Centrelink robo-debt: The government’s war on the poor

January 28, 2017
The government axed 5000 Centrelink jobs before installing the automated debt recovery process.

The federal Coalition government has unleashed robots to illegally extort $4.5 billion from poor people. The money for politicians’ perks, tax dodging by the rich and corporate hand-outs — such as the $1 billion dollars given to coal giant Adani — has to come from somewhere.

So far, about 230,000 people have been sent threatening computer-generated letters from Centrelink demanding amounts ranging from less than $100 to tens of thousands of dollars. The money was allegedly owed to Centrelink because of overpayment of unemployment benefits; however the January 25 Canberra Times estimated that up to 90% of the debts were erroneous.

Not all these letters were sent to the correct address: some victims only became aware they were being targeted when they found themselves being harassed by private debt collectors.

The term “robo-debts” has been coined to describe the phenomenon. This is because the direct cause was the automation of the process of finding overpayments and recovering them that followed the sacking of 5000 Centrelink workers.

Once such a “debt” has been identified, the process of sending out letters, adding a 10% “recovery charge” if the victim does not respond within 21 days and then handing it over to private debt collectors is fully automated. Since the automation, the number of alleged overpayments has skyrocketed from 20,000 a year in 2015 to 20,000 a week.

The trauma inflicted on people already struggling on below-poverty-line incomes has been exacerbated by a deliberately dysfunctional process for appealing the debts. Centrelink staff have been instructed not to deal with any appeal in face-to-face discussions and tell clients that the only way to appeal is over the phone, where you can be put on hold for up to 3 hours, or through the notoriously user-unfriendly and frequently offline myGov website.

Moreover, in contravention of the law putting the onus on creditors to prove they are owed a debt, Centrelink demands that its victims must prove they were not overpaid. Anecdotes collated by the #NotMyDebt website indicate that attempts to question the debt have been met with threats of police action. Unsurprisingly, many victims have made repayments on debts they do not owe just to get the debt collectors and Centrelink off their backs.

The response from government ministers has been predictable: claiming that the system is working well, dramatically downplaying the extent of false overpayment allegations, threatening jail for those who don’t pay “robo-debts” and stigmatising welfare recipients as bludgers with sanctimonious lectures about the need to protect the Australian taxpayer from welfare cheats — an argument that would be more convincing if the ministers making it were not simultaneously fending off questions about the latest parliamentary expense scandals.

The base rate pay for backbench federal MPs is more than $199,000 — more than 10 times the income of someone on Newstart — $343,344 for cabinet ministers and a tidy $517,504 for the PM.

On top of these astronomical salaries politicians receive generous entitlements. These include a standard $1000 a week travel allowance (almost a month’s income on Newstart), equally generous allowances for rent (often paid to spouses or family members), maintaining electorate offices and various other sundries. On top of this they can claim expenses for travelling on government business, including hobnobbing with the corporate elite at prestigious sporting events.

For politicians who aren’t satisfied with this and claim more than they are entitled to, the consequences are very different from those allegedly overpaid by Centrelink. Returning to the backbench was considered punishment enough for former Health Minister Sussan Ley for rorting $3125 of public money (three month’s income on Newstart) to make a trip to the Gold Coast to buy a luxury apartment.

Evidence from whistleblowers confirms that the “robo-debts” are not accidental. The government is correct to claim the system is working well.

“I can verify that while there are issues, none of them have occurred through … technical faults. This system works … 100% to specification. This whole debacle is stemming from bad policy not our Online Compliance System,” a whistleblower told the Community and Public Sector Union (CPSU), which covers Centrelink workers.

Another whistleblower wrote to GetUp confirming allegations that Centrelink staff were being instructed not to correct erroneous overpayments.

“I’m writing because I along with so many of my coworkers have tried to stop the wrong that is being done to thousands of our customers on a daily basis and I can no longer live with what we are doing.

“Within the organisation it is well known that there are errors in the program and compliance officers are directed to ignore incorrect debts without being permitted to correct them,” the whistleblower wrote.

Intimidating welfare recipients to pay money they do not owe is deliberate government policy. The government openly says the aim is to add $4.5 billion to government coffers. Reporting government plans to expand the Centrelink robots’ victims beyond the unemployed, the July 17 Sydney Morning Herald said: “The mid-year economic forecast tables published last week shows the government has booked savings of $1.1 billion clawing back overpayments of the aged pension and another $400 million from the disability support pension.”

These attacks on welfare recipients are also attacks on workers. Increasing casualisation forces many workers to rely on Centrelink for at least some of the year. Furthermore, the attacks add to the many measures already in place to make life hell for the unemployed — such as unrealistic job search requirements, work for the dole and bogus training schemes. Making unemployment hell assists employers’ attacks on wages and conditions.

Trade unions and welfare recipients are combining to resist the extortion. A January 31 welfare recipients’ rally in Melbourne has been endorsed by the ACTU.

Centrelink workers in the CPSU have distributed an open letter outside Centrelink offices which read, in part:

“As Centrelink employees, we put ourselves at risk by speaking to the media or commenting in public about what is happening at our workplace … We need to tell you that we see your pain and acknowledge your fear. We know you are angry and we are too … We know that the automated debt notices are unfair, unjust, and callous. We acknowledge that in a great many cases, they are not your debts.”

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