-present. Twenty thousand people a week receive notices of debts – allegedly to recoup incorrect welfare payments. All of which are triggered by an automated debt recovery system, which is under intense criticism because of what is essentially, the (intentionally?) flawed logic of a computer algorithm.
Erroneous mathematics
Centrelink’s computers (IBM machines in case you were wondering) are attempting to match tax office data with Centrelink records to determine if there are discrepancies between Centerlink financial information and Tax office records.
But an inherent incompatibility exists between these two data sources, and it is a matter of timing. Centerlink has information about its payments made fortnightly, and possibly data relevant to jobs which clients were offered and accepted. Centerlink is unlikely to be aware of the continuing circumstances of that job or subsequent ones found independently in the course of any given financial year. The tax office has only an annual summary of income. There is no breakdown into weeks, fortnights or months. There is no breakdown of pay rates, when it was specifically known they earned it, or what changes to income streams occurred in the course of the year. The tax office data is therefore incompatible with Centerlink’s data. The government is comparing apples with oranges.
Despite this, Centrelink’s algorithm takes your yearly income as reported to the ATO, and averages it over each fortnight of the year. As any primary school age statistician would recognise, an annual “average” apportionment cannot measure individual fluctuations and is a flawed measure in any given fortnight. To assumes absolute consistency for all fortnights is absurd on a number of levels. The only group that may get close to this pattern are the fully employed and even then, there are allowances, overtime, uneven hours, holidays, sick leave, RDOs, wage rises, wage falls, changes of roles, and any manner of occurrences that will alter the payroll for any individual over any given week/fortnight. Certainly, the most unstable employment group and the most likely to have variants are the unemployed. It is common sense that if you are dealing with people who move in and out of employment in any given year where they may move from poverty one fortnight to sufficiency (or if lucky, excess) the next. It is common sense that averaging their yearly income will produce inaccurate results by which to measure any given actual fortnight.
Guilty before proven innocent!
So what does Centerlink do? They take the ACTUAL fortnightly records held by Centerlink along with any limited volunteered data and try to cross-reference it against a fortnightly averaging of annual taxation income data. The normal presumption of statistical probability would tell you the likelihood of such figures matching for this demographic, is extremely unlikely. You would have to presume the mismatches will be the most common occurrence. Any programmer (and I worked as one for most of my career) would tell you such a matching is deeply flawed. Therefore clients should be approached with the assumption of innocence. In the absence of specific information in Centerlink’s internal records for discrepancies, inquires should be made tentatively as to why there might be a prima facie case for a mismatch in numbers. The onus of proof should also be on Centerlink (and not the client), as the process is so obviously flawed. Something fully recognised internally within Centerlink, if not by the political policy makers. In the face of the inherently flawed logic of this approach, innocence till proven guilty would be the legally prudent course of action.
So what does the government decide is the best course of action? To implement a process that presumes people to be guilty (of debt) till proven innocent. Twenty thousand welfare recipients a week have been receiving notices that they have 21 days to prove their “innocence”, or be hit with penalties. These include a 10 per cent debt recovery fee, jail time, a restriction on travel. The event for which they are being investigated may be anywhere up to six years in the past. Some recipients are paying up, not because they accept that they actually owe the debt, but simply because they can’t locate evidence from past years, or because they fear the repercussions of a punishing government bureaucracy. If you have ever had to deal with Centrelink or any of its private job network partners you will be well aware of how punitive they are. Surprisingly to the government – apparently – this is producing a backlash.
Flaws and error rates
Human Services Minister, Alan Tudge, insists the automated process is not flawed and despite protests to discontinue the letters he is forging ahead with gusto. For Trudge to declare, “he wasn’t aware of anyone who was completely convinced they don’t owe money but have been given a debt notice” is either grotesque wilful ignorance or a lie in the face of a growing body of evidence otherwise. When even “Liberal Senator Eric Abetz acknowledged there seemed to be problems with the system“, then you know it has to be disastrous.
