Government warned about discrepancies in data-matching system before reducing human oversight

Guardian Web |

The government drastically reduced human oversight of Centrelink’s data-matching system despite holding internal analysis showing that 15% of detected discrepancies were not debts owed by people.

The Department of Human Services conducted a cost-benefit analysis of the effectiveness of its data-matching process with the Australian Taxation Office for 2011-12, 2012-13 and 2013-14.

The system detected 1,080,000 discrepancies from 866,000 welfare recipients, which, at that stage, were manually examined by Centrelink staff to weed out errors. The analysis found 85% of those discrepancies led to a debt of an average value of $1,440.

Related: Centrelink debt notices based on 'idiotic' faith in big data, IT expert says

The analysis was referred to in 2015, in response to a question on notice from the Labor senator Doug Cameron to the Department of Human Services secretary, Kathryn Campbell, who, like the human services minister, Alan Tudge, has been on leave during the debt recovery controversy.

In mid-2016, as part of its attempt to ramp up the debt recovery program, manual oversight was largely removed. Now when a discrepancy is detected the system automatically sends out a letter; more than 169,000 have been delivered since July.

If no response is received or someone is unable to dispute the tax office’s figures, individuals are told to begin paying. Even when a person disputes the debt, they are told to start paying.

In many cases, welfare recipients are not receiving initial letters owing to changes of address, or are unable to track down years-old information about their income to prove they were entitled to benefits.

Related: Even though it's an error, I have to start repaying my 'debt': Centrelink debt victims share their stories

Labor’s Linda Burney said the analyisis showed the government knew “thousands of honest people were going to be targeted but he pushed ahead anyway”.

“That is an incredible failure of administration,” she said. “People deserve to see the full business case and methodology the government have used to inflict so much distress on the community.

“Minister Tudge says the system ‘is working’. Not for those calling my office day in and day out. How many people are paying false debt while they are waiting for review?”

Burney questioned whether the 85% figure included debts later found to be baseless, and called on the government to release the analysis and the business case in full.

Tudge said the system continued to operate in largely the same way it had for years. He said people were given multiple chances to explain any discrepancy.

“The methodology is precisely the same that has been used for many years now, with the main difference that we’ve automated more of the process,” he said.

“When there is that discrepancy, I think it’s reasonable to ask people about that discrepancy, and ask them to explain if there is a valid reason for it. So that’s what has always been the case, it’s what we continue to do.”

Related: Minister unaware of anyone 'convinced' they have false Centrelink debt notice

The St Vincent de Paul Society has joined calls for the system to be suspended. The chief executive of its national council, Dr John Falzon, said on Tuesday that Centrelink needed to be properly resourced, and described the debt recovery scheme as “part of a broader assault on the social security system”.

“People should not be intimidated and hounded for money they do not owe,” he said. “Centrelink should not be used by the government as a blunt weapon to achieve a deficit reduction on the backs of people who already carry the greatest burden of inequality.”

The Australian Council for Social Service said on Wednesday that the government fundamentally failed in its duty of care to welfare recipients.

Its acting chief executive, Peter Davidson, said the system was treating them like second-class citizens. “Centrelink must properly investigate overpayments rather than shift the onus of proof on to Centrelink recipients,” he said.

“This would not be accepted from a private creditor and it should not be accepted from a government agency assisting financially vulnerable people.”

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