A Senate inquiry into the Centrelink ‘robodebt’ system took place in October. A class action challenging the legality of the controversial automated debt recovery scheme has also been launched. The government has been under increasing pressure to scrap the program and in recent days it has announced major changes to the way they calculate alleged debts.
The system was introduced in mid-2016 and immediately caused angst for those it targeted. Supposed debts were determined using a computer algorithm which attempted to match fortnightly Centrelink reporting periods to people’s annual income figures held by the Australian Taxation Office.
Before the introduction of robodebt, if the algorithm noticed a discrepancy then a Centrelink worker was assigned to look into the matter. Only after a check, and if there was proof of a discrepancy, would a notice be sent to the recipient.
Under the robodebt system, notices of debts incurred were sent to welfare recipients without being reviewed by a person. It was then the responsibility of the person issued with the debt notice to prove that it is wrong. In other words, it treated welfare recipients as guilty until proven innocent!
Many of these debt notices were sent to old addresses so lots of people weren’t even aware that they had a debt until they found that they were barred from overseas travel, couldn’t take out a loan or had a debt collector contact them.
Before robodebt was implemented, Centrelink contacted about 20,000 people per year about overpayments. Under robodebt they were contacting an average of 10,000 a week!
At least 20% of all robodebt notices sent were either waived or reduced because they were incorrectly issued. That doesn’t take into account the incorrect debts people are still trying to dispute, or debts they aren’t even aware of yet.
For many of those that have received robodebt notices, it has been very difficult to prove that the debt is incorrect. It can be a timely and costly effort to dispute as you often need to compile records from more than six years ago. Some banks charge money for this service, money that many on welfare do not have.
The government claims that they help those who have been wrongly issued a notice, but the figures show otherwise. Since the start of 2017 Centrelink has only contacted a mere thousand businesses to obtain payslips.
But these debt notices are not just an inconvenience. Huge amounts of pressure are heaped on people when they have no money and are then told they owe the government cash after being made unemployed.
Between July 2016 and October 2018 over 2000 people died after receiving a Centrelink robodebt notice. Almost a third of those who died were classed as “vulnerable” by Centrelink, meaning they had complex needs such as mental illness, or were victims of domestic violence.
There has been no real investigation into these matters but many of the families of those who died have suggested there was a clear connection.
For example, 22-year-old Queenslander, Jarrad Madgwick, died by suicide after he discovered he had a Centrelink debt of $2000. While the family of Rhys Cauzzo, a 28-year-old from Melbourne, have said that the aggressive payment demands contributed to his suicide.
The government had claimed that the robodebt scheme helps to discourage people from “taking advantage” of the welfare system. But the idea that so many people are lying about not being able to find work is a joke.
For a start Newstart is a mere $40 a day – well below a living wage. No one would choose to live on that if they had the option of a decent job. The truth is there are just not enough jobs or hours to go around.
If the government was seriously interested in making sure people weren’t rorting taxpayer money, they would be investigating big businesses fraud and making cuts to the generous corporate subsidies they hand out. But robodebt, like drug testing, is designed to vilify the unemployed.
We need real action to create jobs, and a campaign by trade unions to counter the vilification of those thrown out of work. Anybody can find themselves in a situation where they lose their job, especially as we head towards a probable recession.
While the changes announced by the government are a slight improvement, we need to scrap these types of debt recovery schemes in their entirety. Unions and community groups should back the call for increased welfare payments, a shorter working week to share out available work – with no loss of pay, and for a public works program that creates jobs and addresses social need.
By Kai Perry