Dec 21, 2016

How to dispute a Centrelink debt

Does Centrelink think you owe money that you don't think you owe? Here is what to do next.

Sally Whyte — Political reporter

Sally Whyte

Political reporter

Centrelink’s new automatic debt generation computer system is generating 20,000 debt notices a week, despite more and more stories emerging about obvious problems with the system.

Since July, Centrelink has run an Online Compliance Intervention system, which matches income data provided to Centrelink by recipients to income data provided to the Australian Tax Office. If the amounts don’t match, people are told they need to update their details with Centrelink, and many are coming away with debts of thousands of dollars.

The system does not take into account people who were not receiving a Centrelink payment for a full financial year, or it picks a certain time period and averages out earnings for the full financial year — which can be wildly inaccurate for those doing seasonal, casual or contract work. Under the previous manual system of data-matching, 20,000 debt notices were issued annually. Crikey and other media outlets have reported on many people who believe they have been unfairly and incorrectly targeted by the system, and disputing debts is difficult and stressful.

Social Security Rights Victoria (SSRV) runs a phone advice service for people with issues related to social security law — and in the six months since the new automated debt notices have come into effect, people with debt issues with Centrelink have gone from half of their cases to 90%.

The first step in disputing a debt with Centrelink is to ask to speak to an authorised review officer (ARO), says Graham Wells, principal lawyer and clinical program supervisor at SSRV. This can be done through the MyGov system, over the phone or in person, and it basically means a more senior person in Centrelink will assess the case.

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The ARO will look at why the debt has been raised and a person can provide evidence or new information in an attempt to reduce or strike out the debt. There’s no time limit to appeal a debt to an ARO, but repayments will still need to be paid during the review period.

Wells says it’s important to get a receipt number from the ARO to make sure you have evidence that the appeal has been lodged, and something to refer back to in subsequent dealings with Centrelink.

The Guardian has reported that those trying to dispute their debt have been told all compliance issues must be dealt with online, and the Department of Human Services is claiming that only a small number of people have had issues with the online system and that there has been no increase in the number of appeals about debt notices.

If you are unhappy with the ARO’s decision, the next step is to dispute the debt with the Administrative Appeals Tribunal — the Social Services and Child Support Division deals with Centrelink issues. This also doesn’t have a cost to the person bringing the complaint, unless they hire a lawyer. This is called the first review, and if it doesn’t go your way, it’s possible to have a second review through the AAT’s general division. The AAT released a fact sheet last month on what information it needs and how it makes a decision.

“Our experience is that at least 90% of them [debt cases] have problems, they are either wrong completely or there is legal merit to have them reduced,” Wells said. Most cases are resolved at an earlier stage than the AAT, but Wells says most cases he has been involved with at the AAT are successful. If appeals at the AAT have been successful, disputing a Centrelink debt could even go to the Federal Court, but Wells says he discourages people from going down that route as it is expensive.

It’s also possible to request information that Centrelink holds about you through freedom of information laws.

“There seems to be some sort of policy direction to claw back whatever debts they can, however they can,” Wells said. “The problem is there is no fact checking going on.”

Wells says he would welcome “any opportunity to talk to the minister’s representative to work through a better way of doing things”.

He is most concerned for people on Centrelink payments who are also in public housing. If their debts are removed from their payments, their rent is also not being paid and they face eviction. “It’s emotionally incredibly hard for people to tell their kids they can’t buy whatever they want for Christmas because they are having enough trouble feeding them or keeping a roof over their heads.”

“I’m not saying that to be hostile, it’s just that there has to be a better way of doing things.”

Independent MP Andrew Wilkie has called on the government to suspend the automatic system, telling Crikey: “Centrelink is treating people as guilty until proven innocent, rather than saying ‘there’s a reason to suspect a problem’ they are just saying ‘you have to pay the money back unless you can prove otherwise’.”


Leave a comment

14 thoughts on “How to dispute a Centrelink debt

  1. Urban Wronski

    Appalling reversal of the onus of proof. As it is, Centrelink staff treat you as if you are a potential fraud. If only the same rigour could be applied to companies evading taxes. Or banks.

  2. Rosie Barron

    onya’ crikey for not paywalling this, very important information. cheers.

