Welfare recipients told to pay back false Centrelink debt

CENTRELINK recipients across the country are being told to pay back false debts sometimes amounting to thousands of dollars because of a faulty computer algorithm.

The issue came to light in national headlines earlier this month and those affected by it are sharing their stories across social media.

An estimated 20,000 welfare recipients are being targeted each week by the algorithm, which uses data supplied by organisations such as the Australian Tax Office to match the information recipients give to Centrelink.

In a Reddit post made on December 31, user MJGee showed how the automated algorithm calculated they had a $3000 debt because it assumed wages paid over nine months were paid over twelve months.

"During financial year 2012-2013 I worked full-time for nine months and received Newstart for three months," said.

"The automated debt system asked me yesterday to confirm my total income for that year of $26,000.
"That is how much I was paid during the nine months.

"It then automatically told me that I owe $3000… what has clearly happened is that they've divided the $26,000 into 26 fortnightly amounts of $1000 and said that that was my fortnightly income for the entire year and that I should not have been receiving payment.

"Now the taxpayers are going to have to pay hundreds or even thousands of dollars of wasted employee time whilst I get this resolved."

The post attracted more than 300 comments, with other users sharing their stories of being targeted for debt that didn't exist. 

To fix the issue, people accused of debt are asked to source supporting documents such as years-old pay slips or letters from their employers. 

The Guardian earlier reported that 70% of people who received a compliance letter resolved the issue online.

Last week, the Labor opposition called for the Federal Government to suspend the automated compliance system and debt recovery.

Shadow minister for Human Services Linda Burney took to twitter to highlight the issue and said before the government accused people of fraud, it should be very sure it was right.



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