Government asks pensioner to repay thousands and he still doesn’t know why

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Transparency, onus of proof and the debt collecting tactics of Centrelink’s so-called ‘robodebt’ system questioned as calls to shutdown the automatic debt recovery system ramps up.

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The government's contentious automated debt recovery program will be scrutinised by Parliament with the Senate agreeing to a fresh inquiry on Wednesday. Meanwhile, Australians continue to pay debts they don't believe they owe, including age pensioners.

It will be the second inquiry in three years, following calls by Labor to shut the program down.

Despite the Commonwealth Ombudsman in 2019 finding Centrelink had improved its processes for handling automated debts, Greens Senator Rachel Siewert said the government failed to implement key recommendations.

"I hear from so many people that they have given up appealing their debt even though they know they don't owe anything simply because they cannot keep fighting such an opaque system," she said.

One fifth of debts reduced or waived

Robert Cummings was enjoying retirement when he received a debt notice for thousands of dollars in early 2017.

"It was a shock, they didn't go into a lot of information about where the money was, or why it was owed," he said.

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Robert Cummings spent months gathering payslips from several workplaces to disprove his debt.
Emily Jane Smith

The $3000 debt was generated by Centrelink's new "online compliance system", later dubbed robodebt, which uses a computer program to calculate if welfare recipients have been overpaid.

Mr Cummings worked casual shifts in aged care before he retired in 2015. But he wasn't earning enough to get by, so he topped up his income with Newstart and reported his earnings to Centrelink each fortnight.

Like many people on welfare, Mr Cumming's income fluctuated. Centrelink's new computer program averaged out his annual income information from the Autralian Tax Office and compared this with what he reported fortnightly. The data didn't match, so like thousands of others, Mr Cummings was automatically issued with a debt notice.

Previously, staff would cross-reference ATO data with reporting data themselves to verify whether debts existed and would then issue debt notices appropriately. Since the end of 2016, the onus of proof has been reversed and the debt recipient must prove they don't owe money.

To disprove his debt, Mr Cummings was asked to track down years of payslips for the debt period.

"I was basically having to prove my innocence as they deemed that, you know, I had basically stolen this money off them," he said.

"And that was what really hurt me, they accused me of being a thief. It really did make me feel very depressed."

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Robert Cummings is paying off his debt through his aged pension.
Emily Jane Smith

Figures from the Senate estimates show that more than 2,000 people died after receiving a robodebt.

The system had clawed back $500 million from current and former welfare recipients. But it has cost $400 million to manage.

One fifth of debt notices have been reduced or waived.

After collecting his payslips, Mr Cumming's debt was reduced by just over $1000.

"I didn't feel that I could dispute it you know, [I felt] that [the debt] was set in concrete. I didn't feel that I had any rights there," he said.

Mr Cummings wasn't informed of any option for recourse, so he agreed to pay off the debt by $15 a fortnight which is taken from his age pension.

"It's $15 that when you're struggling to pay rent and food and your electricity and other needs, it's $15 that makes a big difference at the end of the day," he said.

Reversing the onus of proof facing legal challenge

Victoria Legal Aid lawyer Joel Townsend said that the system affects the most disadvantaged.

"Centrelink are asking people to prove that they don't have a debt and so that involves sometimes digging back through bank records sometimes digging back through payslips," he said.

"Often people find that very difficult, particularly people who at the margins of society, have struggled, maybe have been in and out of employment," he said.

Mr Townsend, with Victoria Legal Aid, is levelling two legal challenges against the robodebt scheme.

The firm filed their first case on behalf of nurse Madeleine Masterton earlier this year. During the proceedings, Centrelink wiped her $4000 debt base and admitted that they got the debt wrong.

"The Commonwealth has accepted, after we got helpful information from the applicant, ... [they] were wrong," Nicholas Owens SC said.

Victoria Legal Aid also mounted a legal challenge against Centrelink's robodebt program on behalf of Deanna Amato in June.

"We've seen debts that are a few hundred dollars through to debts that are tens of thousands of dollars. And we've seen debts where the person in truth owed nothing," he said.

In a statement to The Feed, the Department of Human Services general manager Hank Jongen said it had teams working to assist people with robodebt issues.

"We work hard to balance the specific sensitivities of working with people who need support and the obligation to ensure that people have been paid the right amount of welfare for their circumstances," he said.

"We have a designated team available to help people experiencing difficulties or with concerns about their review."

The Feed requested an interview with the Minister for Government Services, Stuart Robert, but did not receive a response.

Contact Emily Jane Smith - emily.smith@sbs.com.au