  3. paddy

    Plenty of good advice here.
    But contacting MyGov via phone???
    Successfully achieving that, really would be a Christmas miracle.

  4. Pamela

    As a newcomer to Centrelink absurdia, I have much to learn not least the “how many ways can they get it wrong”.
    Latest is a letter telling me that Immigration (another lack lustre mob) have informed Centre Link that I went Overseas in August 2016 and did not return.
    Checked my passport to see if I had gone do-lally, after all I am applying for an aged pension. No went nowhere last year and am still here.
    Awaiting next installment…

  5. CML

    If you treat the staff at Centrelink with courtesy, you won’t have any problems.
    Have been dealing with them, on and off, for the last 10 years with NO bad results.
    If you start with the abuse, then expect difficulties.

  6. listohan

    It’s fundamental that if you compare inches with centimetres (benefits calculated on fortnightly circumstances and annual income) you will make errors. And lots of them.
    Surely it is important for information about errors arising under this crazy matching system to be accumulated with say, the Opposition, so the process can be exposed based on evidence.

  7. Centrelink officer says only a fraction of debts in welfare crackdown are genuine - AlloverUnique

    […] Australia and other media, including the ABC and Crikey, continue to receive reports of incorrectly issued debts, which are causing stress and anxiety just […]

  8. Steve Tonks

    I had the fortune of being able to perform some temporary work from October 2010 to end of June 2011. The work was on and off, sometimes a few weeks on and then many weeks off before a few more weeks on and weeks off again etc, such was the nature of the position.
    I submitted earned income (or no earned income) declarations to Centrelink as required each fortnight and received full, partial or no benefit depending on my earned income each fortnight.
    One month ago I received notification from Dept of Human Services of a data matching disparity and was asked to confirm my earned income for the year. After checking my bank statements for the period and checking against my earned income declarations sent to Centrelink each fortnight I saw that no overpayment had been made by Centrelink and I scratched my head wondering wtf they were on about. I replied to the initial letter confirming my earned income for the period.
    After reading in the press about the fraudulent “debt recovery” program being run by the Dept of Human Services I sent an email to Hank Jongen (relevant manager at Dept of Human Services) and several days later received a call from a lady from the Dept of Human Services Compliance Team. I was told I had a debt of $3414 (being the total amount of benefit I received during the above period). I asked how this had been determined and was told that the earned income amount advised by the ATO was divided by 26 and if the average fortnightly income was above the threshold at which payment ceased then it was deemed that no benefit was payable for the entire period and the benefits I had received would need to be repaid.
    It immediately struck me that the debt recovery earned income average methodology was badly flawed when applied to people such as myself who had worked on and off during the period. I gave the lady caller details of times during the period when I earned no income and she could see these periods reflected in my fortnightly earned income declarations to Centrelink.
    Still this was not proof I had not worked during these weeks (although I am sure it is a crime to falsely declare income or no income).
    I am now having to communicate with the employment agency for whom I worked on and off between October 2010 and end June 2011 and requesting a letter stating the periods worked and the periods not worked during this time. It is bizarre that I am guilty until I can prove my innocence. I am convinced this program being run by the Dept of Human Services is a scam to force innocent people to repay benefits they were entitled to receive.
    I think the ACCC would be doing people like myself a real service by listing this “debt recovery” program on their Scamwatch website. I am reliably informed that certain senior managers at the Dept of Human Services are earning large bonuses dependent on the amount of revenue collected by this “debt recovery” program.
    I strongly recommend that everyone who is being unfairly screwed by the Dept of Human Services writes to their local MP, to the Minister Alan Tudge, with copies to Andrew Wilkie MP and senator Doug Cameron, both of whom are taking an active interest in this program.

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    […] the Guardian has reported on it in detail, thanks to the diligent work of Christopher Knaus, as has Crikey and Triple J’s Hack […]

  10. Ian Roberts

    Perhaps pollies with dubious expense claims should be assumed guilty until they can prove themselves innocent. They could be sent demands for reimbursement including the threat of debt collectors and a 10% penalty. The onus could be put upon them to furnish whatever evidence they can and they shouldn’t be presented with the evidence against them.

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