The one aspect of this (that nobody appears to be talking about) is the sheer workload this must be creating for Centerlink. Let’s assume Alan Tudge is correct that the error rate is only 20%, which is contrary to what centerlink whistle-blowers reveal is the case. Giving him the full benefit of the doubt, 20K letters a week represents 4K fraudulent claims a week. Which is 16K a month and 192K a year. After 1.04 million data matching discrepancy letters in a year, they will not even cover all the numbers of unemployed in this country (1.186 million), let alone all the other welfare recipients for other reasons. Alan Trudge expects the system to “generate 1.7 million compliance notices”, which by his own estimates means at least 340,000 letters in error. Of course, the Centrelink compliance officer whistle-blower that spoke to the Guardian suggests the percentages of errors are vastly larger. Given that all of this was not only easily identifiable but unavoidably self-evident prior to the system being switched on, how is any of this not fraudulent?
Voters and workers affected
At the current letter-writing rate (if they can maintain it) this will take over a year and a half to complete, although Mr Trudge thinks it will take 3 years. By then Australian Lawyers will be in a feeding frenzy of class action suits with minimally 340,000 clients with legitimate grievances with the government. This will presumably still be an ongoing issue by the next election. According to 2014 Centerlink data there were 14.459 million Social Services payments made in the March 2014 Quarter to 50% of the population – interestingly, a reduction from previous numbers. There are only 13.5 million voters – according to AEC – who voted in the last election. This is not a vote winner. But presuming you are not expecting to win the next election, leaving this mess on another party’s door to cleanup provides a damaging handicap. The amazingly short-term memory of the public, gives the coalition an advantageous opportunity to disparage what the next government will have to do to rectify the situation.
Putting aside the legal costs, consider then the other real cost in man-hours for Centerlink to resolve each erroneous issue when there are minimally 4000 cases a week. To keep on top of the “erroneous” case load – if Mr Trudge is correct – requires the equivalent of 105 Centerlink officers processing each claim within an hour in a 38 hour week. This presumes the ability for each officer to address, research, confirm and redress an error on each letter in one hour and do no other administrative work. There appears to be mounting evidence it takes much more time. Plus that does not factor in the equivalent of the 421 Centerlink officers devoting a single hour in a 38 hour week, that you’d need to process the claims – and not fall behind – which Mr Trudge believes are valid. But these figures are conservative. As I previously explained, the error rate is far larger according to the Guardian’s Centerlink whistle-blower. The backlog of work is just going to be extraordinary, if it isn’t already. No wonder it is so difficult to get through to Centerlink on the phone. It was nearly impossible to get Centerlink on the phone when there was only 20,000 debt recovery letters sent in a year but now that they are doing it every week …. ? As for other means of communication, even compliance officers are complaining they cannot access the Centerlink online system efficiently, let alone customers.
Opportunities or Overload?
In truth, even if Alan Trudge did put an end to it; Centrelink will probably still be spending thousands of man-hours dealing with the consequences of this flawed and fraudulent system. The same would be true if the Commonwealth Ombudsman began investigating Centrelink’s debt recovery system and put a stop to it – disregarding the costs in legal redress, which are sure to follow. Nothing about this course of action makes any logical sense, except to see this as class warfare against our vulnerable and easily disparaged citizens.
Well at least, it will probably increase employment opportunities in the community at Centerlink that will giving a few folk some extra, well sought after work. But wait, isn’t there a public service full time employment freeze?
This article was originally published as ‘Debt Collection’ on Australia Awake.
26 comments
Login here Register hereJohn you wrote…’I would argue to the contrary.’ to Albo’s comment “No one would argue [against] that if someone has a debt from Centrelink, had payments to which they were not entitled, then it should be repaid“.
You are saying Albo should encourage folk who have a legitimate debt with Centrelink not to pay it, if I read your article correctly. You show that payments have been stagnant for some 20yrs Plus the inability of other payments to keep up with the cost of living.
All very admirable sentiments and no one would argue with that. But you are encouraging people who know they owe money to break the law.
That is Albo;s point. Regardless of the right or wrong, the law is the law. Of course there are stupid laws, some that are designed not to increase adequately pension and benefits, but knowing of a legit debt is not an excuse to break it.
Damn it I have been complaining about the Govts tactics which are disgusting for weeks, written to Tudge, Turnbull, about the heavy handed approach by the Dept.
However I agree with Anthony Albanese’s sentiments about those who know they have a debt, a proven debt…there are not many who have rorted and don’t know it. (Politicians included, but different laws for those bludgers of course).
I hope any who are considering ignoring a known debt do not follow your advice. Eventually when they are found out, who will go to their rescue? yourself?
I would like to speak to Alan Fudge.
