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Centrelink bogus debts: How far can the vulnerable be pushed before they break?

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Minister for Human Services Alan Tudge (image by Nick Haggarty via abc.net.au).

The Centrelink #notmydebt fiasco is simply ongoing government oppression of society's most vulnerable, writes Eleanor Green.

I AM ONE of the lucky people who have received a false debt notice from Centrelink.

The letter states:

‘We have completed our review of your employment income details and made a decision to change the amount you were entitled to receive.’

You might notice it does not say I received more than I was entitled to. Rather, the Government has changed their mind about how much to pay me after the fact.

The debt notices scandal, or should I say scam, has been blamed on faulty government technology. When I received the notice, I was not surprised. It just seems typical of the Government, with its expertise in combining bullying and incompetence. The notice refers to a period over five years ago, when I was working casually as a checkout operator at Coles and I diligently reported my income at the time on a fortnightly basis.

Over the past six months, almost 200,000 debt notices have been delivered. They continue to be sent out at up to 20,000 per week, which is approximately the same amount that were sent for the whole of 2015. Meanwhile, Centrelink seems to be in no hurry to rectify the problem. There are plans to send out 1.7 million debt notices, in order to grab back $4 billion from welfare recipients. Pressure on the Government to do something about it is high, however. A national day of action, which I attended, was held against the false debt notices on the 31January.

These notices could be sent to anyone who has been on welfare sometime in the past seven years. The stress caused to thousands of Australians constitutes serious harassment by the Government. It is extremely concerning that vulnerable people, such as those suffering from mental illnesses or disabilities, are being targeted and could be driven to suicide. An estimated 20 per cent of people on Newstart have a recorded illness or a disability with a partial capacity to work.

One financially struggling student who has anxiety and depression said about their $1,400 debt notice:

“Christmas time is already very hard for me and before I saw that it was a widespread issue I felt so alone I was contemplating suicide … my mental health has spiraled since and I feel like this is hanging over me like a cloud.”

It is a likely outcome that people in receipt of the notices will be unmotivated to fix the problem, due to a reduced capacity for work and dealing with stressful bureaucratic systems. Instead, many people are likely to pay this falsely incurred debt.

Perhaps this was the Government’s plan all along. It seems like an experiment in how far the government can push people before there is public outcry. The fact that the number of debt notices sent seems to have slowly increased since 2016 is an indication of this. It is further supported by the fact that after people began to speak out, they have reduced the rate of debt notices being sent out but not cancelled the automated system entirely. If the people behind this system are not fired, then it is further indication that the false debt notices were sent out intentionally in order to raise revenue.

These debt notices amount to the government stealing money from Australian citizens. Not only that but this situation further oppresses people on welfare and contributes to the public stigma toward us. An anonymous Centrelink whistleblower has reported that workers have been ordered not to correct the debt notices, or look into debts unless the client submits a formal request for review, while Alan Tudge insists that "the system is working". The whistleblower also reported that only 20 out of hundreds of reviewed cases turned out to be legitimate debts.

The debts come with an attached ten per cent recovery fee and the government plans to charge interest on debts and remove the six year limit for debt repayments. As well as this, they are threatening gaol for those who do not pay their debts.

The flawed debt recovery system uses Australian Tax Office data, which averages out earnings over a year. Then if there is a discrepancy between the payment based on average earnings and the total payments for the year, a debt will be incurred. Over 1 million people have been reported to have a "discrepancy" in their payments. If someone works casually or takes leave, they are more likely to receive a debt notice.

This is blatantly wrong, as any person who works casually may be paid more one fortnight and less the next, resulting in their needing to rely on welfare for the fortnight they are not paid enough to live on. This is why the current welfare system is set up to pay people based on their fortnightly income.

The mistakes in the debt system could have been avoided with a basic knowledge of math and begs the question of whether the government is employing the right people to set up these systems. It follows a similar failure with the 2016 Census, when the system crashed, as it did not have the capacity for everyone in Australia to log in to fill out the online form on the same day. This resulted in at least $30 million in unexpected costs and an incomplete census.

Online tools such Centrelink Online Accounts and the NDIS Participant Portal have been subject to frequent crashes and "technical difficulties". The NDIS portal crashed for over a month last year, leaving people with disabilities unable to claim the payments to which they were entitled.

Online tools can increase efficiency when they function correctly but wreak havoc when they don’t. It seems that there is a lack of funding and effort put into government online systems. Additionally, they don’t take into account people who struggle with technology, who need to be able to submit claims and personal information with paper forms, such as the elderly or the intellectually disabled. This makes obvious sense if what you are interested in is consumer satisfaction. If a supermarket entirely got rid of people who work on checkouts, there would be outrage but the government creates havoc and people remain silent.

Department of Human Services clients have many complex circumstances and need someone with empathy to understand their situation, which a machine is incapable of doing. Technology has not yet progressed to a stage where the algorithms used can take into account the complexity of personal circumstances. Even if it had, I don’t believe we can trust the people currently in power to create these systems to judge how much people get paid. This latest incident proves that the current Coalition Government is incapable of creating a fair and just society and, instead, they would like to further punish vulnerable people.

The Government needs to understand that the poverty cycle leads to deteriorating health and mental health, which leads to a reduced capacity to work and reduced income. It means people cannot afford things which help in finding work such as a car, or even stable accommodation. The demeaning treatment by job agencies and the Coalition Government, the public stigma, along with the isolation of poverty, leads to reduced self-esteem and mental health. Perhaps if people didn’t have to spend as long dealing with Centrelink, they would have more time and energy to look for work. Bullying by the Government only further drains their time and energy, leading to a reduced capacity to find and hold employment.

Unfortunately, it seems that the Turnbull Government’s priority is not to provide services to the public, particularly when it comes to people on welfare. Instead, its policy appears to be to frustrate people into submission. From the faulty online portals, to the much complained about telephone on-hold music, the long wait times and poor customer service, it seems obvious their aim is to make the lives of welfare recipients as difficult as possible.

Meanwhile, they intend to make life as easy as possible for large corporations by refusing to crack down on tax-dodging, which could bring in over $50 billion per year. This would well and truly cancel out our already relatively small budget deficit and remove the need for the government to hassle people in the poorest sections of society for extra money — although I suspect they would do this anyway.

For anyone in a similar situation, even if you don’t think it’s worth your time to fight the debt notice, do it for everyone else who the Government oppresses. Show them they can’t get away with money grabbing and service slashing. As well as fighting these debt notices individually, I think there needs to be a class action lawsuit, to have the system that is sending out these debt notices cancelled as soon as possible, before irreversible harm is done to those in the poorest sections of society.

If you would like information on how to fight your debt notice, go to GetUp!’s FraudStop website. To read more people’s stories about wrongly issued debts, visit the #NotMyDebt website.

Centrelink Bogus Debts Clawback Fiasco (image via @VCOSS).

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