Ngarrindjeri elder Elaine Kropinyeri from Mount Gambier in South Australia told SBS News Centrelink had recently cleared her of a $7800 debt, citing an “internal mistake”.
Ms Elaine Kropiyeri said she had not worked for two-and-a-half years after she resigned for “personal reasons” as a cultural consultant at a local foster care service in Mount Gambier, and successfully applied for Centrelink’s NewStart Allowance.
She said she discovered the so-called debt after Centrelink informed her she had been overpaid, in a separate matter, by $600. According to Ms Kropiyeri, Centrelink did not explain how the overpayment had been calculated, but deducted $464 from her regular payments towards the debt.
“It was absolutely terrifying…when you’re on a very meagre income, barely surviving,” she said.
Ms Kropiyeri found the $7800 in an obscure area of her MyGov Centrelink online account while trying to understand her debt notice. This figure, according to Ms Kropiyeri, didn't appear in the usual 'deductions' section.
“They didn’t even send me a letter,” she said.
“If I didn't accidentally come across it the way I did, they would still be deducting from my meagre income.”
Subsequently, Ms Kropiyeri received a statement on November 29 confirming her fears that the larger sum was in fact owing. With the notice showing $7154.52 was still to be repaid, she was able to work out Centrelink had been deducting part of her payment without her knowledge for this larger debt.
Centrelink has been under fire this week over its debt recovery process. There have been reports of welfare recipients receiving debt recovery letters over the past month, in some cases over contested debts.
Social Services Minister Christian Porter confirmed on Tuesday 169,000 “polite” debt letters had been distributed by an automated system.
The Labor Party has criticised the system as flawed.
“This is a crude and inaccurate approach with data matching… we think it should stop,” Labor’s acting human services spokesman Doug Cameron told ABC radio last week.
It is part of the federal government’s attempt to retrieve $4 billion in overpayments.
When Ms Kropiyeri enquired to Centrelink over the phone about the disputed amount owing, she said the staff member could not explain it.
“I am still unsure how this [debt] came to be because, as I said, I hadn't worked and did my reporting every fortnight.”
She was referred to a specialists team where a staff member said the onus was on her to explain the debt to Centrelink.
“But it’s [their] department that determines what overpayments that need to be distributed - I don’t have access to their computers.”
Because she was sure she did not owe any amount, she said she told Centrelink she would take her case to the Ombudsman's Office and ended the phone call.
Within half an hour they called her back to tell her the debt had been waived because of an “internal mistake”.
“I know my rights, so I stood up, tooth and nail, to them.”
On Wednesday, independent federal member for Denison Andrew Wilkie MP called the Commonwealth Ombudsman to investigate the system.
"This is terrifying people, and we've got a government who is saying there is no problem," he told reporters in Hobart on Wednesday.
"I've had four people now approach me... who I would describe as presenting as suicidal."
He cited a case of a woman who said Centrelink told her she owed $69,000. When she enquired into it, the service said in fact she owed it $3000 but could not provide her with a reason why.
A spokesperson from the Ombudsman’s Office told SBS News that it was aware about the issue brought to its attention by Mr Wilkie and was seeking further information from Centrelink.
They added that the office would not comment further at this time.