I have incontestable evidence that he is tudgng the figures.because my son was a victim and now Centreline needs to repay him what was incorrectly demanded but fearfully paid.
To add insult to injury his carer mother must travel 60 km on next Tuesday to be present to answer 59 “review” questions to justify his disability payments.
He has been in the system since birth having been born paralysed on the left side.
He did assisted employment for 20 years.
He now cannot walk or stand without support.
He is 42 tomorrow.
As if Centrelink wouldn’t “know”him!
What a greedy farcical apology for a government we have !
I.am willing to.be interviewed by any interested entity.
Although working a small solo business which entails often travelling 1000 km per week, I will find the time.
Oh… one more detail … I shall be 86 next March.
Indeed Mr Tudge ” I’m not aware of individuals who are completely convinced they don’t owe money, but have been given a debt notice ” …..
You ARE ” completely convinced ” the Australian electorate is comprised of SHEEPLE !! … there’s hardly an ” Individual ” within Cooee !!
This Government by a Fluke / Contrived Majority (of one!) currently displays a fine talent for ‘ Herding ‘ .i.e. treating the aforementioned constituency with Utter DISDAIN !….. & getting away with it IN OUR FACES yet, … Come On !
Let’s be fair here. When Tudge said that he “wasn’t aware”, he was simply using the tried and true Arthur Sinodinis defence that if you’re in charge and not aware of anything, you can one day get promotion after promotion because if there’s one thing that the current government values, it’s unawareness!
…not sure, if it’s a deliberate decision for political reasons or just people valuing people with similar qualities!
“Wasn’t aware…”
It’s a bit like Peter Reith’s response about the video that showed the “children overboard” claim was wrong.
“Well we’d better not see the video then”.
They think it’s something called plausible deniability and very clever but everyone knows what it REALLY is.
Actually, I think that Tudge should have just said, “I’m not aware” and left it at that!
Gees, I’m using all the best lines in comments – I should be saving them up for my next post.
Hi John. In response to your excellent article may I add one point. How is it morally justifiable to take money off people living below the poverty line? If someone has made an honest mistake then it should be repaid but not until they are earning sufficient money to be able to live. So I propose that all such debts be held over, similar to a HECS debt until a certain level of income is reached before repayments are made. Secondly if someone living below the poverty line knowingly defrauds then they should be given community service so their below the poverty line payments are not garnished. I have written to each party with this idea, so far not one reply, amazing!
Great article. I especially like your point that the most likely scenario for this data “match” is a MISMATCH. In which case 20% errors is likely to be an underestimation.
And when are we going to get accurate figures on the amounts of these overpayments? Certainly a great deal less than the Centrelink data matching program estimates I imagine.
I guess I’m lucky I haven’t been getting any paid work for several years. If this farcical program was used just a few years back it would have barely included (6 years retrospective) a period when I’d had some months of receiving a nice income for some programming work. I always dutifully notified Centrelink and was not paid during those periods, but matching in the heavy-handed way they are doing would have been flagged (mistakenly) as fraud.
Unfortunately the message many will take home from this is that if you are on the dole absolutely do NOT take on occasional work. The only modes acceptable to this government are full-time permanent work that begins or ends at the financial year divide (June/July), or no work at all. Anybody who has casual or part-time work or even worse, gets occasional work is in very deep doo-doo. This is an odd thing for a government that believes in encouraging people into casual and part-time work.
Unfortunately the ony conclusion I can come to is that the government is indulging in deliberate fraud. I’m astonished that they would attack their own citizens this way. Maybe they think they can use it to vilify the unemployed and spread hate for the unemployed in the wider community. The backlash must be greatly surprising them. I wonder how long it will take them to realise they’re paddling up shit creek in a barbwire canoe.
I initially thought it might be an attempt by the government to discredit Centrelink so that they could privatise it, but now I’m beginning to think it is merely that this government is made up of really, really stupid people. Honestly, what intelligent person does damage-control by denying the problem exists? Fudge — oops, sorry, Tudge is looking like a complete fool at this point.
It’s the sort of thing that makes me wonder if there’s something else more sinister happening that all this pain is distracting us from. Am I paranoid? Or is that simply the appropriate response to this government?
It occurs to me I might still be in trouble if they see cases where I’ve helped local charities set up websites, where I’ve paid the online costs out of my own pocket and been reimbursed by them later. A couple of hundred dollars suddenly turning up in my account might look suspicious if using these sorts of programs. In future I’ll make sure I don’t help people unless they can pay directly for any costs. Any out-of-pocket expenses have suddenly become dangerous for me.
