NFAW Statement: Centrelink Non-Compliance Process

The National Foundation for Australian Women has released the following statement on the Centrelink Non Compliance Process:

The National Foundation for Australian Women is profoundly concerned by the Ministerially approved processes for so-called debt-recovery from Centrelink clients, and calls on the Government to cease using the process pending receipt of a report from the Commonwealth Ombudsman.

Associate Professor Hodgson’s article, published today has demonstrated the differing underlying principles of the taxation system and the social welfare system, and the potential for problems when the data are automatically matched. She shows that a comparable problem arose when data matching was used in 2001 and repayments were necessary.

The problem is quite clearly one of intentional design of the system, not to be blamed on IT (since significant funds have already been provided for IT updates).

It is clear from evidence given by the Department of Human Services before the July 2016 hearing of the Senate Estimates Committee that their estimated rate of non-compliance/error was in the order of 14%. See below.

It is also clear that the vast flow of letters per week presumes a much higher error/debt rate.  We are just beginning to see the human consequences of this.

The Ministerially approved process of advice, debt raising, demand for payment even while contesting the debt, and providing the collection to commercial debt collectors is both more peremptory and harsher than ATO processes.

The problems caused for people on irregular incomes from casualised work, for people with intellectual or mental health problems, for people with poor access to the internet (let alone to the dysfunctional MyGov  site) are incalculable. The damage to many people will be longstanding. The deprivation of income for those wholly dependent on welfare payments is disgraceful.

The Australian social welfare system of income supports is one of the most highly targeted in the OECD.  It is thus very efficient in reaching those most likely to be encountering long term financial difficulty or transient stress due to an episode of illness of unemployment.

It is necessary for our system to ensure that mutual responsibility, cited by the Minister, covers both ensuring that each individual gets all to which he or she is entitled, no more, no less, and for individuals to comply with reasonable legal requirements to substantiate applications.

There is some ground to conclude that the current system for compliance may go beyond the law and has the effect of clawing back money, or attempting to do so, where no liability exists.

The system should be suspended pending a report by the Ombudsman, and potentially further investigation as to the process of its development by a Parliamentary Committee.

Meantime we call on the Minister for Social Security to ensure that immediate additional funding is made available to community welfare rights, legal centres, and counselling centres who are facing additional demands for service due to the stresses of affected individuals.

See more on the NFAW website. 


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