Centrelink debacle worsens as Aussies face forced debt

THE Centrelink debacle is getting worse, with more Australians each day revealing they have been slugged with demands to pay back tens of thousands of dollars they don't owe.

Furious Aussies, many of whom were on the dole for only a brief period years ago, are demanding action from the Government, which is denying a problem exists.

Michael Griffin, a filmmaker from Brisbane, told news.com.au he would go so far as to call what is happening "extortion".

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Michael Griffin
Michael Griffin Supplied

The 34-year-old received a standardised letter just before Christmas telling him there was a discrepancy between the income he reported to Centrelink in 2013, when he was unemployed for three months, and the data held by the Australian Taxation Office.

After he went online and confirmed he had earned $26,000 over the year - he only had the option of yes or no - the automated system told him he owed $3000 back in welfare payments. It had simply divided his income into fortnightly chunks for the whole year.

"It was a shock," said Mr Griffin. "I'm still not a high-income person, I don't have $3000 lying around, I don't think many people do.

"My case is so obviously incorrect. It's just ridiculous.

"I don't want to be in debt, I want to do the right thing. I got off the dole and back into work and that's what's led to the problem."


'THE BIGGEST ISSUE IN AUSTRALIA'

In mid-December it emerged that Centrelink's new automated system was sending out 20,000 letters each week inaccurately demanding repayments from people like Mr Griffin. Since then, more horror stories are emerging every day as the compliance system refers pensioners, single mothers and disabled people to debt collectors for non-existent debts.

"I think it's the biggest issue in Australia at the moment," Mr Griffin said. "It's guilty until proven innocent and the burden of proof is on the receiver. The Government is exploiting legislation to bypass the legal process. They don't seem to be respecting the law.

"They should get humans involved. The computers have proved they're not trustworthy.

"I'm wondering if everyone's going to get these letters. It's preposterous."
 

The automated system simply averaged out his earnings over a year, rather than recognising when he had been out of work.
The automated system simply averaged out his earnings over a year, rather than recognising when he had been out of work. Supplied

Many of the people sharing their stories on social media with the hashtag #notmydebt had the same issue, in which the system divides income into a fortnightly average.

Others had different problems, including finding Centrelink was registering the same employer as two different ones because of a slight alteration in spelling.

For example, a woman employed by "University of Melbourne" and "Uni Melbourne" received a letter demanding $20,000 because the system believed she had a second full-time job, paying the same as the first.

Social media users described being left on hold for hours or being told they could only resolve issues online when the website wasn't working. One said Centrelink sent messages to her old address and email before bringing in a private debt collector within a few weeks.

Witnesses report chaos in branches as streams of scared and frustrated people attempt to sort out the mess.

The automated system simply averaged out his earnings over a year, rather than recognising when he had been out of work.

 

'IT'S ACTUALLY WORKING INCREDIBLY WELL'

Despite the steady stream of similar tales, Social Services Minister Christian Porter this morning maintained the automated system was working "incredibly well".

He told ABC radio less than one per cent of review letters had resulted in complaints and said they were not "debt letters" but "polite letters".

"The initial letter that goes to the welfare recipient saying that an issue has arisen, that there may be a discrepancy and we require some further information," he said.

"The complaint rate is running at 0.16 per cent. That's only 276 complaints from those 169,000 letters. That process has raised $300 million worth of money back to the taxpayer which was overpaid.

"What this system is doing is raising real debts around real overpayments based on real cross referencing of evidence.

"From what we've seen in a high volume system it's actually working incredibly well."

He said people on Centrelink had a responsibility to ensure their information was correct, with claimants like Mr Griffin expected to visit their local branch in person to provide years-old pay slips. However, some no longer have the information or have other difficulties, such as their former employer no longer existing.
 

Labor MP Linda Burney said no one in Government had answers for anxious Australians. Picture Kym Smith
Labor MP Linda Burney said no one in Government had answers for anxious Australians. Picture Kym Smith News Corp Australia

With the review process taking months, vulnerable Aussies may be forced to pay debts they don't owe or face losing their benefits and potentially their homes. Independent MP Andrew Wilkie - one of many calling for the system to be shut down - said people calling his office about Centrelink had talked of suicide.

 

'HONEST PEOPLE HAVE BEEN WRONGLY ACCUSED OF FRAUD'

Minister for Human Services Alan Tudge remains on holiday with family, but calls are growing for him to come back to Australia and deal with the issue.

Shadow Minister for Human Services Linda Burney said she had written to him to request the system be suspended while the glitch is fixed.

"My office has been inundated by calls and emails from honest people who have been wrongly accused of fraud," she told news.com.au in a statement. "The fact is the Turnbull government considers people guilty until they prove themselves innocent - that isn't right and it isn't fair.

"I've already written to Minister Tudge asking him to pause the program and stop recouping false debts until the system is fixed, I'm still waiting for a response. In the meantime people have spent their Christmas and new year season anxious about thousands of dollars of debt that they know they don't owe but which they are being forced to pay.

"No-one in the government has had answers over the last few weeks - I heard Minister Porter say the program was going well, he obviously hasn't checked his emails over Christmas.

"I'm glad some Ministers have had a good Christmas break, the holiday is over, it's time to come back and explain themselves."

The Department of Human Services said 72 per cent of clients who received letters of demand since September had resolved their cases online, and only 2.2 per cent were asked to provide supporting paperwork.

General manager Hank Jongen has urged people with problems to contact him direct on hank@humanservices.gov.au.



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