Miriam, think of it this way: this government absolutely hate women, and the majority of Centrelink clients are women.
Nudge, like all his arsehole co-horts is full of nothing but weasel words. Example : “I am not aware of individuals who are completely convinced they don’t owe money, but have been given a debt notice”.
The key word here, and it is one that is used over and over by this globby bottle of cheap, stinking chip oil of a government, is the word “completely”.
Nudge, apparently, is not aware of anyone who is COMPLETELY convinced that they do not owe money. As in 100%, rolled gold sure that they are debt free.
Anyone who deals with Centrelink in any capacity can, and will, NEVER be sure they do not owe money. It is an impossibility to be sure of such a fact, and so why has no-one pulled up this ignoramus on this? Okay, call it semantics if you will, but this fetid government thrives and exists on semantics.
In context, “completely” absolves Nudge of a multitude of sins – UNLESS he, and his clusterfluck of knuckledraggers, gets a spotlight slammed smack on their weasley use of words.
Please, is there anyone in the media today who can nail this use of “Get Out Of Jail Free” qualifier words to their foreheads?
THEAIMN aside, I fear I will have a fruitless wait ahead.
A Centrelink strike would be quite appropriate about now…struggling for a pay rise for the past 5 years.
Knowing that this debt recovery campaign would impose a much bigger workload on Centrelink personnel wouldn’t you think that competent managers would dedicate extra staffing resources to specially designated call-lines and in-house help counters in Centrelink offices.
In a well organised corporation, failure to respond to this service demand would result in heads rolling and the sort of cover-up we are seeing from the Minister responsible would result in his dismissal.
As jamesss says, we need to see the Centrelink staff fight back in circumstances where their management are incompetent.
I’m not as astute as I should be, but has anyone heard Malcolm Turnbull make any statement on this fiasco? He seems to be getting his lackeys to do all the talking. I’d like to hear him stand up and say that he thinks this ugliness is OK.
Jamesss yes very timely and the public would barely notice from a service point of view…they have been stripped to the bone in both hours offices are open and numbers.Be a damn good wake up call to this heavy handed Govt, general public would support the staff almost 100% over this fiasco
iggy648…I did a quick Google search, not a squeak out of Turnbull. Again he takes the cowards way out, silence. Justifies every word of criticism he gets
David1,
I fully realised that what I said by way of disputing Albanese’s statement would be controversial. SO thank you David1 for taking that on. First off, I wasn’t supporting fraud and in fact I was accusing the government of engaging in fraud through illegally demanding money with menaces. I do through believe chasing these overpayments is largely:
[3A. Have a look at the cartoon by Matt Golding in http://www.smh.com.au/federal-politics/political-news/centrelink-one-in-10-on-welfare-is-overpaid-creating-a-bonanza-for-debt-collectors-20150424-1msfz5.html, as I think it has something significant to say about our misperceptions about what it is to be an overpaid welfare recipient. The cartoon might provide a lot of people some grounding in reality through its sarcasm]
In a world where the instigators of the Global Financial Crisis have been allowed to escape being criminalised and allowed to continue with no significant consequences we continue to focus on petty overpayments or even tiny fragments of fraud by desperate, marginalised people who might only “steal” to feed, house and provide for the survival of their children or loved ones. The far greater levels of fraud are practices by the politics perpetrating this oppression upon the people they are supposed to serve. You complain that I am encouraging people to “break the Law” because “the law is the law” and in doing so you:
Perhaps you might want to examine your somewhat inconsistently applied assumptions and consider why you hold these values and what the ultimate consequences of doing so would be. Because by such principles, there is nothing in the Centrelink debt retrieval of “legitimate” or “illegitimate” debts that is in anyway “wrong”. As for myself, I intend to keep encouraging “civil disobedience” until this process of “legal” debt reclamation is suspended.
John Haly…I am flattered you spent so much time om my ‘small’ by comparison initial post. Let me say firstly I will not be allotting the same. However I will mention with regard to your, IMO unwise use of Albo’s hardly controversial proper reminder about not repaying if a debt is knowingly incurred.
Nothing wrong with it, a proper observation again in my opinion and I will continue to defend it.
