Secretary of the Department of Human Services Kathryn Campbell

From July 1, more Australian pensioners will be targeted by the controversial Centrelink automated debt notice system despite the controversy the program faced over the past few months.

The program has continued operating, sending out over 200,000 notices and approximately 10,000 notices per week,  despite a number of issues. These include a Commonwealth Ombudsman review, Information Commissioner audit, parliamentary committee and incorrectly issued debt notices to welfare recipients. Unlike the initial process, the letters are now sent by registered post, meaning the department could be spending in the vicinity of $50,000 on letters per week. This is to ensure the first a person hears about their alleged debt isn’t from a debt collector.

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Officials from the Department of Human Service told a Senate committee yesterday it will plough ahead with a planned expansion of the debt notice system later this year. The expansion — first announced in the Mid-Year Economic and Fiscal Outlook late last year — is looking to claw back non-employment income and assets information into the online compliance system. This means the assets and non-employment income — such as dividends from shares and interest — will now be cross-matched with all welfare payments including pensions.

The new non-employment income data-matching program has been estimated by the government to return $300 million in the first year from 80,000 welfare recipients.

Department of Human Services deputy secretary Malisa Golightly told the committee that unlike the initial debt notice system, the changes from July 1 would be using data from the Australian Taxation Office (ATO) from recipients’ tax returns. Department secretary Kathryn Campbell said it was data provided to the government by the individual, rather than the Pay-As-You-Go income data sent by employers to the ATO.

“Importantly that is information the person has provided to the tax office and has signed off on,” she said.

The inclusion of new welfare recipient categories and new data fed into the system would not result in a rise in the number of letters being sent out per week, the department’s general manager of integrity modernisation Jason McNamara said, because the bottleneck was in the registered post system to send out the letters.

“At the moment we are constrained by the registered post system so probably not from July. I think from July we will still be doing 10,000 per week. Logistics of registered post means we are keeping it at 10,000,” he said.

Campbell indicated the department would use data analytics to try to target welfare recipients that were more likely to have declared their income and assets incorrectly to try to refine the process.

The process could do with some refining, the committee heard, as there have been five alleged debts waived after the department discovered it had sent notice letters to dead people.

The Office of the Australian Information Commissioner announced yesterday he would be overhauling Australia’s privacy code in the wake of the Centrelink debacle and other similar issues of Australians’ privacy, and would now require government agencies to undertake a privacy risk assessment before data matching, and that assessment would need to be made public.

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Peter Fray
Peter Fray
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