Your final sentence basically, is answer to the rest. Quote: ‘ I intend to keep encouraging “civil disobedience” until this process of “legal” debt reclamation is suspended.’
John Haly
Great post mate.
Cheers.
David1
Thank you again, because now I have two things to thank you for. One for raising the issue which I predicted many people would think of, but for which I could not devote the column space or time in the article to address. And Two, for the choice not to assert your position. And while I am content that you were flattered by the apparent attention to yourself, I’m sorry to say it was more about the ideology that was of concern to me. I’m quite cognisant of the reality that many people think as you do. A lot of them, although, would not articulate it. So I therefore appreciate that you did. What you did was give me an opportunity to articulate a position, and to address the issue I knew I hadn’t. Having articulated your position, whether for reasons of confirmation bias, or cognitive dissonance, or just simply stubbornness, I was unlikely to have you change your mind. I expected you would your ground. Oddly enough I did not write that for you. I don’t do so now.
I wrote that for the innumerable people for whom that question would have been raised and will not articulate their position but will consider alternatives because they haven’t committed themselves to a framework of thinking. Your questioning gave me a platform, and irrespective of your recalcitrance to shift from your position, there will be those in the community that read this that will reconsider! Perhaps purely because they haven’t articulated a position, and therefore they don’t feel any emotionally commitment to it. So yes, I spent time on it, I sought advice from friends of a similar mindset, and I wrote my considered opinion in a separate note, massaged the comments where needed and then copied and pasted it to AIMN’s comments. My reply was never for you. In believing so, you It misinterpret my motivation for writing and perhaps the reason why many citizen journalists write articles here.
Australia is a country created on the backs of injustice. The original injustice was developed in England, where stealing a loaf of bread whether to feed yourself or your children was punishable by incarceration and in many people’s cases deportation to Australia. Somewhere in England’s past, there was a store merchant who managed to grab hold of the small boy or spindly looking man who stole a loaf of bread from his shop. Ahead of him lay two choices. He could choose to hand him into the Old Bailey or he could hand the thief an apple, and suggest that a little fruit would help his diet, and sent him on his way. Australia was populated by thieves & villains for whom the grocer made the first choice.
The marginalisation and criminalisation of the poor because they are forced into a minor crimes for survival, was what our nation was based on. You’d think the ancestors of such people would at least show a little empathy and sympathy for people in a similar situation. Instead just like many Zionists in Israel to their Palestinians neighbours, we have become the oppressor, we once fled from.
Somewhere out there there is a Centrelink Officer who might be moved by what he reads here. He may – when faced by an unemployed client who doesn’t have all the required paperwork to prove he doesn’t owe the thousands the robo-debt system says he does – say “screw them!” and sign off on discharging the debt anyhow. Perhaps a person of authority will give someone a second chance, the subjugated person neither asks for nor expects. Although the “authority” doesn’t need to, he may change that person’s life forever. Perhaps the grocer in this era, will hand the would be bread thief, an apple, his ancestor didn’t.
So unless you’re a Centrelink Officer or a policeman or somebody with the authority to do harm to the disenfranchised, then your willingness to “continue to defend” a “proper observation” doesn’t matter. You see while this is, on one level a reply to you, it is a message to a far wider audience, and one that I seek to address. You represent the excuse to express my concern, and this independent media provides an opportunity for a wider audience participation, far beyond you. I seek a little “anarchy”, a little more mercy than what is”proper”! I challenge the very sensible and clinically correct behaviour in an attempt to turn us around to be something better, with more largess. That I do not convince you – though regrettable – is not the point. I don’t write this for you, I’m writing for someone else.
John Haly….zzzzzzzzzzzzzzzzzzzzzz
David1, is that the best you can do?
John Haly, message received. Well said. I’m glad you did so. Thank you.
David1 you embarrass yourself with your stupid response.
Does anyone seriously think that had an ALP government fallen into this mess, the response would have been quick and dramatic. The government giveth and now taketh away; bless be the name of sludge. More seriously, I would like to know why governments consistently pour money into IBM and Microsoft. With the number of so-called computer engineers on the (probably stub-contracted) payroll, I’m baffled, as some I know in the industry who make money with designs and programming are still sniggering. The whole of government computing services requires a hard-hitting audit including a look at money for provision and maintenance. Who purchased what, when and why?
The conclusion is obvious! Turnpuke couldn’t afford to buy his job for the next three years after the next election, so has made the scum unelectable.